GSD quizzes Govt on ‘unprecedented’ plan to rent new school
The GSD on Wednesday raised questions about the financial costs of the new St Mary’s School development, adding that the renting of schools by the Government is “unprecedented”.
In a statement, the Opposition said the Government is “now resorting to renting buildings as it apparently no longer has the money to build”, with the estimated rent to come at a cost of over £800,000 per year.
It accused the Government of “seeking to spin the matter” by suggesting that the deal it has worked out with private developers is commercially sound and value for money for taxpayers.
Questions on the financial impact of St Mary’s School were put to the Government back in 2019 when the project was first announced.
These were put to the then Minister for Education, Gilbert Licudi, with concerns over the value for money and conflicts of interest.
At the time, Mr Licudi told parliament the Government had reached an agreement with Town Range Developments Ltd for the construction of the new St Mary’s by them on their site, after which the government would rent the building.
He said the beneficial owners of Town Range Developments Ltd were John Joseph Bassadone, Raphael Benaim, Nigel Pardo, James Garbarino, James Levy, Peter Montergiffo, Javier Chincotta, Isaac Levy and the Hargate Group, an investor owned by a private trust for the benefit of the Klein family in the UK.
Once built, the government would take a lease over the new school at a price of £29.50 per square foot with an option to purchase, Parliament was told.
But the GSD said the Government was unable to give a precise figure for the cost of the rent because it was “unaware of the precise area” the school would occupy.
“It has now confirmed that the school will occupy and have an external area of 1,000 square metres beyond that,” the GSD said in a statement.
“2,600 sqm is approximately 27,986 square feet.”
“Using the rental per square foot that Mr Licudi said Government had negotiated this would amount to a rental in excess of £825,000 per year and that does not even include the external area.”
“It also does not take account of any additional sum which the Government may be paying given the information they provided Parliament in 2019 that they would pay an extra £4 per square foot rent if the developers fitted out the school at the Government’s request.”
“Is that extra sum being paid?”
The GSD has asked for further details on the exact cost of the rent paid and how long the Government is committed to rent at this price.
It has also asked the Government to provide answers on the length of the lease.
“The arrangements could therefore easily amount to millions of pounds over the length of the term for the benefit of these private developers,” the GSD said.
Is that value for money for the taxpayer?”
“Additionally, the current Minister for Education - Mr Cortes, in announcing the project on GBC - said that the developers would be making the capital outlay and that there would not be a capital contribution of the Government ‘at this stage’.”
“What did he mean by that? Will there be a payment or capital outlay expected in the future?”
The GSD said the Government needs to come clean and provide full details as to what the terms of the deal are.
Roy Clinton the GSD Shadow Minster for Public Finance stated the following:
“In the 2021 Budget Debate I highlighted how the Government was now resorting to renting building such as for GBC and now St Mary’s school as they have run out of money,” the GSD’s Shadow Minister for Public Finance, Roy Clinton, said.
“This is a pattern which seems set to continue and is not something the Government should be proud of.”
“We had raised previous questions on value for money of this project as far back as 2019.”
“I guess the Government would mortgage all our schools if they could, but instead are now renting the building from private developers who will no doubt make a nice return on their investment at taxpayers’ expense.”