Wirral Council is set to pay out £3.9m in rent and costs for its new offices next year. The buildings, known as Mallory and Irvine, were part of the first phase of the Birkenhead Commercial District project, completed by the council in 2023 in Birkenhead town centre's Alice Ker Square.
After a £9.2m fitout, the council moved into Mallory in early 2024. Despite being funded upfront by £75m from Canada Life Asset Management, the council will still be liable for rent for the next 35 years, even if it fails to secure tenants for the buildings.
Previous accounts show that the local authority will pay at least £2.213m annually, split between £1.34m for Mallory and £873,000 for Irvine. The council had planned to recoup this cost by terminating its lease with the Cheshire Lines building and finding other tenants, projecting a profit of £500,000 if fully let.
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However, currently, the council remains the sole tenant, with Irvine completely vacant. To offset these costs, profits from the Wirral Growth Company, a joint venture of the council, are being utilised.
This includes £1.5m before the council moved in and an additional £2m this year. Following a query from Birkenhead councillor Pat Cleary at a policy and resources committee meeting on November 6, finance director Matthew Bennett revealed that the local authority is looking at paying around £3.9m in costs next year, reports .
The council has acknowledged the possibility of reducing the projected £2m cost by deferring some expenses, although these would need to be addressed later when the currently vacant space is filled. The budget for the upcoming year remains under development, with the empty office space expected to exert additional strain on a budget that already anticipates an overspend of £36m.
Green councillor Jo Bird highlighted the council's challenging financial situation, remarking: "It's clear to me that everyone in the Wirral is paying quite a high price."
She questioned the lessons learned from Wirral Council's previous Cabinet's decision in 2020 to advance the project. However, her comments drew criticism from Labour members who accused her of delivering a party political broadcast and noted that Cllr Bird was part of Labour when the decisions were made.
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Cllr Bird switched to the Green Party in 2022 following her expulsion from Labour.
Labour's deputy leader on the council, Cllr Jean Robinson, pointed out that Cllr Bird had been present during the approval of the plans, stating: "The decision was made at a totally different time now even since 2020 with Covid. Hindsight is a great thing to all of us."
In response to Cllr Bird's concerns, Mr Bennett acknowledged the current significant costs associated with Irvine but suggested they could decrease if the buildings are leased. He clarified that the £3.9m forecast for the next year represents a worst-case scenario.
He pointed out that the main factors contributing to the council's current budget situation were a lack of funding for children's and adults' social care services, which have seen rising demand and costs. During the meeting, Cllr Robinson stated that the council's budget had also been reduced by approximately £220m over the past 14 years.
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