Peterborough City Council poised to amend budget to buy land beneath its offices with borrowed cash

Senior councillors have unanimously agreed to support Peterborough City Council’s (PCC) purchase of the land under its offices at Fletton Quays.

PCC’s Conservative cabinet, chaired by leader Wayne Fitzgerald, approved the acquisition of Sand Martin House’s freehold at a meeting this week – which will mean amending the council’s budget.

The council will have to borrow money to complete the transaction, PCC documents say, although savings are anticipated in the long term as it would no longer have to pay for the buildings' leasehold.

A purchase price has been agreed with the land’s current owner, Legal & General Assurance (Pensions Management) Limited, Cllr Andy Coles told the cabinet, although the sale is not yet fully complete.

After his introduction, the remainder of the cabinet’s discussion on the matter was held in a private session – from which public and the press are excluded – so that members could refer to a document restricted from general access because it refers to the “financial and business affairs of the Council”.

Decision remains subject to full council approval

But it will be discussed again at a meeting next month as the cabinet’s decision remains subject to full council approval.

This is because the budget they voted through in February would change if the sale goes through.

Cabinet approval will, however, help to support the sale ahead of that, Cllr Coles said, as Legal & General Assurance “requires comfort that the council is committed to the purchase”.

Sale will lead to savings, council says

The purchase will lead to “financial savings in the short, medium, and long term”, PCC says, as well as giving it “full control of the use of the building”.

“The costs of funding the borrowing for the acquisition have been modelled against the projected future rental costs for the remaining life of the lease,” council document say.

“The rental costs are in excess of the costs of borrowing for the next 20 years and will additionally provide a saving for the Council in the next five years which will be incorporated within the Council's Medium Term Financial Strategy in due course.”

As well as the land under its offices, PCC would also acquire the land under their surrounding shops, cafes and car parks if the sale goes ahead.

The next full council meeting is scheduled for 22 May, after the local elections on 4 May.