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By Ian Dipple Friday 25 April 2014 Updated: 28/04 09:28
TAXPAYERS could potentially have lost out on thousands of pounds as a result of the deal to allow Barclays bank to break its lease on a town centre building.
Documents seen by the Standard show Redditch Borough Council accepted £1.2million from the bank for the lease on Threadneedle House despite it still having 19 years to run. But it had no break clause, meaning the authority could have refused and carried on collecting the £105,000 a year rent. Had they done so over the period it would have netted more than £1.9million without any increases in rent over the period.
At the time of the deal in early 2013 the council received advice the offer was at the 'upper end' of what could be expected but was only good value if the building did not remain empty for a period of time. The plan was to relocate staff from Bromsgrove District Council but that never materialised and Threadneedle
House is now costing the council about £72,000 a year including security and utilities.
The documents show there was criticism of the way the decision was taken as urgent business, meaning it was signed off by senior councillors and officers without being debated by the executive committee.
That was partly due to concerns Barclays would withdraw the offer leaving the council with nothing if they wanted to use the building for redevelopment in the future, while council chiefs were also eager to use the money to support that year's budget. In the end £400,000 of the cash was used to balance the books in 2012/13.
The council has since put the building, valued at £680,000, up for sale as to re-let it would require £850,000 of refurbishment work. But Conservative councillors have criticised the decision to sacrifice the £45,000 a year the authority receives from the Post Office which currently has 19 years left to run on its lease.
Amanda de Warr, head of customer support and financial support, said the £1.2million figure was based on the value of the 19-year leases, the value of the empty building after that period and the value of the land for the purposes of improving the town centre.
She said experts confirmed the valuation was realistic and reasonable providing there were no unusual delays in the sale and the property was now being actively marketed.
"Allowing Barclays to break their 19-year lease for £1.2million was deemed to be an urgent decision at that point in the negotiations to ensure the council benefited from the capital receipt. It also frees up the site to be used for town centre purposes as envisioned. Rather than standing empty, it has become available to be used to support the goals of local plans and the town centre strategy."
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