Sadiq Khan proposes City Hall move to cut costs

Sadiq Khan could move London's government out of City Hall in an effort to fill a £500m black hole in the capital's finances.

The Mayor of London said moving to The Crystal in Newham would save £11.1m a year in rent and charges.

The Norman Foster-designed City Hall, by Tower Bridge, has been the official home of the Greater London Authority (GLA) since it opened in 2002.

A formal consultation on the move will run for six-weeks.

Under the plans the Mayor's Office and London Assembly would move to the GLA-owned The Crystal in the Royal Docks, which was commissioned to be one of the most environmentally sustainable offices in the world.

The lease for City Hall was agreed with a private landlord, the Kuwaiti-owned St Martins Property Group, in 2001 and is due to run for 25 years.

But the agreement allows for a break in the contract after 20 years - in December 2021 - which will be the only chance the GLA has to leave early.

The mayor believes the rent, which is set to rise to £12.6m a year in December 2021, is above market value.

Tim Donovan, Political Editor, BBC London

The Lord Foster building has its fans - not least those enthralled by the spiralling staircase at its core.

But when it first opened it was likened to a fencer's helmet and a giant testicle.

There was always some unease it was on a private site owned by anonymous international investors.

For a while there's been speculation about what the rent would be raised to when the lease came up, especially now the area has been transformed by restaurants and bars, the HQs of leading accountancy firms and a new theatre, drawn partly at least by the political anchor tenant.

Over the years, the ninth floor panorama has formed the backdrop to countless mayoral announcements, melodramas and embarrassments.

Mr Khan said: "My first priority will always be to protect funding for frontline services, including public transport, the Met Police and the London Fire Brigade.

"In normal times, it would be standard practice for any mayor to consider utilising the lease break-clause on the City Hall building that becomes possible this year.

"In the current financial context, and with the looming black hole in London's public finances, it would be negligent not to do so."

The Met Police, London Fire Brigade, Transport for London (TfL) and the GLA are expecting a combined budget deficit of £493m over the next two years.

The hole is due to a forecast reduction in tax receipts from firms paying business rates and householders not able to keep up with council tax bills.

The mayor will cut his own pay by 10% and freeze pay for his senior staff.