Agenda item

A report from the Leader and Cabinet Member for Finance and Growth is attached.

Councillor Eamonn O’Brien, the Leader of the Council and Cabinet Member for Finance and Growth, presented the report which proposed to close and sell Humphrey House, moving existing tenants to 3 Knowsley Place, and make adjustments to those facilities accordingly. In response to Member’s questions, it was noted that the £500k investment in agile working was sufficient and was supported by wider pieces of work. Members welcomed the Brownfield suitability of the site and were hopeful it could be utilised for town centre housing.

Decision:

Cabinet:

1.   Approved the disposal of Humphrey House and offer an alternative leasing option to the existing tenants as set out in this report.

2.   Approved an increase to the capital programme of up to £500k to fund the works required to facilitate shared occupation of 3 Knowsley Place and a modern, flexible working environment.

3.   Delegated the finalised terms of any revised leasing arrangements and commercial negotiations to the Director of Regeneration and the Section 151 Officer and Monitoring Officer.

Reasons for the decision:

·         The Council has challenging savings targets to meet through the ‘Let’s Do It’ transformation programme, ‘Let’s Do It Flexibly’

·         There is an immediate opportunity to realise a significant saving by seeking to share the space we let. 3 Knowsley Place and 6 Knowsley Place have the potential to be shared with other public sector partners. This opportunity is time-bound because if Humphrey House is to be retained a major refurbishment programme would have to be funded in the very short-term to bring the building up to a modern standard.

·         The implementation of agile working means that we do not expect staff to return to the office en-mass (subject to the evaluation of the model which will take place in December). However, we do expect teams and people to meet up regularly and to have spaces and areas that promote collaborative working.

·         3 Knowsley Place was fitted out 10 years ago as a standalone office building for Council workers – replacing a similar building Craig House on Bank Street in Bury. The current ground floor layout does not allow for multiple tenancy or provide spaces and areas that enable agile working, collaboration and teamwork.

·         By moving into modern, efficient buildings, the NHS tenants will save on energy bills likely to be in the region of £24k per annum.

Other options considered and rejected:

·         Advise the NHS Trusts that we are selling Humphrey House and ask if they would like to buy it. However, one Trust has already been advised of our existing use asset valuation and have not responded with an offer. The other two trusts have indicated they are content with the leasing option and are not seeking to acquire a property.

·         Retain Humphrey House and offer the tenants new 5-year leases. This would require an immediate capital outlay of circa £900K to undertake urgent works (of which there is no budget currently), plus an estimated £200K p/a to maintain the building over the five-year period. The costs of undertaking the additional works would be roughly equivalent to the income generated through the current rental agreement.

·         Advise the NHS Trusts that we are selling the building and ask them to vacate without offering them floorspace in 3 Knowsley Place. This option was rejected due to the availability of space within our Estate.

·         The option of ‘no-change’ has been discounted on the basis that Pennine Care and Greater Manchester Mental Health Trust continuing to hold over on expired leases in a building which requires urgent modernisation is not an acceptable long-term option.