RAAC at one of the UK’s most famous film studios will eat into a borough council’s budget, with production firms having to move out.
Rental income from Elstree Film Studios Limited (EFS) will top up Hertsmere Borough Council’s budget to the tune of £1.2million in 2024/25, according to draft budget papers.
EFS was due to pay £1.7m into council coffers as part of the 2023/24 budget which covers the current financial year – until April.
The year-on-year drop in rental income is roughly 29 per cent. The council-owned company manages the Elstree Studios site in Borehamwood, which is also council owned, as part of a 30-year lease agreement.
Workers dealing with asbestos at stages 7, 8 and 9 discovered the roofs “had not only lost their useful life but were in a dangerous state”, as revealed in a 2023 council report.
The ‘bubbly’ reinforced autoclaved aerated concrete has also been discovered in publicly owned buildings throughout London and the East of England – including Harrow Crown Court and Hinchingbrooke Hospital in Cambridgeshire. The stages will be demolished throughout the spring and summer of 2024.
Production firms including BBC Studioworks have had to move out, which has resulted in a “temporary reduction in rent”, according to a borough council report.
“The income from Elstree Film Studios has reduced to the contractual minimum,” said Cllr Chris Shenton (LD, Bushey St James), who is responsible for the budget process in Hertsmere, at a meeting on Wednesday, January 10.
Borough leader Cllr Jeremy Newmark (Lab, Borehamwood Cowley Hill) said: “The long-term solution to the scenario in which what was a primary source of revenue for our budget risks swinging in the opposite direction is to achieve significant external investment in the site.
“It’s a matter of record that the first stage in that process is to appoint an industry expert consultant to help drive a procurement-style process.
“I hope to have more news on that before the end of this month.
“Even as it stands, with a slightly reduced revenue line coming in from the studios, they do remain a net positive on our budget.
“I think that’s something that’s incredibly value that we know we can’t take for granted.”
Stages 7, 8 and 9 were home to the original Star Wars films, the original run of Who wants to be a Millionaire? throughout the 2000s and the BBC’s Pointless with Alexander Armstrong and Richard Osman.
A report by finance chiefs indicates higher bank rates set by the Bank of England “have had a positive impact on the council’s investment income with significantly higher investment returns now available and greater opportunities for longer-term investments”.
The bank rate has risen from 0.1 per cent in 2020 to 5.25 per cent at the end of 2023.
Hertsmere Borough Council has an investment balance of £40.6m – made up of “core investments” and loans – and it could reap a £1.6m return in 2024/25. The authority has plans to spend £32.4m on day-to-day services in the next financial year, which will be funded through fees and charges, council tax, investment income and grants.
It has a separate budget to “buy” infrastructure and services for the long term. This “capital” budget features a £700,000 bid to improve drainage and access for the mobility impaired at Elstree Studios, which remains home to live TV shows including Strictly Come Dancing in buildings not affected by Raac, which could be part-funded through borrowing.
Another major spend in the capital budget includes a £1.02m item for toilet replacement at the Civic Offices to “avoid blockages and flooding” and roof replacement to “prevent water penetration into newly refurbished offices and upgrade of insulation”.
A further £591,000 could go towards a new café at the King George Recreation Ground in Bushey, funded using housebuilders’ contributions, along with new power supply “to enhance the range of events that can be offered at the park”, plus £480,000 for floor and plumbing refurbishment at Edwintree Court homes in Borehamwood “to ensure they meet [the] Decent Homes Standard”.