Transformation of Derbyshire County Council's HQ could cost £130m

The new headquarters (on the left) will be close to the existing building

A project to build a new headquarters for a council and convert its old one into a hotel could cost about £130m.

Plans to turn Derbyshire County Council's historic base in Matlock were approved on 11 January.

A new budget report states the new office could cost £34m, the hotel conversion £72m and the creation of homes in a block on the site £26m.

While these costs will be shared with any developer, the authority expects to spend about £20m on the project.

Derbyshire County Council's base in Matlock is Grade II listed but costs more than £2m a year to maintain.

It will be more environmentally friendly, with space for other organisations

The move away from its 19th Century headquarters comes as the cost of maintenance, repairs backlog and decarbonising County Hall are predicted to total £172m.

While the terms of any deal with a developer have yet to be decided, the report states the council has set aside £375,000 to be spent over the next financial year for preparation work on a business case for the combined project, ahead of a planning application to Derbyshire Dales District Council.

The council expects to spend £15m in the 2025 financial year, followed by a further £5m in 2026, the Local Democracy Reporting Service said.

Officials said half of this £20.5m would be funded through grants and half would be borrowed, and a small chunk from capital receipts from land sales.

It plans to build a low carbon office building, with space for other organisations, close to its current headquarters.

The authority is currently facing a £33m budget shortfall for next year.

The authority will leave its 156-year-old headquarters in Matlock

Initial tests of the market for developers had generated "serious interest" the report said.

It added: "More expressions of interest are expected as our advisors continue to target potential investors, developers and operators. 

"The council's commitment to the project, evidenced by the commissioning of a business case, has provided confidence to the market that the council is committed to this strategic project. 

"Further technical, legal and financial support is required to prepare and take the opportunity to the market. 

The planned hotel conversion is expected to create 130 full-time jobs, bring £147m to the county economy, to £56m to Matlock and £1.2m a year in extra council tax.

The new council building could be open by 2027 but advisors recommend the opening of the new office and the hotel conversion are synced up.

The hotel could potentially open by 2029.

The project will be discussed at a meeting on 1 February.