The slump in land prices has eaten into an attempt by Birmingham City Council to save money by reducing its sprawling offices portfolio.
A 15-year scheme to build new premises for 9,000 administrative staff, while disposing of old leased buildings, was supposed to result in net savings of about £5 million. That figure has been reduced to £94,000, members of the cabinet were told.
The project, part of a huge business transformation scheme, relied on selling land in order to raise £50 million toward the £100 million cost of the new buildings – including purpose-built offices in Woodcock Street on Aston Science Park.
But council leaders have decided to suspend land sales until 2011, and take out a short term loan of £91 million so the offices scheme can go ahead.
A council spokesman said the scheme would deliver “significant improvement” to service delivery as well as providing a better, more efficient working environment for employees. It will also support the council’s plans to reduce its carbon footprint and improve sustainability.
But opposition Labour group leader Sir Albert Bore said he would continue to object to building offices on the Aston Science Park.
“This is the wrong place to build council offices and does nothing to encourage technology companies to come to Birmingham,” he added.