Whatever happened to Sheffield’s £1 billion China deal?

Senior Sheffield councillors have been accused of “acting like Del Boys” and being “plonkers” in their handling of a £1 billion deal with China.

Thursday, 28th March 2019, 11:29 am
Updated Thursday, 28th March 2019, 11:33 am
Sheffield Council leader Julie Dore signs a 60-year partnership deal with Wang Chunming, chairman and president of Chinese firm Sichuan Guodong Construction Group, in Sheffield's sister city Chengdu.
Sheffield Council leader Julie Dore signs a 60-year partnership deal with Wang Chunming, chairman and president of Chinese firm Sichuan Guodong Construction Group, in Sheffield's sister city Chengdu.

Lord Paul Scriven, the authority’s former leader, says the council has wasted hundreds of thousands of pounds “chasing false promises” with Chinese investors.

In 2016 the council signed a 60-year partnership with Sichuan Guodong Construction which was worth £1 billion – but the Liberal Democrats say nothing has ever materalised.

Lord Paul Scriven

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Senior councillors declined to be interviewed but the council issued a rundown of “benefits and achievements” delivered through the city’s relationships in China.

But Lord Scriven, who is also a serving councillor, said the council had “conflated existing and unrelated relationships” when compiling its list.

“It is clear council leader Julie Dore and the cabinet member for business and investment Coun Mazher Iqbal have become the Del Boys of economic development,” he said, referring to Derek Trotter, the wheeler-dealer lead character of long-running sitcom Only Fools And Horses played by David Jason.

“They talk a good game but when you dig further you realise they are amateurs full of flannel with no substance behind them. They talk about partnerships, dialogue, collaboration agreements and conferences.

New Era Development Sheffield. Picture Scott Merrylees

“Nowhere do they point to one pound or one job being created in the city from the Sichuan Guodong agreement despite spending nearly £200,000 of taxpayers’ money on flights, hotels, translations and consultants on this deal alone.

“We were promised major projects and thousands of jobs by now, not expensive ongoing dialogue. The only people to have benefited from this are airlines and hotel chains.”

Lord Scriven said investments such as the New Era development should not be included.

“The New Era was on the back of existing and long-standing business-to-business relationships that had nothing to do with the council.

“It is time for the Del Boys to realise what plonkers they have become when dealing with the Sichuan Guodong deal.

“It’s time to accept they have wasted hundreds of thousands of pounds in chasing false promises and development. It shows just how they can’t see how this is good money after bad by defending such failure.  

“It’s time to accept the deal isn’t delivering and taxpayers’ money could be better spent than on more flights, hotels and consultants.”

 

Sheffield Council statement:

“The following benefits and achievements have been delivered through the city working with and developing relationships in China:

Continued dialogue with Sichuan Guodong about potential development projects

Sheffield-based water saving technology specialist Xeros agreeing a joint development agreement with Chinese–owned Midea Group (which sold more than 15 million washing machines in 2017)

Acceleration of the final phase of the New Era Development which is home to the China–UK Business Incubator and a gateway for Chinese businesses to enter into the UK market

Healthcare partnerships between the city region’s hospitals, and hospitals in the city of Ningxia

Trade and collaboration agreements signed with the cities of Nanchang and Daqing which has delivered investment and educational partnerships in the city

Increased numbers of Chinese students living, studying and setting up businesses in Sheffield

Sheffield being the host venue of the International Horasis Conference which brought over 500 key business influencers and decision-makers from some of the world’s leading companies to Sheffield to meet and network with Chinese business and governmental leaders

Sheffield being the first UK city to host the UK–China Regional Leader’s Conference which saw over 20 Chinese provincial and city mayors and vice mayors visiting the city to network with Sheffield-based businesses.  

Acquisition by a Chinese company of a major retail property in Sheffield’s Castle Market

Launch of a Sheffield-Chinese Business and Trade programme which will support 88 Sheffield-based companies with matchmaking and networking to promote further trade and export collaborations

A series of Department of Trade supported UK–Chinese business seminars which were attended by over 400 business representatives across the city region

Signing of a collaboration agreement between Sheffield’s Olympic Legacy Park and Chengdu’s Hi Tec Zone (which is home to over 300 Fortune 500 Companies)

Education partnerships between Sheffield and Chengdu which will see the cities establish “sister” schools in order to provide a platform for educationalists and students to share and participate in learning and cultural exchange

Sheffield-based firm WANdisco establishing offices in Sheffield’s “sister” city, Chengdu

The award of a significant contract to Sheffield-based architects Bond Bryan from Chengdu’s municipal government. They are commissioned to design the “Sheffield” school in Chengdu, the first English-style state school in China

Sheffield Confucius Institute, which is seen as one of the UK’s leading centres of Chinese–UK collaboration achieving global Institute of the Year, twice, and  being named the “Model Confucius Institute”

 

What was the China deal?

To great fanfare, in 2016 the council signed a 60-year partnership with Sichuan Guodong Construction which was worth £1 billion and handed owner Wang Chunming exclusivity over redeveloping the Central Library.

The Sichuan Guodong Group was given 12 months to explore plans to redevelop the Grade II-listed building on Surrey Street into the city’s first five star hotel.

By April 2017, the council still hadn’t signed a library deal but said it expected an agreement would be finalised “imminently”.

By December of that year, the plans had fizzled out after the Sichuan Guodong Group’s enthusiasm was dampened at the unviability and the significant costs associated with the site.

At the same time, a Freedom of Information request revealed the council had spent more than £30,000 on overseas trips to China connected to the deal.

In the 18 months between January 2016 and July 2017 council officials, including leader Julie Dore on one occasion, made multiple trips to China as they pursued a deal with Sichuan Guodong Group, as well as other investment opportunities.

A recent Freedom of Information request revealed spending of:

£2,372 on bags, belts and accessories

£49,623 on travel, flights and hotels including chauffeured cars

£99,557 on business and marketing consultants