Derbyshire council agrees over £4m expenditure with latest plans to convert its HQ into a hotel and offices

Derbyshire County Council has agreed to allocate an allowance of over £4m to appoint specialist consultants and to support its latest steps as it moves closer to selling its majestic multi-million pound headquarters and having the building converted into a hotel, homes and offices.

The council-owned County Hall, on Smedley Street, near the top of Bank Road, is being presented as a fantastic location for a hotel, residential living, offices and community facilities with hopes of bringing new investment to Matlock and Derbyshire.

Derbyshire County Council’s Cabinet approved expenditure at a meeting on March 13 against the sum of £4.244m to help cover costs including a planning application, enabling site works and to develop specialist support for the procurement process as it seeks a master developer.

The £4.244m has been allowed for in the 2025-26 Capital Programme, according to the council, to support the appointment of specialist consultants and advisors to develop designs, mitigate risk, support the procurement of a master developer while protecting the council’s interests, and to support site enabling work to remove cost and risk and to increase the value of the site.

A council spokesperson stated: “The council’s continued occupation of the County Hall complex is not affordable and fails to unlock and maximise the potential of the asset to deliver significant economic and social benefits for the people of Matlock and Derbyshire, in support of the council’s strategic objectives and those of our existing and future partners.”

The council which is managing on-going, forecast multi-million pound budget deficits has stated it is transforming the way it works and delivers services, and it is enabling its workforce to operate in flexible ways reducing journey times and its carbon footprint with more efficiency.

Since the Covid-19 pandemic and with new working patterns and home working arrangements, Deputy Leader and Cabinet Member for Corporate Services and Budget, Cllr Simon Spencer, (pictured right) revealed the building’s occupancy has reduced to about 30 per cent which the council recognises is unacceptable given the costs of running and maintaining the entire building.

The council’s latest report revealed the annual budget for the running costs of County Hall is £1.347m and expenditure sits at £2.2m and is increasing without including maintenance work with a backlog of maintenance liabilities estimated to be £56m along with the cost of decarbonisation estimated at £59m.

Subsequently, the local authority approved that the County Hall site and buildings should be repurposed in line with a masterplan, but the council will remain on site as the ‘anchor’ in a smaller, new and fit-for-purpose low carbon, office building, and the main campus is to be redeveloped to deliver a hotel, conferencing, residential and business spaces.

The council has identified a number of benefits from the planned conversion including avoiding nearly £130m of repairs and decarbonisation costs, securing the future for the Grade Two listed heritage building, reducing annual revenue costs of up to £1m and reducing energy costs.

It has also been estimated, according to the council, that the conversion will provide a £56m boost to the Matlock economy and an almost £150m estimated boost across Derbyshire while the hotel will create 130 new permanent jobs.

Derbyshire County Council has also confirmed a ‘clear and sustained interest’ from potential master developers, residential developers, hotel developers and operators and from a leading UK-based hospitality and events business.

The council’s recommended procurement process for the scheme – which has been entitled the the Smedley’s Hydro Development project after the site’s historic spa heritage – is to adopt a tendering process for interested parties before creating a shortlist and entering into dialogue before welcoming bids.

A series of briefings have been held with the Cabinet and opposition members, local businesses, the Civic Society, The John Smedley Trust, the East Midlands Combined County Authority and others before letters were sent to over 1,000 local residents supported by public drop-in sessions.

Cllr Spencer told the meeting it was a ‘significant day’ for the authority to move forward with its plans for County Hall with regards to the project’s potential economic benefits and he stressed the scheme would not cost the tax-payer a huge sum and it would save the tax-payer money in the future.

The Cabinet formally approved to deliver the project via a master developer with the necessary procurement process while noting the costs for the next steps of the project with an approved expenditure against the sum of £4.244m with the authorisation of the procurement of specialist consultants and legal advisors.

Council Leader, Cllr Barry Lewis (pictured right, courtesy of Derbyshire County Council), told the meeting: “It’s a very important development for Derbyshire in the sense that it will support the local and regional economy as well. The building is much emptied and much less used than it used to be.”

Cllr Lewis added: “We have a responsibility to make sure this building is well-looked after and this is the best way of securing that future for it.

“It has the potential to reduce liabilities and has the potential to create on-going revenue regeneration.”

A number of planning applications are expected to be submitted to Derbyshire Dales District Council and specialist legal and financial advice is to be sought to support the procurement process with ongoing engagement with the market and EMCCA to identify how it can support the project.

The massive County Hall is an iconic Grade Two listed building that was originally built between 1853 and 1886 as Smedley’s Hydropathic Establishment after Matlock was developed as a spa town following the discovery of thermal springs at nearby Matlock Bath in 1698.  

It sits on a 5.8 hectare site with fantastic views overlooking Matlock and the Derwent Valley and already boasts many period, hotel-style features, decorative stained-glass windows, as well as a restaurant, bar, lounge and meeting places.