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, environmentally-friendly 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 yesterday.
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 that the offices scheme can go ahead.
While the Central Administrative Buildings project will deliver savings of £100,469,000 over 10 years, the cost will be £100,375,000.
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.
Deputy council leader Paul Tilsley said the Woodcock Street offices would still save a substantial amount of money because the council would be able to move hundreds of employees out of costly rented accommodation elsewhere in the city centre.
He said the cost of building Woodcock Street was the equivalent of rental values of £5.27 per sq ft.
“This represents excellent value for money,” Coun Tilsley (Lib Dem Sheldon) added.
Coun Neville Summerfield (Con Brandwood), cabinet member for regeneration, said: “We need buildings that support ways of working that are modern, efficient and fit for purpose, based on the technologies available.”
Opposition Labour group leader Sir Albert Bore said he would continue to object to building offices on the Aston Science Park. The proposal went against the “whole ethos” of a science park, which was to provide accommodation for emerging science-based firms.