Mayor to Consult on Relocating City Hall to Protect Services
- Leaving City Hall building would save £55m over five years at a time when the GLA Group is facing unprecedented financial emergency due to Covid-19 crisis
- The savings would be used by the Mayor to protect front-line public services and to invest in London’s economic recovery
- Moving to The Crystal, a building already owned by the GLA, would help kick-start huge regeneration project in the Royal Docks, East London
The Mayor of London, Sadiq Khan, announced on Wednesday 24th June, a consultation on plans for the Greater London Authority (GLA) to leave the current City Hall building next year and move its headquarters to The Crystal building in the Royal Docks.
The move would save the GLA Group £55m over five years and would help the Mayor both to protect front-line services as much as possible from cuts and to invest in jobs, skills provision and other initiatives to aid the economic recovery from Covid-19.
Last week, the Mayor revealed that unless the Government properly invests in London’s economic recovery and provides the necessary financial support, the GLA Group will suffer an unprecedented financial emergency as a result of the Covid-19 crisis – just like other local and regional authorities across the country.
Sadiq also declared last week that he would be taking a personal pay cut of 10%, to be reviewed after six months, in solidarity with frontline workers and all those affected by the pandemic. This comes on top of the 11% saving to taxpayers arising from the Mayor’s decision in 2016 not to take a pension, unlike his predecessors.
Overall, the GLA Group faces a budget shortfall of up to £493 million over the next two years due to an unprecedented loss, because of Covid-19, of business rates and council tax income, with losses expected to continue in future years. Sadiq has warned that this will mean significant cuts across the entire GLA Group – including to public transport, the Metropolitan Police Service and the London Fire Brigade – which could hugely hamper the economic recovery effort and risk Londoners’ safety.
Against this backdrop, the Mayor is committed to protecting and investing in the things that matter most to Londoners. He wants to focus his potentially severely limited budget resources on front-line public services and supporting the economic recovery, rather than on high City Hall building costs.
The lease for the City Hall building was granted in 2001 for 25 years, but it allows for a ‘break’ in the contract after 20 years, in December 2021 – the first and only chance the GLA has to consider leaving.
Notice has to be given this year and a decision is needed by September so there is time to plan and carry out the move.
The City Hall building currently costs the GLA £11.1m a year in rent to private landlords Kuwaiti-owned St Martin’s, service charges and rates.
The Mayor believes this is above the market rent (even before the impact of Covid-19) and the contract in place means that this figure is due to rise even further – to £12.6m per year beyond Christmas 2021. By contrast, The Crystal is already owned by the GLA and its “outstanding” rating for environmental sustainability means its running costs will be lower than the current City Hall.
The GLA moved into the current City Hall building in 2002 as part of the regeneration of the More London area near London Bridge. With this regeneration work now complete, moving the seat of London’s government to the Royal Docks could have a similar impact on a much larger regeneration project in East London, which is set to lead to 25,000 new homes and the creation of 60,000 new jobs within the next 20 years, supported by the arrival of the Elizabeth line.
The Mayor will now begin a formal consultation on this proposal with the London Assembly, UNISON, PCS, the Chairs of GLA and Mayor’s Office for Policing and Crime (MOPAC) staff networks, and all GLA and MOPAC staff. These consultations will last for six weeks.
The Mayor of London, Sadiq Khan, said:
“My first priority will always be to protect funding for front-line services, including public transport, the Met Police and the London Fire Brigade. That’s why I’m consulting on plans for the GLA to leave the current City Hall building next year and relocate to The Crystal at the Royal Docks in Newham.
“In normal times, it would be standard practice for any Mayor to consider utilising the lease ‘break’ clause on the City Hall building that becomes possible this year, and to view it as an opportunity to ensure Londoners were getting the best value for money. In the current financial context, and with the looming black hole in London’s public finances, it would be negligent not to do so.
“Leaving our current home would save £55 million over five years, which would help us to protect and invest in the things that matter most to Londoners, as well as supporting the regeneration of the Royal Docks.
“The Crystal is a highly sustainable building on the site of London’s most ambitious regeneration project, where the GLA and Newham Council are working together to create a new commercial district and visitor destination with thousands of new homes and jobs.”
Rokhsana Fiaz, the Mayor of Newham said:
“I’m delighted that City Hall could be relocating to the iconic Crystal Building in the Royal Docks in Newham. The stunning Royal Docks, with a water area of nearly 250 acres, is at the heart of one of the most exciting renovation developments in the capital, bringing more jobs, housing and a thriving new business district to East London.
“It’s a great opportunity to have London government in our borough and I’m looking forward to welcoming the Mayor, Assembly Members and the City Hall team to this magnificent location which is a neighbourhood, rich in history, thriving with ambition; and with a long-standing diverse community who will welcome them warmly.”
Jeremy Rees, Chief Executive Officer, ExCel London, said:
“We look forward to welcoming the Mayor and the Greater London Authority to the Royal Docks. This part of London is undergoing enormous change and will soon be home to thousands of new homes and jobs. I have no doubt that the relocation of City Hall to the Crystal Building could act as a catalyst for social and economic regeneration in the years to come.”
Bek Seeley, Managing Director Development, Europe for Lendlease, said:
“This is a terrific move, which demonstrates real confidence in the revival of the Royal Docks. We are working at full steam to bring forward a major regeneration of Silvertown Quays, just a stone’s throw away from the Crystal and we look forward to welcoming more residents, businesses and visitors to an area of east London that’s brimming with potential.”
The proposal is for the Mayor and the London Assembly to be based at The Crystal, which will be renamed as City Hall. The GLA will also lease one floor of Transport for London’s (TfL) Palestra building in Southwark for other staff. This will allow for improved collaborative working between the GLA and TfL. As part of the plan, the GLA will also enable staff to work from home more regularly to make the best use of the new office space that would be available.