It could cost as much to refurbish Shirehall as it cost to build

Shirehall is in poor condition. Few people doubt that it must be refurbished. But the cost will be more than £25 million. On inflation adjusted prices, that’s not far short of what it cost to build this unloved building in the 1960s. Is it worth it? I have my doubts we need to spend so much. I would like to see cheaper options. But a council discussion on the costs of the scheme has been cancelled twice.

Shirehall 1967

In 1967, the Architect’s Journal published an appreciative article on the new Shirehall. Designed by Salop County Architect Ralph Crowe, the article records that Shirehall was built at a cost of £1,496,874. Converted to 2018 prices, that’s £26.4 million. That’s not much above the current estimate of £24.5 million for the planned refurbishment.

Concept for Shirehall reception

Anyone who has worked in or visited Shirehall will know that it needs a lot of work to bring the fabric and working environment up to scratch after decades of neglect. Whether that should cost more than £20 million should be debated by councillors – and in my view debated in public. But council managers have twice cancelled a discussion by full council.[1] Instead, councillors will attend a seminar after which a decision will be made on when a paper will go to full council.

I am unhappy with this make it up as you go along process. If we are to spend as much refurbishing Shirehall as it cost to build in the first place we need a confident well managed process. It’s not looking good so far.

What is being planned? Councillors have only received redacted papers. From what we can read, the papers contain what you would expect a briefing on a major project to contain. Here is the contents list of the main report.

From Shirehall Stage 2 Report (Redacted)

Eagle-eyed observers will spot that Chapter 8 has been redacted in its entirety. This is titled Commercial Opportunities.

I cannot see why a summary of the content of Chapter 8 has not been published. A summary need not to reveal if the council plans to sell its soul to McDonalds or Dunkin’ Donuts. Anyway, Shropshire Council has a public health remit, which should rule out these or similar chains from having space on the campus. I expect any food options will be ultra-healthy – beans, gluten free breads, herbal teas and organic soups.[2]

Much of the allocated space – around 10% of Shirehall – will be allocated to business, though I do not know whether these will be public, social or private businesses. The reports suggest public and private sector partners have already been identified. It is essential that councillors see a summary of the direction income generating activities before they decide to allocate 1,900 square metres of space – 10% of Shirehall – to this use.

There are a lot of good things about this project. More than 1.8 million kilowatt hours of energy are wasted every year because the building has not been updated for decades. The proposed refurbishment will reduce energy consumption by around 3.2 million kWh. Overall, refurbishment will achieve a 51% annual energy saving and an annual reduction in CO2 emissions of 1,250 tonnes.

The refurbished building will serve 800 council staff, along with 300 people working for other organisations.[3] Many will work from home or be mobile, so just 770 workstations will be needed. The staff will work in a much more comfortable and productive environment. The building will be welcoming and an asset to the county.

This will cost £20.4 million excluding VAT, overall about £24.5 million (plus inflation). This is £1.9 million over the allocated budget. That’s relatively small given the scale and complexity of this project but it suggests that insufficient contingency funds were built into the early planning stages of the project.

In all, £8.6 million of additional costs have been identified in the first stage of planning for refurbishment. Two of the biggest are asbestos removal[4] and IT infrastructure.

The largest additional cost of £3.9 million is redacted.[5] Nearly £4 million could fund a significant infrastructure project elsewhere. It is not right that councillors and the public are not allowed to know what it is to be spent on.

My understanding is that the budget for this scheme will come from the council’s capital reserves. These stand at nearly £100 million despite spending more than £50 million on Shrewsbury shopping centres.[6] We must invest in the fabric of Shirehall. I support the principle of refurbishment. But I will need more information before I vote for spending around £25 million on a clapped out 1960s building.[7] I also need to be confident that the project will keep within budget and contingencies.

The council should also present an alternative scheme for a less extensive refurbishment of Shirehall. That would free up capital expenditure that could be invested outside of Shrewsbury, including here in the south of the county.  

Concept for Shirehall entrance

Concept for internal courtyard

Concept for approach to Shirehall reception

Notes

[1]. On September 20, councillors were to be asked to approve £1.5 million to fund detailed project costs, a full business case and issuing and assessment of tenders. This was pulled at the last moment. The chief executive blamed IT problems restricting members’ access to the full suite of reports. A special council meeting was scheduled for 6 November. This was cancelled. Instead, members will attend a seminar which “will enable members to review the work consultants have undertaken.” The chief executive says: “Once this is complete we will be in a better position to determine when any paper comes to Council.” The seminar takes place on 15 October, repeated on 23 October (I expect to attend the latter).

[2]. For those that can’t cope with beans, etc., there is a chippy just up the road.

[3]. The council already operates this model. Highway engineers WSP are based in Shirehall. Road contractors Keir share offices with council highways officers in Craven Arms.

[4]. Offices are checked for the presence of asbestos in the air every year. The report says the allowance for asbestos removal in the plans for refurbishment “may be insufficient”.

[5]. The redacted word on the budget line is the same length as would be taken up by “Haircuts” but it could be two words like “Pea pods”. No doubt readers will have other suggestions.

[6]. The way local councils can spend money is defined in the Local Government Act 2003 and regulations set by central government. The golden rule is that capital receipts cannot be used to fund current expenditure. They must be used to fund capital projects. Shropshire Council holds high capital reserves, much of which was inherited from the former district councils. That means it is a position to buy shopping centres and refurbish Shirehall but it is short of cash to run day-to-day services.

[7]. Assessments show that the concrete fabric of Shirehall is in good condition. The biggest risk is asbestos, which will either be contained or removed. A second is parking. Councillors, officers and visitors already have difficulty parking on busy days. If other businesses move in to Shirehall, they will expect to be able to park. There is vague talk of travel plans being developed. “The public and private sector partners have been assured that the Council will be developing a parking strategy and associated Travel Plan for staff to ensure sufficient space is available for other parties wishing to take space on site.”