Northern Rock tower deal will go ahead despite opposition
May 12 2009 by Sam Wood, The Journal
A DEAL to buy Northern Rock tower is set to go ahead despite moves by opposition councillors to call-in the decision.
Newcastle City Council’s Labour group called in the decision by the Liberal Democrat decision-making executive to approve the purchase of the building in partnership with eaga.
They claimed the buy-up of the 10-storey Gosforth tower block for a rumoured £22m could put off other investors from the city and questioned why councillors had made such a decision.
When the original decision was made in April Labour leader Nick Forbes stormed out after arguing the decision should have been made in a public forum.
Coun Forbes said: “This is an opportunistic move by the council. They are speculating on property prices rising and it is a big risk with tax payers money.
“There are other projects this money should have been spent on.”
But the ruling party hit back at Labour’s claims in a report put before two scrutiny panels.
And at a meeting at the Civic Centre, the motion to send the decision back for further discussion was defeated by seven votes to six.
Lib Dems say the purchase will boost the economy by creating and securing jobs and will also bring cash into the council and accused Coun Forbes of throwing the plans into doubt.
Coun Peter Allen, executive member for resources, said: “We believe that there is a strong case for the acquisition of the Tower and its lease to eaga – it brings new jobs into the city, supports the local economy and provides a new source of income for the council to invest elsewhere and help keep down council tax.
“This report deals with all the questions raised by Coun Forbes. Many of the answers were already in the original report and Coun Forbes also had a private briefing by officers before the executive.”
As revealed in The Journal the city council is set to form a joint company with green support services firm eaga to tender for contracts in things like payroll and customer service. And the Tower will be leased to eaga to be used as an HQ, with the company transferring 400 staff from their office at the Watermark in Gateshead to Gosforth, as well as recruiting 300 new staff to work on the Digital Switchover programme.
The council will also move 200 people from the Civic Centre and Scottish Life House into the Tower, with eaga sub-letting office space back to its landlord. The board of Northern Rock has approved the deal to sell the Tower to the council.