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28 July 2006

City prices land ministers with £2.5m bill for renting property


SOARING city rents have landed the Scottish Executive with a bill of £2.5 million a year for leasing property in Edinburgh.

On top of the office buildings it owns - like St Andrew's House in the city centre and Victoria Quay at Leith - the Executive leases seven properties in the Capital.

But the leasing bill has rocketed from £1,147,912 in 1999-2000, the first year of devolution, to £2,453,739 last year.

More than half of the cash goes to rent an office block which the Government sold off only to lease it back again.

And one of the steepest rises was for another big office building owned by Edinburgh City Council.

Scottish Nationalist MSP Stewart Stevenson, who obtained the information in a written parliamentary answer from Finance Minister Tom McCabe, said he suspected the Executive had too many buildings which it was paying too much for.

The most expensive of all the properties leased by the Executive across Scotland is Pentland House in Robb's Loan, Chesser - headquarters for the Executive's Environment and Rural Affairs Department.

The Pentland House rent has more than doubled from £820,590 to £1,698,457.

The building was at one time part of the government estate, but was sold more than a decade ago to insurance giants Prudential, which leased it back to the Executive until 2017.

Liberal Democrat MSP Donald Gorrie said the policy of selling off property, pursued by the last Tory government, had been short-sighted.

"They all take a short-term view," he said.

"Some minister would get some kudos at the time because he had reduced the number of buildings the Government had, but now we end up with a hefty bill.

"A lot of companies sell on premises and lease them back on the grounds they should be concentrating on their main activity and owning buildings is someone else's business, but unless you have a well-drafted agreement - which our government never would have - you are very much at their mercy."

And Mr Stevenson added: "It seems like a long-term commitment to a very expensive deal and in an environment where the Executive is saying it is trying to cut down on waste and increase efficiency, a deal like this suggests it is not achieving much on property."

Council-owned Saughton House in Edinburgh's Broomhouse Drive is the base for the Executive's personnel division and other internal functions and has seen its rent nearly quadruple from £114,527 in 1999-2000 to £444,731 last year.

Mr Stevenson said: "I congratulate Edinburgh City Council on its perspicacity on behalf of Edinburgh taxpayers, but whether it is such a good deal for the Executive is much more open to question. I'm not convinced it is an efficient use of public money."

Mr Gorrie said the council was there to benefit Edinburgh taxpayers and he was glad to know it drove a hard bargain.

An Executive spokesman said all the properties were subject to a regular rent review and the costs reflected the state of the property market.

The spokesman added: "It's all tied into market value - and we are happy to pay what we should be paying."

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