Stephen Hughes, Chief Executive of Birmingham City Council, comments on recent media speculation as to the ‘true cost’ of the Library of Birmingham Project:
The capital cost of the project, which was originally budgeted at £193m has in fact been reduced already to £188.5m thanks to savings already achieved in the construction contract, and we are confident we can achieve further savings yet to drive down this cost further.
In common with the vast majority of public authority funded developments in the UK, the Council will be part funding the Library through Prudential Borrowing made available by Government to councils at preferential rates.
Of course this borrowing will attract interest over its lifespan, but this is no different to the mortgage or loan interest attracted by many hundreds of other property developments or home purchases entered into the UK every single day. The fact that this would be the case is something we have never hidden, and has always been expressed in various public reports over the past few years.
Adding the interest liability on such purchases onto the original purchase price in order to give a ‘true cost’ is certainly not common practice in evaluating the cost of a building, otherwise estate agents would have to advertise even the most meagre of residential properties as costing for example £300k despite the actual value being perhaps less then half that figure.
It seems even more inappropriate to add onto the headline cost of the building project the ongoing budget for major repairs and maintenance of the building, once it has been completed. The Council is responsibly providing for such expenditure in its long term financial strategy but these are two very different things.
Using this the same approach, one can only speculate as to what ‘true cost’ the Post would put on the £798m new Wembley Stadium, the maintenance costs of which would far exceed those of the Library of Birmingham. Or on a smaller scale, how it would describe the ‘real cost’ of a standard residential property, which would inevitably be subject to many significant repair and replacement expenses over the course of its lifetime.
In conclusion I would like to reassure the citizens of Birmingham that the Council has taken a very prudent approach to financing this much needed building, and remains committed to further driving down the cost of the project over time. I would also point out that We are confident that our investment in the Library will more than be recouped in the long term through the extra investment, spending and profile it affords Birmingham, and money and jobs this will attract into the local economy.”
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188mn GBP is still a LOT of money B’ham residents and BCC do NOT have (that’s why resort to lending – or ‘buy now, pay later’). We already have a perfectly adequate central library (who cares it’s not everybody’s ideal of beautiful building? I think the proposed new one is much worse!). My 2p. In peace, Rianne (B10)