Sale of the 19th Century

On Wednesday, the council's policy committee could approve the sale of Royal York Buildings in Old Steine, once a famous hotel.

We revealed the extent of the council's financial crisis in July last year.

Officers said council tax bills would have to soar by 14 per cent, £100 on the average band C bill of £684, if services were to be maintained at present levels.

A change in the way the Government allocates its grants to local authorities, favouring the traditionally cash-strapped north to the south, and shifts in the city's population, added to the burden.

Officers see the sell-off as a possible solution in the short term, allowing the authority to balance its books while other money-saving measures are introduced.

The council is also being urged to consider vacating two leased buildings in Brighton centre, Priory House next to the town hall and Ovest House in West Street.

It has been looking at rearranging its offices to help save money.

Officers say Royal York Buildings, which houses social services, is currently under-used.

A report to the committee says selling the building would release millions of pounds in capital as it has potential to be used as housing, offices or even a hotel again.

In recent months the council has looked at a series of other cost-cutting options including selling its flagship headquarters, King's House in Hove.

In the past, the council sold Marlborough House, in Old Steine, to raise cash.

The recommendation has been greeted with concern by the Conservative group and surveyors in the city, who see the move as "selling off the family silver".

Leader of the Conservative group Councillor Brian Oxley said: "It is a dangerous policy to sell off council assets to fund day-to-day spending.

"In order to solve the current financial crisis we need to focus on the services the council has to provide by law and cut the wastage identified in our past budget statements."

Coun Oxley added renting the building would be a better option, bringing in a stream of future revenue.

Phil Graves, director of surveyors Graves Jenkins, said the Royal York was probably worth between £3 million and £4 million.

He said: "I cannot understand the logic of disposing of what is considered to be a prime location building when there are plenty of other buildings which could be sold instead.

"It seems the council wants to sell the family silver simply to plug a hole in this year's budget. The remit of any landlord is to look at its portfolio and see how it can add value to properties.

"If the council wants to increase the long-term value of its property, it should consider that a substantial income could be generated from renting out the building."

Mr Graves said pulling out of Priory House and Ovest House, built in the Eighties and leased by the council, could cost more in the short term.

He added: "These properties may become a liability rather than an asset. It may be that the council will have to keep paying the rent until it finds someone to take over the leasehold."

Another leading surveyor in the city, who asked not to be named, said the Royal York would have limited value due to its age.

He said: "It is very expensive to maintain and because of the way it is laid out, it is only suitable for small office units."

But the move has been welcomed by the Liberal Democrats, who said the council needed to cut the number of properties it owns.

Group leader Paul Elgood said: "A prime seafront location such as this should be in the commercial sector."

Ovest House has been closed for months due to flood damage. The building had been used by the council as a recruitment shop and staff training centre.

Priory House in Bartholomew Square is where the public pay their council tax bills. It also houses the council's customer services and housing benefit department.

In April 1999, the council spent almost £45,000 on new schemes to make Priory House and the town hall more accessible to people with disabilities.

Council leader Ken Bodfish said: "The simple fact is that this building is of no significant use to the council. We do not need all of our buildings and we need to rationalise to cut costs."

Mr Bodfish said the council was not closed to the option of renting out Royal York Buildings.

He said: "This building is in a poor state of repair and as freeholder we would have to pay the refurbishment and maintenance costs. I don't believe it would generate as much money as selling it."