The mayor of London, Sadiq Khan, is planning on leaving the City Hall building in central London in an attempt to save £55m in the wake of the coronavirus crisis.
The Norman Foster-designed glass structure near Tower Bridge has been the official home of the Greater London Authority and housed the mayor’s office since 2002, with Ken Livingstone and Boris Johnson both former occupants.
Khan has said that without government intervention the authority will struggle to meet the significant costs of the recovery from Covid-19 and faces a budget shortfall of up to £493m over the next two years.
He has proposed creating a new City Hall at the Crystal building in Royal Docks, east London, which is already owned by the GLA.
“My first priority will always be to protect funding for frontline 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,” Khan said.
“Leaving our current home would save £55m 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 current City Hall building, which sits on the banks of the Thames, costs the GLA £11.1m a year in rent to its private landlord, the Kuwaiti-owned St Martins Property Group.
The terms of the lease were originally negotiated by the government in 2001 for a 25-year period. However, they allow for a break in the contract after 20 years, in December 2021, which Khan said was the first and only chance the GLA had to consider leaving.
Notice has to be given this year and a decision is needed by September. There is an expectation that the rent will rise to £12.6m per year beyond Christmas 2021.
The Crystal building in east London was built by Siemens in 2012 and is now owned by the GLA Land and Property Limited (GLAP), a subsidiary company of the GLA. It is considered to be a far more environmentally friendly building than the current City Hall, and has lower running costs.
Khan said: “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.”
He said the GLA faced unprecedented losses because of Covid-19 from business rates and council tax income, and he has warned that this could lead to significant cuts in public transport and the emergency services.
Last week Khan announced he would be taking a pay cut of 10%, to be reviewed after six months, in solidarity with the economic situation facing frontline workers. He has never taken a pension as mayor.
He will now begin a formal six-week consultation on the relocation plan with the London assembly, Unison, the Public and Commercial Services union, the chairs of GLA and Mayor’s Office for Policing and Crime (Mopac) staff networks, and all GLA and Mopac staff.
