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President’s question time

ICE president Paul Jowitt addresses some important questions being asked by ICE members.

A number of questions have been asked over the past few weeks relating to the ICE’s buildings and also our financial contribution to the Associated Societies. I want to respond to these personally, and to address member concerns.

As ICE president, it is clear to me that Council and I need to give members the facts, be responsive to members’ views and let our members know about all the work that is carried out on their behalf. I commit to doing that − and to keeping the lines of communication open.


Why are member subscriptions paying for an expensive headquarters in London?

They aren’t. It is important that members understand that not a penny of member subs goes to the costs of running the One Great George Street (OGGS) building. The building is fully owned by the ICE, and generates a large income through the successful hospitality business. Without that income, subscription rates would likely increase, or services reduce.

Why does ICE need another expensive office, which will cost millions to refurbish?

ICE bought the 8 Storey’s Gate (8SG) building for cash, having sold the Heron Quay office at Canary Wharf in 2009. We sold Heron Quay − which itself needed refurbishing − at an optimum point in the market.

In the short term, Thomas Telford (TTL) will cover the loan required for the refurbishment of 8SG in lieu of rent. Thereafter, TTL will pay the ICE for the rental of its use of 8SG, just as it did previously for the use of Heron Quay. No subscription income will be required to pay for this refurbishment.

ICE and TTL employees are currently based in three different locations (Docklands and in the IMechE − to whom we pay rent − and at OGGS) none of which encourages efficient working practice. Our vision is to move the majority of ICE staff to the new offices − improving working conditions, encouraging crossfunctional working − and therefore improving operational efficiency.

We also intend to use the space currently occupied at OGGS to expand services for members.

Why have the refurbishment costs escalated so much?

When Council took the decision to buy 8SG, the stated base cost of £1.9M was for basic refurbishment construction work only, excluding professional fees and VAT. In retrospect, it would have been sensible to have stated this more explicitly.

Of the options presented in December 2009, this base option was still £1.9M − excluding the factors just mentioned. Council believed that the additional benefits of opening up the basement for use and delivering high level environmental performance, including energy saving measures, were worth investigating in order to achieve the optimal gains in operational efficiency as well as the most effective investment plan. This brought the construction cost to £3.15M. When professional fees, VAT, IT and furniture costs are added, the total for the top level option totals £5.19M


● Why was it necessary to seek to save £55,000 through lower subsidies to Associated Societies while spending millions on an office refurbishment?

As income levels have fallen through smaller profits from TTL businesses and reduced investment returns, the whole of the ICE budget was reviewed carefully and cuts made to ensure a balanced budget for 2010.

Operational expenditure has been cut back to match subscription income and TTL profits remitted to the ICE rather than drawing from reserves, as in 2009.

Reserves are there for short term imbalances, but we can’t draw on them long-term. So a revised budget was set which saved £2M against 2008 costs, across a number of institutional activities

I fully appreciate the impact on the Associated Societies. This was a difficult decision as the ICE highly values their contribution.

I will continue to work with them to reach a mutually acceptable solution.

In retrospect, I think we might have misjudged the impact on some of the societies, which we have tried to redress.

Equally, they have to share some of the cost burden.
However, I would like to make it very clear, that none of these cost savings are being diverted to cover building or property development costs.

Readers' comments (1)

  • Thanks for the clarification Paul - it's good to have a clear understanding that dispels some of the misinformation.

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