The council is defending itself over accusations that the new Birmingham Library will provide poor value for money. Paul Dale reports.
Hard-headed local authority negotiators persuaded a major Midland construction firm to build a far larger civic library than originally proposed at a significantly cheaper cost, Birmingham City Council leader Mike Whitby has claimed.
Hitting back at claims that the new building in Centenary Square is too expensive, Coun Whitby released part of a confidential report showing that contractors Carillion agreed to cut construction costs by £1,110 per square metre in return for winning a contract to build the project.
On top of that, the firm is to make the seven-storey building some 5,000 square metres larger than initially planned at no additional cost to the council.
It means the library will be 15 per cent larger than planned, and cheaper to build, he said.
Coun Whitby told a scrutiny committee reports that the new library would cost council tax payers up to £590 million over 60 years were unfair.
The headline cost is £188 million but repayments on a loan the council is taking out plus other costs take the bill to £384 million.
A generous allowance for maintenance over the expected 60-year lifecycle of the library makes a grand total of £590 million.
Coun Whitby (Con Harborne) insisted he was following “custom and practice” and was financing the library in exactly the same way that the council had paid for other large-scale capital projects such as the NEC and ICC.
He denied that the exact financial implications had been hidden from the public, although a report giving the figures was tabled in a private cabinet session. The council leader agreed to a scrutiny committee request to publish parts of the cabinet report not deemed to be commercially sensitive.
He added: “We have identified how we will fund the library and we have identified how we will service the borrowing costs.”
He insisted that further “significant” savings to the £188 million construction cost could be found.
“This is a worst-case scenario. It only gets better from now on in,” he added.
The council is seeking private sector sponsorship of up to £34 million, which could result in a company purchasing naming rights for the new library.
Labour councillors failed in an attempt to force the cabinet to reconsider the contract for the library.
Deputy Labour group leader Ian Ward accused the council leader of misleading people by claiming huge savings in construction costs, when the truth was that loan repayments were driving up the total cost of the project far beyond anything that Coun Whitby had admitted.
“You are raising an extraordinary sum of money through borrowing and the total cost will be even greater if you fail to attract sponsorship,” Coun Ward (Lab Shard End) added.