A proposal to serve notice (bring to a close early) on a Private Finance Initiative (PFI) contract for three buildings is to be considered by Redcar & Cleveland Borough Council’s Cabinet.
The aim is to generate significant savings, which would be used to maintain and improve public services at a time when the Council is facing severe financial pressures.
The PFI contract covers Seafield House in Redcar, Belmont House in Guisborough and the South Tees Business Centre. It is due to expire in 2027.
The Council submitted a business case to the Government, which part-funds the PFI contract, in January 2022, outlining the potential savings if notice was served early on the contract.
The Council has adopted a hybrid-working model for staff whose role is suitable to working away from the office for part of the week and this means there is now significant surplus office capacity across its buildings.
The Cabinet will consider a proposal – supported by the Government – to close Belmont House and market the building and land for sale or lease.
A date for any closure has not yet been confirmed, but it would be a gradual process and the Council would work closely with staff who are currently based at Belmont House to ensure they have an environment to perform their roles effectively.
The Council would maintain a face-to-face service for residents in Guisborough if the proposal is approved.
Seafield House and the South Tees Business Centre would remain open and operational as at present.
The Council would generate financial savings by terminating PFI deal and by the eventual closure and disposal of Belmont House and through reduced running and management costs in the three buildings.
Cllr Glyn Nightingale, Cabinet member for Resources, said:
“We have carefully considered options for the future use of our office buildings with a view to providing the best value for money for our residents and to maintain and improve our services to the public in the face of financial pressures.
“The Council recently adopted a policy of hybrid working for staff who can work from home for part of the week and this provides flexibility in how we use our buildings in the future.
“The Government is supporting our intention to serve notice on the contract on three of our buildings. This will provide a significant saving for the Council and this saving will be used to protect services and jobs.
“The Cabinet will consider a proposal to start a gradual process of closing Belmont House, with a view to either selling or re-leasing the building. It is proposed that we will retain both Seafield House and the South Tees Business Centre and both will remain open
“Should the decision be made to close Belmont House, the council is committed to retaining a point of contact for council services in Guisborough. We will seek the best possible outcome for Belmont House itself. We are working closely with affected staff to ensure they have an alternative working environment which suits them and enables them to maintain and improve services to the public.”