Sheffield criticised for spending as Chinese property scheme is dropped

A Chinese company has pulled out of a major property scheme in the UK city of Sheffield, and its cash-strapped city council has been criticised for spending more than £30,000 on the deal.

Hailed in July last year as one of the biggest investment deals outside London, China’s Sichuan Guodong Group was to have invested up to £1bn ($1.3bn) over the next 60 years in the South Yorkshire city.

The first project emerged in November that year when the council said the Chinese company was interested in spending £220m on a scheme to turn the city’s Central Library (pictured) into a five-star hotel.

But earlier this month the council revealed that after a year of probing the feasibility of the scheme, Sichuan Guodong Group would not proceed, having "become aware of the significant financial issues of the Surrey Street building", although the council said it was still exploring plans for "significant investment" in residential developments with the group.

Now the council, which has had to slash jobs due to government funding cuts, has come under fire for spending thousands on a deal that came to nothing.

Figures obtained by the Yorkshire Post under a Freedom of Information request show that in the 18 months between January 2016 and July 2017 council officials, including the council leader, made multiple trips to China as they pursued the deal with Sichuan Guodong.

Over £14,800 was spent on hotels and more than £16,000 on air fares, the newspaper reported, adding that not all the spending related to activities solely connected with the Guodong Group deal.

The expenditure was criticised by councillor and former council leader Paul Scriven, a Liberal Democrat peer, who said the future of the landmark deal appeared to be in doubt.

"I don’t think anybody would object to some spending happening to try and ensure that investment, jobs and business come to Sheffield," he told the Post. "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."

In its defence, a Sheffield City Council spokesman told the newspaper: "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."

The spokesman added that 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.

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

This week the council hailed an education initiative in which an "English-style school" would open next year in the Chinese city of Chengdu. Linked to a Sheffield school, the initiative would give "students and their families opportunities to share experiences and learn about each other’s cultures", the council said.

It added that the two cities were also developing a "trade and business incubator and landing pad" facility in Chengdu to foster trade ties.

Image: Sheffield Central Library and Graves Art Gallery: A Chinese plan to turn it into a five-star hotel has been dropped (Wikimedia Commons)

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  1. Disgraceful extravagance on nothing. Serves then right they should encourage local companies

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