Plans to invest £45m to upgrade Newcastle Civic Centre have won the backing of councillors. Cabinet has agreed proposals to refurbish the building which would enable the cash-strapped council to save £32m over the next 25 years – in addition to recouping the £45m development costs.
The savings would be raised by avoiding on-going costly repairs to the ageing building and generating new rental income as parts of the building are rented out to public sector organisations. It would also save on energy costs and allow more staff to be relocated from satellite offices to under one roof.
Cabinet heard that the financial case made “good economic sense” as the plan would generate new income for the council at a time when its budgets were being cut by Government.
Cabinet member for Investment and Development Cllr Ged Bell described the plan as a “no brainer” and predicted it would help the council deal with austerity cuts at the council which is looking for new ways of being innovative after saving more than £100m.
Cabinet also heard that the council is working closely with the Government Property Unit which is helping public sector organisations to find cheaper alternative forms of accommodation.
It is hoped that some organisations will relocate into the Civic Centre as Cabinet also approved a proposal to accelerate the refurbishment from five to just three years.
Improving the Grade II* listed Newcastle landmark would enhance it for future generations as well as creating a more efficient workplace for council staff.
Energy savings, reduced maintenance bills and additional income will more than cover the costs of borrowing £45million to upgrade the building – including all interest charges on the loan. The remodelling would lead to a 30 per cent reduction in carbon emissions.
A failure to invest in the Civic Centre would cost the council £35.3million for basic repairs and maintenance to deal with the effects of wear and tear on an ageing building. This money would also have to be borrowed. There would be little or no opportunity to recover the costs, so the net effect would be an unfunded cost pressure on the council and a burden for local taxpayers.
Cllr Ged Bell, Cabinet Member for Investment and Development said: “When we look at the hard facts there can be no doubt that we have to act now to invest in the Civic Centre to save money in the long run.
“By taking a bold and innovative decision to invest in the building – we can more than cover the costs and generate an additional saving which will be used to shield council services from public spending cuts.
“Doing nothing is not an option. The building would go into decline and council tax payers would be left to foot the bill.
“The numbers speak for themselves. Councils are facing mounting cost pressures because of ongoing cuts to public spending, and we have to take this opportunity generate savings to safeguard services and secure the future of a Newcastle landmark.”