Savings from City Hall move could be half current estimate


Moving City Hall to east London could save the taxpayer 50% less than the Mayor has claimed, according to London Assembly Conservatives.

Sadiq Khan plans to move his Mayoral base – which is also home to the London Assembly – to the Royal Docks, in Newham.

He says leaving the current building, near Tower Bridge, would save the Greater London Authority (GLA)  £55 million over the next five years.

City Hall’s new home would be the Crystal, a sustainably powered exhibition centre in the Royal Docks, owned by the GLA.

The current building is rented from Kuwaiti firm St Martin’s Property Group for £12.6 million a year.

But the Mayor’s budgets have been hit hard by coronavirus, with less money coming in from council tax and business rates during the pandemic.

Mr Khan has a £493 million hole in his budgets over this finacial year and the next – though the move to the Royal Docks will save  just £3.2 million by then.

Now London Assembly Conservative group leader Susan Hall believes the plans could claw back far less cash than expected.

If City Hall remained in its current location, the Crystal could be rented out, along with offices in Transport for London’s Southwark base that have also been earmarked for Mayoral staff.

This could generate £23.5 million over the next five years, based on current rents.

Ms Hall also believes moving east would cut down the opportunities for commercial events at City Hall, which boost income.

The balcony and events space at the top of City Hall, known as London’s Living Room, has panoramic views of the city centre.

But the GLA could lose out on £3.74 million from events in the next five years if it moves to a less attractive location, based on current commercial income.

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These losses would cut down savings to £27.76 million over five years – just over half the Mayor’s estimate and less than £6 million a year on average.

And if the Mr Khan negotiated a rent reduction on the current building with St Martin’s those savings could fall to just £16 million over five years, Ms Hall said.

This would require a one third cut to rent, a possibility outlined in the GLA consultation on the move.

The Assembly Conservative leader accused the Mayor of “misleading Londoners” about the benefits of moving City Hall.

“This is yet another example of the Mayor putting PR before policy,” Ms Hall said.

“Instead of unveiling a serious proposal and considering alternatives for the future home of London’s regional government, he announced a rushed and misleading plan to get a good headline.”

She said the Mayor should “go back to the drawing board” and produce a new and better thought out scheme.

A spokesperson for the Mayor said the £55 million savings predicted from the move were calculated by GLA finance professionals.

“It is only necessary because the Government is not adequately funding local and regional government in London for the cost of tackling Covid-19,” they said.

Before the pandemic, City Hall was raising less money from hiring out space for public events, because those rooms were being used more by the Mayor and Assembly members, they added.

“Should City Hall relocate to the Crystal Building, space will be made available for hire and a new version of London’s Living Room will be created overlooking the Docks,” they added.

“The Greater London Authority would also benefit from significantly lower running costs – the consultation document is clear that this can be expected to offset any hypothetical loss of income from renting out The Crystal.”

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