Councillors reject advice of hedge fund peer Lord Fink, and press ahead with Town Hall sale

Published: 27 January 2011
by RICHARD OSLEY

LABOUR Party chiefs have ignored a warning over their plans to sell council offices in King’s Cross and build new headquarters during an era of unprecedented spending cuts.

On a night of angry exchanges at the Town Hall, the decision to go ahead with the move to brand new premises was likened to the old Labour government’s decision to invade Iraq without hard evidence to justify it.

And instead of taking advice from one of the country’s leading businessmen on the financial risk connected to the switch, Cabinet councillors who met last Wednesday went on the offensive and effectively threw Lord Stanley Fink’s criticism back in his face.

The leading hedge fund manager and co-treasurer of the Conservative Party nationally, was described as “frankly silly”.

Finance guru Lord Fink, who was ennobled last year, had met with council officials ahead of the Cabinet meeting to explain his concerns.

The owner of an apartment in the refurbished St Pancras Station development, the peer told the New Journal that no business would have taken the council’s financial gamble of building the new offices planned for a site close to St Pancras International station. Lord Fink warned that the project was fraught with risk at a time of unpredictable interest rates and property prices.

But Councillor Theo Blackwell said opponents of the scheme had come up with “spurious” criticisms. 

He mocked Lord Fink for questioning whether there was any environmental sense in allowing the Town Hall Annexe in Euston Road to be sold and knocked down, when it could be retained and refurbished.

“I do think the points made by the experienced, ennobled Lord Fink do convey a slight misunderstanding – or more than a slight misunderstanding of the council’s position,” said Cllr Blackwell. 

“For example, it is not the primary purpose of this project to reduce the carbon footprint of the council. So the comment that the construction build will create a certain amount of CO2, more than it will save, is frankly silly. 

“If you logically extended that argument, you wouldn’t be building anything in London, and I don’t think that’s really a credible position for someone who’s a hedge fund holder to hold if they want to be consistent in themselves.”

Another critic of the move, Bill Reed, from the Friends of Argyle Square Gardens, was told by Cllr Blackwell he had come up with clichéd and hackneyed views of local government in his deputation before councillors.

Mr Reed said Camden had prepared a report making the case for new offices without considering the alternatives, adding: “You intrinsically know that this is not the time for a flashy new Town Hall, but you have been told by people you trust and rely on that it’s the only solution. It seems to me that the report you are about to vote on is Camden’s very own dodgy dossier, where facts are obscured or distorted to arrive at a pre-determined conclusion.”

The basics of the plan are to sell the Annexe next to the main Town Hall and move staff to the new building which will include a new leisure centre and library. Other council properties, including the district housing office in West Hampstead, will be sold with services sent to the new HQ.

Camden is emphasising that the offices will not be plush new headquarters but an important alternative to the Annexe, which officials claim is riddled with problems such as long-term plumbing issues and faulty lifts. The council say there is a £70million bill attached to a “do nothing approach”.

But opponents fear that the developer who buys the Annexe will use the site – a prize spot close to the Eurostar rail link – to build an imposing tower block, possibly for a hotel. 

The site was described as a “signature corner” by Cllr Blackwell at the meeting, a reference to its attractive location for developers.

There was also a warning from Conservative group leader Cllr Andrew Mennear, who opposed the scheme even when his own party was part of a power-sharing coalition with the Lib Dems in Camden in favour of the move. He said: “We are buying large offices rather than repairing community assets in the borough which we are then scrambling around to find money to fund. You should have the courage to say this is not the way forward.”

The Liberal Democrats have maintained their lasting support for the change.

Cllr Blackwell said the cabinet had to make the “best call” it could. 

“I won’t respond to some of the clichés or the hackneyed views of local government that we are just pawns of officers and consultants,” he said.

“The fact is that we are actually coming into this very, very difficult decision with a view to minimising the amount of money the council spends in the long term.”

He added: “Is it risky? Yes. Do I have confidence that we can manage the risks? Yes. What is the alternative to not doing this? Massive risk on behalf of the taxpayer.”

Camden’s treasurer, Mike O’Donnell, one of the Town Hall’s most senior civil servants, said the project had “sensitivities and risk”, but added: “My view is that this is based on a prudent set of assumptions.”

‘Dodgy dossier’ Excerpts from Bill Reed’s deputation

“IT seems a pity that Lord Fink’s comments (and let’s face it, he did create the world’s largest hedge fund, managing $80billion) were dismissed so lightly, when all but one Cabinet member declined to meet him. 

“I have also spoken to many people about the Annexe, and every single person who has actually made money out of property thinks the current proposal is as crazy as we do, particularly in these straitened economic times. As far as we can see, its proponents are officers rather than councillors, supported by external consultants, who, like spreadsheets, have the ability to tell you what you want to hear, and remember, not all them exactly covered themselves in glory dealing with their own property requirements.

“Members of the Cabinet may now be in the same predicament that I experienced in the build-up to the Iraq war, that I have to admit supporting at the outset. I instinctively felt an invasion of Iraq was wrong, but Tony Blair – the Prime Minister I helped elect – was all for it, so I assumed he must know something I did not, and, given my greater trust in politicians then, gave him the benefit of the doubt, and went along with it. The rest is history. 

“Perhaps some Labour members are in a similar position now. You intrinsically know that this is not the time for a flashy new Town Hall, but you have been told by people you trust and rely on that it’s the only solution. It seems to me that the report you are about to vote on is Camden’s very own dodgy dossier, where facts are obscured or distorted to arrive at a pre-determined conclusion.”