The City of London Corporation is spending £633.8 million on the Salisbury Square development, yet the Government will pay only a peppercorn rent for the courts, raising questions about the financial wisdom of the deal. The revelation came in response to a Freedom of Information (FoI) request submitted by the Local Democracy Reporting Service (LDRS), which also showed no modelling has been done on how long it would take to recoup the investment.
A Landmark Project with a Hefty Price Tag
Salisbury Square, located in the heart of London's historic Fleet Street district, is one of the City of London Corporation's most significant projects. The scheme includes a new court complex with 18 courts, a commercial building, and a new headquarters for the City of London Police, designed to tackle cyber and economic crime. The courts, run by the Government, will consolidate the Square Mile's existing civic and magistrates' sites into a single facility.
The complex, designed by Eric Parry Architects, is set to begin opening in 2027. Corporation members approved the development and budget in 2018, with a planning application presented to the authority's Planning and Transportation Committee in 2021. The proposal was approved despite concerns over the loss of several historic buildings.
Concerns Over the Government's Peppercorn Rent
Deputy John Edwards raised the issue at a recent Court of Common Council meeting, the Corporation's equivalent of Full Council. He noted that the Government's plans to slash the Corporation's grant funding under the Fair Funding Review make the expenditure on Salisbury Square particularly incongruous. “I just don’t understand how these two things happen at the same time,” he said. Deputy Edwards added that when the application was approved, there was never a discussion about giving it away “for nothing,” and the assumption was it would be leased like other Government buildings.
Deputy Chris Hayward, Policy Chair and the Corporation's de facto political leader, responded that the authority cannot undo the deal having entered into legal agreements with the Government. “I can’t turn the clock back to six years ago when we first made these policy decisions about the court building.” He described the scheme as “a massive gift to the nation” but acknowledged that many in the Corporation believe such gifts “have gone and are going.” “We can't undo the past, but we can certainly ensure that as we move forward in the future these sorts of situations do not reoccur,” he said.
Details of the Agreement and Future Tenants
A source told the LDRS that questions remain about the agreement and who approved it. In 2019, the City signed a Memorandum of Understanding (MoU) with the Government detailing the terms of a 125-year lease, including the peppercorn rent and the Government's responsibility for building maintenance and running costs. The FoI response also revealed that while the Government and City of London Police have secured tenancy, no firms have signed on for the commercial building. The LDRS has been told it is not uncommon for lease agreements to be finalised once the building is complete, with the Corporation seeking a single occupier for the whole premises, though other potential tenants are being considered.
A City of London spokesperson said: “The Salisbury Square Development is a flagship City Corporation investment that will create a world-class civic and justice hub at the heart of the Square Mile. Bringing together 18 specialist courts and a high-quality commercial space, it represents one of the most significant public infrastructure projects in the City. This critical contribution to criminal justice is yet another example of the City Corporation partnering with Government for the benefit of the whole UK.”
Ahead of a topping out ceremony last September, Sarah Sackman KC MP, Minister for Courts and Legal Services, said: “This world-class building is at the forefront of a new generation of state-of-the-art courts. We are taking advantage of new technology to deliver swifter justice for victims. Courts like these, in the heart of our capital, showcase our commitment to justice and why London is a global leader in legal services, driving economic growth.”
