Agenda item

13.1     The Chief Operating Officer introduced the report. Part of the Council’s Asset Management Plan is to reduce office accommodation post the Covid pandemic and the work on the County Hall site should be looked at in this context. The Council owns the freehold of the site, and the options developed reflect the desire to maintain an office base in Lewes given the locations that staff commute in from, and given that the office estate also has a footprint across the wider county in Hastings and Eastbourne. A detailed assessment of the site has been undertaken and the options outlined in the report reflect the constraints of the site.

13.2     The Assistant Director Property gave an overview of the options presented in the report. He outlined that there had been engagement with Lewes Town Council, Lewes District Council, the local ESCC Member and the South Downs National Park Authority (SDNPA) in developing the options. The SDNPA is currently reviewing their draft Local Plan and have been made aware of the options the Council is considering, but they have not been formally notified nor has the Council requested the site be included in the Local Plan. The footprint of the site includes the current County Hall building, Westfield House, the former St. Anne’s School site and the car parks.

13.3     In summary, option 1 represents staying at County Hall with no change; options 2 -4 are redevelopment options; and options 5 and 6 seek to locate County Hall elsewhere. All options have been assessed using the Treasury Model. The property development market is not very buoyant at present, and the Council’s financial position limits the amount of money available to invest in any redevelopment of the site. These factors and the cost of building a new county hall impact options 2 – 4 making them financially unviable. Option 6 is viable in the medium term.

13.4     The options developed give the opportunity to reduce running costs; provide up to 240 homes; provide more modern office accommodation for staff and the possibility of community use. The options include a mix of residential housing to ensure that they are compliant with housing policy for affordable homes, and options 2 – 4 allow for potential access to grant funding.

13.5     The report also contains details of the current running costs for County Hall and the requirement to invest an estimated £8.4 million in the next 10-15 years to keep the building running. Detailed assessment work has also been carried out to establish the amount of future office space needed, which is around 3,500m². In the short-term, work is underway to look at mothballing and leasing out parts of the existing County Hall building to reduce running costs and to free up space for lettings.

13.6     Officers are seeking the Place Scrutiny Committee’s views on the options, particularly option 6, before they are put forward to the Lead Member for Resources and Climate Change for consideration.

13.7     The Committee discussed the report and made a number of comments and raised questions. A range of comments were made by the Committee members on the options presented in the report. A summary of the discussion is given below.

Office base in lewes

13.8     Several Committee members commented that the starting point should not have assumed that ESCC should retain County Hall in Lewes. There were other more central locations where land and property prices are lower. Disposal of the County Hall site and demolition of the existing building would allow for the replacement with housing and provide a capital receipt for a new office in a more central location. The Committee noted that the Devolution agenda might also affect decisions around office location.

13.9     The Chief Operating Officer responded that the Council already has office bases in Eastbourne and Hastings. A lot of staff who work at County Hall travel in from areas west of Lewes such as Brighton and the surrounding areas. County Hall in Lewes is one of three bases and reflects the geography of where staff travel from and there will be a need for office space somewhere for these staff. All options will have running costs and planned maintenance requirements. Any development option will have development costs and costs for accommodation. The Committee commented that as most staff work from home, the impact of travelling further should not be too great.

13.10   The Chief Operating Officer explained that the financial benefits of the development options outlined in options 2-4 are very marginal and there are considerable risks associated with them as well as a management overheads. These risks would also be present in building a county hall elsewhere. At present none of the development options provides a financial benefit to the Council.

Current building

13.11   Committee members commented that having a building with only 27% occupancy costing just under £1 million per year to run was not sustainable or justifiable in the short to medium term, and action needs to be taken to reduce costs. The requirement for £8.4 million of investment in County Hall in the medium term, coupled with the £1 million running cost meant option 1 was not an option.

13.12   The Chief Operating Officer commented that Option 1 allows for mothballing part of the existing building and the potential for income generation to reduce costs.

South Downs National Park Authority

13.13   The Committee asked for clarification on whether the Council was making a formal request for inclusion in the call for sites by the SDNPA. The Assistant Director Property responded that ESCC had not submitted an application in the call for sites, and has not formally made a request to the SDNPA at this point in time.

Alternative options

13.14   Some Committee members commented that there needs to be broader thinking about the future use of the site and ideas for re-purposing the building or re-development options could be sought to address the amount of embodied carbon and potential economic generation opportunities from the use of the site. Others suggested holding an open design competition for the future use of the site. The Assistant Director Property outlined that the consultants had done a lot of work on the economic benefits, and this could be shared with the Committee members on a confidential basis if required.

Preferred option

13.15   The Committee noted that the consultants who had developed the options had not indicated a preferred option. Some Committee members suggested that if the Council choses to re-develop the site, the site should be sold and let a developer re-develop the site and not take the risk of developing the site itself.

13.16   The Chief operating Officer outlined that the County Hall campus is not as valuable as Members might think due to the site constraints which include access, ecology, topography and the existing buildings. The reason that a preferred option has not been identified is that most development options 2-4 are marginal and do not look viable on a cost basis. If one of the factors involved in the assumptions changes negatively, then the cost could be materially more than doing nothing. At this stage none of the options have been discounted and all will be put forward for consideration by the Lead Member. Option 6, moving to Sackville House in around 2030-32 would coincide with the end of the existing leases and would give more time to look at the implications if any of the factors such as market conditions and Government grant funding change to the make one of the other options more viable. If option 6 was selected, then as much work as possible would be undertaken to reduce costs of County Hall in the short term given the occupancy levels. The Assistant Director Property added that options 2-4 are not mutually exclusive of options 5 or 6.

Development approach

13.17   Members of the Committee observed that based on their experience development costs can be very high and would outweigh the £8.4 million that is required to maintain County Hall in the next 10-15 years. Also, any development option would take time to deliver, and refurbishment is better than a new build in terms of costs and risk. The County Hall site is not ideal for new build housing and options to locate elsewhere are limited. The impact on staff would have to be carefully considered if County Hall were to be re-located.

Running cost and occupancy rates

13.18   The Committee asked what potential savings in running costs and investment could be made if option 6 was selected, and whether an analysis of the occupancy rate had been undertaken by professional profile (e.g. social workers). The Chief Operating Officer responded that potential savings in running costs and investment in County Hall up to 2030 could be estimated and shared with the Committee on a confidential basis. The Chief Operating Officer outlined that the occupancy rate has been assessed by a professional in the field, and consultation has been undertaken with the different departments on their office accommodation needs. Based on the detailed work that has been undertaken, there is confidence in the estimated requirement of 3,500m². The Assistant Director Property added that feedback from the work undertaken in the Hastings and Eastbourne office hubs has also been taken into account from the teams based there.

Decision making and consultation

13.19   The Chief Operating Officer clarified that the decision on which option to take was a Lead Member decision and not Full Council. If a decision to re-develop the site were made, then this may need consultation. The Assistant Director Property added that the Council would work with all the key stakeholders if a decision to re-develop the site is taken.

13.20   The Committee RESOLVED to note the contents of the report and attached summary of the asset review.