Electric Works: Sheffield ‘coolest place to work’ now losing £305k as businesses leave

Electric Works on the Digital Campus opposite Sheffield station was set up as a workspace for start-up and small and medium-sized businesses in the creative, digital and technology sectors in 2009. Owned by Sheffield City Council, it boasted full occupancy in 2018, with 56 tenants who could ride the three-storey helter skelter inside.

A report to the council’s finance committee (September 12) stated: “There is a shortfall against budgeted income for Electric Works of £305,00 due to low occupancy rate. The property lost key tenants in 2022/23 and more have left in this financial year, leaving occupancy at 57% where the budget is for 85% occupancy to meet income targets..”

The report was outlining the reasons for a forecast total overspend of council budgets of £17.6 million. As previously reported, the main areas of concern are adult health and social care, which faces a £3.2m overspend, children, education and families (£8.9m) and the cost of housing benefits for people in temporary accommodation (£8.4m).

A group of senior officers is currently working on a plan to maximise revenue and improve budgets. Rising inflation and increasing building costs mean that some projects will be staggered or delayed.

Coun Andrew Sangar voiced concern about Electric Works. He said: “Last year officers flagged up that we were failing to meet the 85% occupancy rate and we’re really struggling this year and just wondering what options we have for the building.

“We can’t just carry on failing to rent out parts of this building year after year when we’re missing the income targets.

"I just want to know what’s the strategy and when it’s going to be reported back to members.”

Philip Gregory, council director of finance and commercial services, said there were “onerous conditions” on the types of businesses who could occupy Electric Works that have now been lifted at the request of councillors. He added: “We’re waiting to see the impact of that.”

Head of accounting Jane Wilby said: “I think we’ve just had issues in getting the tenants back in, we’ve then lost other tenants in that building, so that’s reflected in the current forecasts.

“It’s being actively marketed and we’re hoping to get the tenants in but in terms of a working group to look at future options for that building, I’m sure that’s something officers will be looking at.”

Coun Sangar also asked what was happening about supported accommodation for vulnerable people. The forecast overspend on homeless accommodation has been caused by the government setting levels of housing benefits councils must pay, without fully covering the cost of those payments.

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Mr Gregory replied: “As part of the work we are looking at the overall housing issues, particularly around voids (unlet council homes). We are looking at what properties we do own and whether we can repurpose those to be suitable for those needs of those tenants.

“We recognise that bed and breakfast accommodation, for example, is often not the most appropriate – in fact, in the vast majority of cases it’s probably not the most appropriate accommodation for people who are in many cases quite vulnerable and so we want to find the right solution.

“It does mean, though, we need to look at what property we own, what we can repurpose and what we can use effectively. That will also be impacted by the number of voids that we hold.

“No quick fix, unfortunately, for this.”