Wirral Council Faces Scrutiny Over £5m Office Building Deal
A new audit report has exposed significant financial management issues at Wirral Council, revealing that the local authority does not know how much it costs to run an office building it purchased for £5 million. The report, prepared by auditor Grant Thornton, criticizes the council for failing to properly assess the risks associated with the scheme, leading to ongoing budgetary challenges.
Controversial Purchase Agreement with Peel
The Hythe office building on Tower Road in the Wirral Waters regeneration area was acquired by Wirral Council in 2025 as part of a complex agreement with property developer Peel L&P. The arrangement originated in 2018 when Peel approached the council to share commercial risk for constructing the building.
Under the terms of the agreement, three years after completion, Peel had the option to require the council to purchase the site if its value fell below £4.985 million. Conversely, if the property value exceeded this amount, the council would benefit from the appreciation. However, the building's value ultimately came in significantly lower than anticipated.
Audit Report Reveals Critical Failures
Grant Thornton's report, covering the period from April 2024 to March 2025, highlights multiple deficiencies in the council's approach to the property acquisition. The auditors found that the council's business case "made only passing reference to 'new property rates generated'" and operated under the flawed assumption that all borrowing costs would be covered.
The report states: "Not only has the Council had to purchase the building at a cost which is £1.6m above its value, the risks around the ongoing impact on the revenue budget, which were never accurately forecast, have now materialised."
Ongoing Financial Uncertainty
Six months after completing the purchase, Wirral Council has been unable to provide a comprehensive assessment of income and expenditure related to The Hythe, including borrowing costs. The council has also failed to quantify the ongoing impact on its revenue budget of operating the building.
Grant Thornton noted that the borrowing cost calculations did not account for rising interest rates or the reality that the council would need to cover expenses from its day-to-day services budget. This oversight has created significant financial pressure on the local authority.
Political Criticism and Response
The purchase previously drew criticism from Conservative councillor Helen Cameron, who sought assurances regarding a separate adjacent project called Egerton Village. That development is currently progressing subject to further viability checks and plan reviews.
In response to the audit findings, interim chief executive Matt Bennett acknowledged the challenges: "This auditor's report highlights the continuing challenges the Council faces and makes a significant number of recommendations that we will be implementing to strengthen the financial controls and governance arrangements in place."
Council's Transformation Plan
Bennett emphasized that the council recognizes the scale of its financial challenges and the need for transformational change in service delivery to ensure long-term sustainability. He stated that senior management and political leaders would collaborate to implement ambitious changes across the organization.
"Work has already commenced to implement the recommendations, including appointment of a new Director of Transformation (Interim)," Bennett added. "This is a vital role which will increase capacity and leadership for our transformation programme, implementing changes across the whole organization as the council moves toward a new operating model."
Looking Ahead
The interim chief executive acknowledged that the coming months would be difficult but expressed confidence in the council's ability to reform: "Together we will make this an organization which delivers the vital services the people of Wirral want and expect efficiently and effectively."
The audit report's findings underscore broader concerns about financial governance and risk management within local authorities, particularly regarding major property acquisitions and regeneration projects.
