Councillors to consider next stage of Shirehall refurbishment project

How the front of Shirehall may look

Shropshire councillors will be asked to approve moving to the next stage of plans to refurbish and reconfigure the council’s Shirehall headquarters in Shrewsbury at their next meeting*.

In July 2017, a specialist team of architects and property specialists considered options to reconfigure and refurbish Shirehall in order to meet the council’s priorities (stage 1). In December 2017 Cabinet considered their feasibility report and agreed, in principle, to move forward the option of refurbishing the entire building.

The necessary due diligence and feasibility work around this option (stage 2) has now been completed and councillors will now be asked to approve the spending of £1.15m capital funding to support the next, detailed design stage of the development (Stage 3).

Stage 3 of the work will see more detailed designs and costs worked up and an application for planning approval made, as well as work on the strategy to procure the contractors for the final refurbishment work, before a detailed project budget, developed designs and a full business case are presented to full Council in March/April 2019.

If approved, work is set to be completed by autumn 2021.

The overall cost of the project is estimated to be £24.1m but this spend is set to be met by the proposed income generation and savings, with a yield of 7% anticipated.

How Shirehall reception may look

Steve Charmley, deputy leader of Shropshire Council, said:

“These plans offer a huge range of opportunities. They’ll make Shirehall better suited to modern working, providing our staff with a much improved place to work. They’ll save us money while reducing the cost of heating, lighting and maintaining the building, and will create income-generating opportunities for Shropshire Council through us acting as landlord for some of our public sectors partners. By creating a ‘Civic Hub’ Shirehall will also become much more accessible to the public and the local community.

“With the money spent set to be earned back through the savings and income generated, and a with a yield of 7% expected, this will be an excellent investment.

“Over the summer months we took the opportunity to pause the Shirehall work briefly to consider the opportunity presented by the purchase of the shopping centres to relocate the Civic Hub in the town centre. However, the outcome of this work showed that Shirehall remains the most cost effective, lowest risk and quickest option to deliver.”

*The report was originally due to be considered at full Council this week (20 September 2018) but won’t now be considered until the next meeting of full Council due to IT issues resulting in some councillors being unable to access all of the relevant reports. This will give councillors more opportunity to properly consider the proposals before making a decision.

Reasons for the planned refurbishment

How the partner entrance at the rear of Shirehall may look

There are a number of reasons for the planned refurbishment:

• Provide office space for council staff: Directly employed Shropshire Council staff will continue to need a suitable office base. Shirehall can continue to serve this purpose. It is owned by the council, and therefore in the council’s control to adapt and reconfigure to meet its needs. It has good transport links to the rest of the county. It is a well-known building, which, whilst of its time, has a provenance and striking aesthetic, which is befitting to a local authority and the local community.
• Need to modernise the building: Shirehall is now ‘of its time’, resolutely exhibiting almost exactly the same plan as in its original drawings. Furthermore the building in its current state presents an image to the public and partners which is far from ideal, appearing old fashioned and unwelcoming and disorientating for staff and visitors alike.
• Investment urgently required: The building is structurally sound and its key mechanical and electrical systems remain viable, but a number of years with minimal planned maintenance has had a negative impact on the quality and performance of the building, which now needs to be addressed urgently. A number of key elements have exceeded their expected lifespan, and significant investment is required to bring the building to modern standards.
• Revenue generation: In the light of reduced revenue funding and changes to business rates the council’s focus for our own land holdings is on revenue generation and Shirehall offers great potential for linking with public and private sectors partners, both through the One Public Estate programme and via commercial opportunities, to maximise the potential of the site to generate ongoing revenue contributions.
• Cost savings through sharing: Sharing Shirehall with other public sector bodies via the One Public Estate programme, will also enable us to share a number of business functions and operational costs, leading to savings and potential efficiencies.
• Greater commercial focus: Shropshire Council is also seeking to become a more commercially focused organisation, but the image Shirehall currently portrays to business partners is tired and out dated. Our base needs to demonstrate that we are open to business and a safe set of hands in which to trust the future place making of Shropshire.

Investment in improvements to Shirehall will provide a number of significant benefits and opportunities including:

• Improved public perception, customer experience, revitalised sense of civic pride and sense of place.
• Improved working environment for staff, leading to improved efficiencies through flexible and agile working and opportunities for collaborative working.
• Reduced running costs, through significant energy savings, increased efficiencies and reduction in empty desks/meeting room voids, along with reduced maintenance costs.
• Rationalisation of public estate to generate further letting/disposal opportunities, making land available for housing and business growth, reduce overall running costs and maintenance liabilities.
• Rental income from third parties, along with opportunities for some shared facilities, given the location of Shirehall on a key town centre access route into and its proximity to residential areas.
• Opportunities to provide much needed improvements to the car parking requirements and the development of an effective travel plan.

This is project acknowledged by Central Government Cabinet Office, the Ministry of Housing Communities & Local Government and the Local Government Association as being an exemplar within the One Public Estate programme and which could be used as a demonstrator of good practice to other local authorities.

Background information

How will the work be paid for?

The work will be funded from Shropshire Council’s ‘capital budget’. This is money that legally can only be spent or invested on assets and infrastructure projects and not on the direct provision of council services. Any money earned or saved as a result of a capital project can then be added to the council’s ‘revenue budget’ to help fund key, frontline, council services.

Stage 1 and stage 2 work

At stage 1 the consultants recommended a significant investment to address the problems with the building and achieve the desired project objectives.

It was agreed that a sum of £300,000 should be added to the capital programme to enable to project to proceed to Stage 2, which would provide significantly increased certainty around the project costs and the business case.

Activities carried out in Stage 2 included:

• Due diligence on the existing building, in the form of technical surveys and research into existing systems.
• Concept designs for the building and the external areas and spatial planning.
• The preparation of a workplace strategy, based on the emerging policies and aspirations around transformation and agile working, as well as good practice.
• Discussions with third parties to identify letting opportunities.
• Consultation with directors, officers, councillors and other key stakeholders.
• Financial modelling and work to build the business case for the project.
• Early work on establishing the BREEAM and sustainability principles and options for carbon reduction and energy saving.
• Early work on a parking strategy.

Shrewsbury town centre consideration

Before submitting this report for approval, the opportunity was taken to pause the work briefly to consider the opportunity presented by the purchase of the shopping centres to relocate the Civic Hub in the town centre.

A report, was commissioned to evaluate the Shirehall Redevelopment Project against the potential of other new build options in Shrewsbury town centre. Its purpose was to assess the viability of the project, in the context of Shropshire Council’s wider estate and ask whether the Shirehall refurbishment proposal is the most sustainable and effective solution.

The outcome of the appraisal demonstrated at a high level that Shirehall remains the most cost effective, lowest risk and quickest option to deliver.