Concerns about college relocation as landmark buildings fail to sell
FAILURE to sell two landmark buildings has raised serious concerns about a further education college's re-location to a new multi-million pound campus. Auditors questioned the value for money of Belfast Metropolitan College's (BMC) move from the city centre to a £211 million home at Titanic Quarter. A report published today identifies worries about procurement and project management. It also highlights a potentially significant shortfall in receipts from the sale of surplus properties associated with the massive project.
Specifically, comptroller and auditor general Kieran Donnelly focused on the failure to sell two campuses, including the prominent Edwardian `Black Man' building.
The Titanic Quarter campus opened in 2011 and was delivered through a Public Private Partnership (PPP), a mortgage-style arrangement where a private company constructs and maintains a public building in return for annual payments. Auditors found failings in
how the college negotiated its PPP agreement with ivywood Colleges limited (iCl) to pay it £5.6m a year for 25 years. It was hoped that £20m would be realised from the sale of 'the Met's' College Square east and Brunswick Street properties. Valuations for the buildings in 2008 totalled £22.5m.
The report found that the college decided that selling the buildings itself and paying £15m to ICl represented better value for money.
it also intended to use the money obtained from selling the buildings to cover a £5m upfront outlay for subleasing land at Titanic Quarter.
However, the value of these properties fell significantly during the property crash and they remain unsold.
The old college of business studies site at Brunswick Street was vacated in august 2011.
The listed 'tech' campus at College Square east, which first opened in September 1906, was used by IT support staff until last year.
"The college injected £20m into the project which it expected to recoup from the sale of its Brunswick Street and College Square east properties," Mr Donnelly said.
"However, the value of these properties has fallen significantly and a large shortfall in the expected receipts is now likely.
"The college has also had to meet the cost of maintaining and securing the properties until they are sold. These costs must be factored into any meaningful assessment of the project's overall value for money."
This decision to transfer the risk associated with fluctuating property prices to the public sector was one of numerous issues of concern flagged by the report. It also noted that the original timetable for negotiating the contract was set at 12 months, but instead lasted two and a half years.
Both the college and Department for employment and learning said it would be inappropriate to comment on the report before the issues are discussed by Stormont's Public accounts Committee in June. It is the second time in little more than a year that the Northern Ireland audit Office has focused on BMC, which has been under scrutiny since recording a massive deficit in its first year. Last year, Mr Donnelly said the Met had faced numerous challenges since its was created in 2007 through the merger of Belfast institute and Castlereagh College.
His report in January 2013 found it had debts of £17 million, although the college said it expected to reduce its underlying deficits to "an acceptable level".
* BUILDINGS: Left, the new Belfast Metropolitan College in Belfast's Titanic Quarter. Top, the 'Black Man' building in the city centre. Above, the Brunswick Street building
PICTURES: Hugh Russell (main) and Ann McManus (above)