Guildhall repair costs escalate to £20 million

Growing concern about debt levels as Council pledges to borrow more money

In December 2011 the then Labour controlled York Council was urged to make a prompt decision on the future of the Listed parts of the Guildhall.

The building became empty when the Council moved to “West Offices”.

It was to be the start of 7 years of prevarication. The fabric of the building deteriorated and repair costs escalated

Business plan 2014

The Council had embarked on an expensive and ultimately pointless design contest for the site.

Eventually the Council opted to use the building as a “media centre” although it was some time before a cost of £9 million for the conversion work was published.

Keeping the building empty was costing taxpayers over £150,00 a year in maintenance costs. The fabric continued to deteriorate.

A new “coalition” administration took over in York in May 2015.

Business plan 2016

They had been critical of Labours plans and the expectation was that they would test the market to see what the private sector might do with at least part of the site. They failed to do so and instead hatched a behind close doors deal to turn the complex into a self funding” business centre.

They could not find any public or private sector partners who would be willing to share the risk on this patently uneconomic project.

The cost of the project was put at £12.7 million. Councillors claimed that it would still break even with rent income offsetting the costs of borrowing.

By 2018 the estimated cost of the project had soared to £17 million. Councillors ignored pleas that the site be put on the open market. There was interest in providing residential, hospitality or prestige office accommodation on the site. The Council decided to plough on regardless

Business plan 2017

 

6 months ago the neglect of the building had become apparent to passers-by.

Yesterday the Council published a report saying that the project costs had risen to over £20 million. They admitted that taxpayers will have to find nearly £600,000 per annum to pay interest charges on the additional borrowing

NB. This year 11% of taxes paid by York residents were used to pay interest charges on the Councils borrowing. This will have increased to 21% by 2022.

By the same date, the Council total debt will have increased to £479,000,000.

Business case Feb 2019

York Council debts creeping up

The latest figures published this week show that the total Council debt stands at £319 million.

Borrowing May 2016

 

It is forecast to peak at £350 million in 2017 with new commitments like the Community Stadium, the York Central development and Guildhall office project all set to add to the overall debt.

Other projects like the so called community hub being constructed at Burnholme and the rest of the elderly person’s accommodation building programme could also add to the debt burden.

The figures mean that, in 2017, every Council taxpayer will pay £36 in interest charges on the borrowing.

The Council has been criticised for failing to get expenditure – and borrowing – under control with a string of recent decisions adding to the burden being placed on taxpayers.

Council debts soar by over 500% in 20 years.

Each York man, woman and child now owes £1326!

A freedom of information response has revealed how the York Council has increased its borrowing over the last 20 years since it became an “all purpose” unitary authority.

An inherited debt level of £40 million had risen to £269 million by 31st March 2015.

About 10% of the Council Tax paid each year now goes on repaying principle and interest on the debts.

The figures include historic debt on Council house building.

In only four of the last 20 years has the Council repaid more than it borrowed in the same year.

The majority of the new loans taken out have occurred in years when it was under Labour party leadership.

What will be of concern to most taxpayers is that the Councils current capital programme implies that borrowing will continue to rise over the next 2 or 3 years at least.

Council debts

No decision on Oliver House sale before June

…as York Council slides further into debt

According to The Press the York Council leadership has now said that the tenders received for the sale of Oliver House will not be considered until a new Council “Cabinet” has its first meeting in June.

Oliver House York

The former elderly person’s home has been empty for over 2 years.

We reported last week that an unexpectedly high £3.2 million bid, which would see 30 specialist older persons apartments provided on the site, had been deferred by the Council Leader.

Now it turns out that the sale will be delayed until the new Council, being elected on 7th May, has had time to sort out its new committees.

How long the offers will remain on the table remains to be seen.

Council debts spiralling

The full impact of the Councils financial management polices is becoming clearer. A freedom of information response has revealed a spiralling mountain of debt.

Capital debts - click to enlarge

Capital debts – click to enlarge

The response reveals that, since the Liberal Democrats lost control of the Council in May 2011, the Council has been borrowing heavily.  

The debt charges (interest payments) are partly responsible for the cuts that Labour are making to front line services.

Part of the debt increase was due to a transfer of historic housing debt to the City but this was coupled with a decision to allow all rents collected to be retained and used to service the interest payments.

The present Council also has several major projects in the pipeline which could add to the debt burden.

They include the conversion of the Guildhall into a media centre (£9 million) as well as funding a bridge into the York central site (£11 million).

The Council will also have to find several million to fund a replacement elderly care building programme following the abandonment of the care village project last month.

There is no excuse for any further delay in selling Oliver House to the highest bidder.

Legally, the Council has no other option