Sadiq Khan’s claim City Hall move would save £61m branded ‘misleading’ by AM committee - will only be £37m

Sadiq Khan has been criticised by a key London Assembly committee for “misleading” claims that the relocation of City Hall to the Royal Docklands would save £61m over five years.

An investigation by AMs found that the move actually only saved £37m and was beset by other problems.

A report by the GLA Oversight Committee said there was a poor consideration of staff welfare - with people to working in an “incomplete building with insufficient heating” - and contractors were paid £85,000 to stand down for five days.

The capital’s local government headquarters - home to the mayor and the London Assembly - moved from its former location on the Thames in Southwark, to the Crystal, in Kamal Chunchie Way, Newham, in March 2022.

It was claimed the relocation from a rented building to a site owned by the Greater London Authority (GLA) would save the city £61m over the next half a decade.

But the move was beset by delays, with construction work overrunning and staff move in dates pushed back.

Assembly members have criticised the mayor for “misleading” figures regarding the savings from the move - with the true cost now said to be just £37m over the next five years.

City Hall representatives have written to the mayor highlighting issues with the move and the finances of the relocation.

Full occupation of the new City Hall at Royal Docks was originally slated for October 2021.

But the mayor and the London Assembly only took up permanent residence in the new building in March 2022, following a delay of five months.

An investigation by the GLA oversight committee laid out a series of concerns, including:

• ‘Misleading” cost savings of £37m rather than £61m;
• Spending nearly £100,000 on holding early meetings at the new City Hall site;
• “Aggressive” deadlines which caused “unnecessary uncertainty and confusion”;
• Staff having to work in an “incomplete building with insufficient heating”;
• Contractors paid £85,000 to stand down for five days;
• “Unrealistic” and “unwarranted” timelines;
• And poor consideration of staff welfare.

The letter stated: “The committee felt that there was insufficient consideration of staff welfare when deciding on the first meetings at the new City Hall.

“Support staff and security staff were required to work for many hours in an incomplete building with insufficient heating.

“In future staff welfare should be a key consideration when trialling new facilities.”

It continued: “You have repeatedly stated that savings from the relocation would amount to £61 million over five years, when compared with staying at the former City Hall at Queen’s Walk on the original terms of the lease.

“However, the landlord was actively working with the GLA to agree a reduced rental offer on the lease and, as described in the Mayoral Decision, this effective ‘do nothing’ option would already have saved £24 million.

“This makes the real savings from the relocation as £37 million over a five year period.

“Any other interpretation overestimates the impact of the move.

“The true savings have been established as £37 million over a five year period and this figure should be used in all future communications from the Mayor and GLA.”

Caroline Pidgeon, Liberal Democrat assembly member, said: “A theme of the City Hall relocation was the ‘aggressive’ timescale of the project, which appeared unwarranted to us.

“While no one could have predicted with any certainty the impact of the pandemic, such an unrealistic timescale resulted in unnecessary uncertainty and confusion for staff.

“We also question whether the £100,000 incurred to hold the early meetings at the new City Hall, before it was finished, was a good use of public money.”

Ms Pidgeon, the former chairman of the GLA oversight committee, added: “In the new building, GLA employees are expected to be in the office two to three days per week, but with allocated desks for each team limited to 10% of the size of the team, we are left wondering whether this expectation is realistic, given the limited number of drop-in desks.

“And most importantly, the claim of a £61 million saving over 5 years was clearly misleading – with the real saving somewhere in the vicinity of £37 million.”

She said: “Now we have taken residence in the new building, we need to get on with the job of holding the mayor to account and all these issues need to be transparently addressed.”

The letter calls on the mayor to publish redacted versions of the detail behind his decision making around the project.

A spokesperson for the GLA said: “The relocation of City Hall is saving £61m over five years to invest in London’s recovery from the pandemic and protectvital services including policing, the London Fire Brigade and the transport network.

“The new City Hall is already proving to be popular with both staff and Londoners - and a busy and vibrant home for London government.

“The mayor thanks the oversight committee for their work and will respond in due course.”