Cunard Building: Bargain or Folly?

Whenever a council makes a decision, there is invariably a cost involved. The bigger the decision, the bigger the cost. It follows that it is just plain common sense to look at a major decision in this context, and to evaluate a cost-benefit analysis of that decision.

The move from Millennium House to the Cunard Building was such a major issue for Liverpool City Council. The sale of the former was itself contentious. Firstly, was its real value obtained? It is claimed within the council that its true valuation was downgraded internally, not once but twice, before it was sold. Secondly, it is said that, prior to its sale, parts of the building were unnecessarily upgraded at considerable cost without any sale benefit to the council. This is not the best way for a council – or anyone else – to sell a prime asset.

Nevertheless, if it could have been shown that the Cunard Building deal gave a net benefit to the council’s coffers, perhaps none of this would have been such a cause for concern. The problem arises when trying to objectively assess the council’s move. For example, we are told officially that the current value of the Cunard Building is now £27 million. Yet Freedom of Information (FoI) requests reveal that this is a figure written on the back of a fag packet. No current evaluation has been done! The council has no record of any valuation ever having been done!

Cunard Building has cost a king’s ransom, helping to push the city’s debts to their maximum limits (I am told it is now nearly £1 billion but I have no idea of the actual level of debt. It is a state secret!). Its initial cost has been increased by the cost of refurbishment. An acquired council spreadsheet shows early expenditure on refurbishment (via the chief executive’s office) running at nearly £3 million, of which £1.4 million went to St Helens office fitters, Jennor. A more recent contract awarded to Jennor shows the cost of just one office suite (3B) refurbishment in the Cunard is now £762,000. According to the relevant planning application for this contract, it covers “removal of partition walls, construct new stud walls, doors, suspended ceilings, and sanitary ware”. Perhaps the taps are gold-plated!

We must remember that the big selling point of the purchase of the Cunard Building to a sceptical electorate, was its projected use, in part, as a cruise passenger terminal. This option was shown to be a risible myth. A temporary terminal was constructed near the landing stage, but now there is said to be a need for a bigger facility. This will be built on Princes Parade on land owned by Peel.

This is fascinating in itself as Peel’s website still shows a separate cruise terminal in their own plans for Liverpool Waters. Presumably, Peel cannot lose out because building a terminal on their land will undoubtedly entail a lease cost to the council for the cruise terminal. One must also assume that the terminal will be managed – at a cost – by Peel for the council. After all, the council is not a docks company, and has no expertise in this field.

Arguably, this situation is implicitly recognised in a series of contracts which the council has awarded. Ove Arup has been commissioned to report on a new terminal project at a cost of £100,000. Meanwhile, our old seaport rivals from Southampton get in on the act. Two contracts have gone to Southampton Cargo Handlers, one for stevedoring services (£740,000) and one for rope handling (£600,000). Others have gone to Svitzer (£74,750) for tugboat docking; Rapiscan (£9099) for security scanner maintenance; and one for signage at the terminal for £20,000. Curiously, the council pay the Mersey Docks and Harbour Company (now defunct but part of Peel) £20,000 for “Duchy Turnover” – whatever that is, perhaps an archaic harbour due of some sort.

All of these costs ought to be considered alongside the distorted values attributed to Millennium House and the Cunard Building before an honest assessment might be made of the decision to move the council headquarters to the Pier Head. Of course, there may be other factors which affected the decision to do so, factors to which the council tax payer is not privy. We all want to see an efficient and forward-looking council in Liverpool, and a successful port and cruise terminal. But we all also want to know the true costs of those flights of fancy to which we are unwittingly being committed.

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