Sheffield Council spent £30,000 on trips to China connected to failed luxury hotel plan

Plans to turn Sheffield Central Library into a hotel were central to Sheffield Council's investment partnership with a Chinese construction firm but the idea has now been ruled out as not being commercially viable.
Plans to turn Sheffield Central Library into a hotel were central to Sheffield Council's investment partnership with a Chinese construction firm but the idea has now been ruled out as not being commercially viable.
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Sheffield Council spent more than £30,000 on overseas trips to China connected to an investment deal with a construction firm whose plans to turn the city’s central library into a five-star hotel have collapsed, The Yorkshire Post can reveal.

Figures revealed under Freedom of Information laws show how that in the 18 months between January 2016 and July 2017 council officials, including leader Julie Dore on one occasion, made multiple trips to China as they pursued a deal with Sichuan Guodong Group, as well as other investment opportunities.

Over £14,800 was spent on hotels and more than £16,000 on air fares, analysis of figures provided to The Yorkshire Post by the What Do They Know? website shows.

It is understood not all the spending related to activities solely connected with the Guodong Group deal.

But that spending comes after the council revealed earlier this month “in the region of £60,000” has been spent on administrative work relating to the Guodong Group project; a figure which is understood to include the cost of the overseas trips that related to the deal.

The deal, announced in July 2016, was due to involve 60 years of investment in Sheffield and was heralded as “the biggest Chinese investment deal to be made by a UK city outside London”.

Then-deputy council leader Leigh Brammall said at the announcement of the partnership: “We have gone out and made this happen, not sat back and waited for others to come to us. Chengdu and Sichuan Guodong Construction Group are some of the best partners out there and we look forward to further strengthening our ties with the city to make this exciting project happen.”

Sheffield Council said the first tranche of funding was worth £220m and would fund “four or five Sheffield city centre projects over the next three years”. Later that year, the first project put forward was the idea of turning the city’s existing central library into a five-star hotel.

But Sheffield Council revealed last month that Guodong had “paused” other projects while assessing the hotel idea and a council report has now revealed that hotel is “highly unlikely” to go ahead.

The report says Guodong’s “appetite to invest in Sheffield remains despite the difficulties attached to progressing a viable scheme involving the Central Library building and work will continue with this investor to promote other possible development opportunities in Sheffield”.

But Liberal Democrat peer and former Sheffield Council leader Paul Scriven said today the future of the deal appeared in serious doubt.

“I don’t think anybody would object to some spending happening to try and ensure that investment, jobs and business come to Sheffield. But one has to question the amount of money that has been spent with absolutely nothing in return.

“We have a council that tells us all the time there is no money for anything else. One has to question what on earth has gone on.”

A Sheffield City Council spokesman defended the expenditure on the trips to China.

“The council visits to China were a vital part of securing investment and raising profile for Sheffield. We use relatively small amounts of public money to try and secure investment into our city which, if successful, pays for itself many times over. We do everything we can to make sure any cost to Sheffield taxpayers is as low as possible,” he said.

“Recent meetings have been partly paid for by the UK government, partly through funding that the council allocates for economic development, and partly by the Chengdu City Government.”

The spokesman added: “We continue to be in dialogue with Sichuan Guodong Group and many other interested developers on a number of projects across the city.”