DEPARTMENT OF FINANCE DATA
The Department of Finance indicated in evidence to the Committee that the total cost of the project would be of the order of £22m, £14.7m of which was the estimated cost of the building project. Fitting out and furnishings were estimated at £2.9m and the balance of £4.4m provided for fees inflation and temporary accommodation.
The Department of Finance also submitted on the basis of earlier studies that the building a new office complex was shown to be more cost effective than either leasing or deferring a decision.
This exercise undertaken in 1978 was based on estimated capital cost of the project including fees of £5.35m and assumed 7% inflation on indexed rental starting at 3.50 per square foot and annual maintenance cost of 60,000 which was just over 90% of the then maintenance costs of the Department.
The exercise also assumed a 1% saving on staff time and a staff saving of 10 arising from centralisation and gave these savings a value in 1978 terms of £69,000.
On the basis of this exercise containing these assumptions the recommendation of the Department of Finance was of course in favour of building over renting and in favour of proceeding immediately.