Council eyes “significant savings” after terminating PFI contract for three buildings early

The Cabinet at Redcar & Cleveland Borough Council has agreed to serve notice on a Private Finance Initiative (PFI) contract for three buildings.

The local authority said the decision would see the gradual closure of Belmont House in Guisborough, with face-to-face council services continuing to be delivered from Guisborough Library. Belmont House and the land will now be marketed for sale or lease.

“This will generate significant savings, which would be used to maintain and improve public services at a time when the council is facing severe financial pressures,” the local authority said.

The PFI contract, which was due to expire in 2027, covers Seafield House in Redcar, Belmont House in Guisborough and the South Tees Business Centre.

Seafield House and the South Tees Business Centre will remain open and operational as at present, the council said.

Redcar & Cleveland submitted a business case to the Government, which part-funds the PFI contract, in January 2022, outlining the potential savings if notice was served early on the contract. Since then, the Government has granted the council its support.

The council said it had adopted a hybrid-working model for staff whose role was suitable to working away from the office for part of the week and this meant there was now significant surplus office capacity across its buildings.

Cllr Glyn Nightingale, Cabinet Member for Resources at Redcar & Cleveland, said: “The decision to terminate the PFI contract will generate significant financial savings, not only through the gradual closure of Belmont House, but through reduced running, energy and management costs across all three buildings. 

“It was important that residents of Guisborough still have face-to-face access to council services and the support they need from the council. Guisborough Library is a great place for this as one of the council’s community hubs.

“We will seek the best possible outcome for Belmont House itself to ensure this provides added value to Guisborough residents. We are working closely with affected staff to ensure they have an alternative working environment which suits them and enables them to maintain and improve services to the public.”