Cardiff Council has brought forward a detailed update on the development of a new core office building, setting out why delivering a replacement for the ageing and unaffordable County Hall has become increasingly urgent.
The report highlights escalating risks associated with the deteriorating condition of the council’s existing core office estate, alongside confirmation of finalised design and cost information following completion of the Pre‑Contract Service Agreement (PCSA) stage.
The council’s core office estate has been assessed as a high‑risk liability for several years. This is due to mounting structural deterioration, spiralling maintenance backlogs, and the increasing likelihood of building failure leading to unplanned and unaffordable costs, and subsequent service delivery failure. In 2023, the current County Hall was found to require around £140 million of works simply to remain operational because of its size and age.
The development of the new core office building also forms part of the wider regeneration of Atlantic Wharf. By delivering modern infrastructure, shared public realm improvements and a coordinated programme of remediation and redevelopment across the site, the scheme will stimulate new business activity, support creative industries through the Capella Production Studio partnership, and attract more visitors to the area, the council said.
Together with the Indoor Arena, the project will generate employment opportunities and help unlock future phases of development that benefit local residents and businesses across the city, it added.
Following the pandemic and the shift to hybrid working, the council reviewed all possible options, confirming that refurbishing the existing building is no longer financially viable. Continuing with reactive maintenance risked triggering major building regulation requirements, effectively forcing the council to invest in the entire maintenance backlog. A new building offers the cheapest long‑term solution, the lowest carbon impact, and a modern workspace designed to support a modern approach to service delivery.
The Leader of Cardiff Council, Cllr Huw Thomas, said:
“It remains incumbent on us as an administration to ensure that Cardiff Council operates as efficiently and as cost‑effectively as possible, making prudent use of public funds at a time when pressures on our services continue to mount. As this latest report shows, the condition of our existing core office estate has now reached a point where the risks and costs of maintaining County Hall are simply unsustainable.
“With the PCSA work now complete, we have a clear, fixed‑price route to deliver a smaller and more energy‑efficient building that better supports our modern model of service delivery, reduces long‑term costs and places far less strain on the council’s budget compared with remaining in the current County Hall. Delaying this any further would expose the council to escalating maintenance liabilities and potential building failure, and subsequent service delivery failure. Bringing this report to Cabinet now is the prudent thing to do, ensuring we lock in costs and secure the best possible value for the public purse.”
Cabinet approval is required urgently because the fixed price secured through procurement is time‑limited and expires at the end of March 2026. The council has negotiated a short extension to this deadline, contingent on progressing planning work immediately. Delaying the project further risks losing the fixed‑price contract, increasing overall costs, and jeopardising critical shared infrastructure opportunities with the new Indoor Arena.
The latest report asks Cabinet to approve entry into the Development Agreement, following completion of the PCSA stage. During this period, detailed design work has been undertaken, all project costs have been finalised, and several key previously estimated risks have now been confirmed.
The updated Full Business Case confirms that the new 120,000sq ft core office building can be delivered, but costs have risen since the 2024 position. The peak revenue requirement has increased to approximately £10 million per year, £2.8 million above the previous estimate, primarily due to:
- A decision to remove the current City Hall running cost budget until its future use is fully decided
- Retention of contingency allowances for running costs
- Greater clarity on project costs, including groundworks, remediation, and utilities
- Funding strategy and cost assumption relating to interest rates.
Despite these increases, the construction cost of the office building itself has only risen by £3.8 million from the originally procured price due to detailed design and specification changes relating to statutory requirements such as fire safety. Most of the cost increases relate to the wider project costs that would also apply to any refurbishment of the current County Hall. Refurbishment estimates for the current building have now grown to £180 million and would require the full relocation of staff for an extended period, adding to the estimated cost and reinforcing the analysis that a new build remains the most cost‑effective option.
Cabinet Member for Investment and Development, Cllr Russell Goodway, said:
“Finding a long‑term, sustainable and affordable solution to the council’s core office needs has been an absolute priority for this administration. County Hall has reached the end of its operational life, and the longer we remain in the building, the greater the £140‑million‑plus maintenance backlog becomes, with the added risk that failure of critical systems could force an emergency relocation at huge, unplanned cost.
“This updated report confirms that a new office building, procured at a fixed price, continues to offer the best value for money and the lowest risk. The PCSA stage has given us full clarity on costs and design, and every month of delay increases our exposure. Importantly, progressing now also unlocks wider regeneration benefits for Cardiff Bay and helps ensure the Indoor Arena and surrounding public realm can be delivered efficiently and coherently. This is about safeguarding the council’s finances while creating the conditions for economic growth.”
Maintaining programme alignment with the Indoor Arena is essential, the council said. Delays would remove opportunities to share costs such as service diversions, ground works, and public realm improvements. A new temporary link road must also be delivered to maintain Arena access, with a cost‑capped solution of £1.9 million now identified.
If Cabinet approves the recommendations, the council will enter the Development Agreement for a turn‑key 120,000sq ft office building and a planning application will be submitted. Detailed fit‑out planning will follow, ahead of a future Cabinet report, and the Agreement for Lease with Wales Millennium Centre for the Capella Production Studio will also be finalised.
Cardiff Council’s Cabinet will meet on 19th March to consider the recommendations contained in the report.
