The European Union faces a potential combined bill of £400 million (€465.29 million) for empty London office space it ditched in the wake of Brexit.
This year alone it is liable to take a £27 million (€31.4 million) hit on top of the rent it already pays, according to confidential documents seen by Brussels Signal.
The bloc’s European Medicines Agency (EMA) signed a 25-year lease worth £500 million for the 280,000 square-foot offices in the UK capital’s Canary Wharf district five years before the Brexit vote in 2016.
The EU’s lease on 30 Churchill Place expires in June 2039 and, unless a solution can be found, the bloc’s officials will have to stump up a further £373 million in rent and other charges as the agreement runs its course.
Frank Furedi, the executive director of think-tank MCC Brussels, whose researchers unearthed the document, told Brussels Signal: “Paying millions in rent for an empty building is not only a waste of precious resources but an insult to the European taxpayer.
“It demonstrates that irresponsibility and lack of accountability has become integral to the operation of some of the EU’s agencies.”
Following the UK’s decision to leave the EU, the EMA decided to relocate its headquarters to Amsterdam in 2019, with the loss of 900 UK jobs. That move meant it needed a tenant to pick up the vacant space.
While the medicines watchdog did manage to sublet the 10 floors of 30 Churchill Place to the US office-rental giant WeWork in that year, a document passed to the European Parliament’s budget committee revealed that, following the American firm’s bankruptcy in November last year, it would no longer be paying rent.
The office space is currently empty and the EU needs to find £27 million to cover the lease if it remains so for the rest of this year.
The EMA has already requested more funds to meet the shortfall and MEPs will soon be asked to decide whether to stump up the £4.55 million needed to pay for the first quarter of 2024.
The document circulated to the committee noted: “The Agency’s current budget for 2024 does not have funding for additional costs outside its annual programme.
“As negotiations with WeWork UK continue, it appears increasingly likely that the Union budget will need to contribute towards the rent of the 30 Churchill Place premises, which has until now been fully covered by WeWork UK.”
The EMA evaluates medicines throughout the EU and moved to the Dutch capital because pharmaceuticals regulation ought to take place in a Member State. Amsterdam won the bid to host the agency in 2017.
EMA officials at the time expressed dismay at the choice of location for their new headquarters – adjacent to the city’s new purpose-built red-light district – issuing a statement saying they feared “nuisance, drug-dealing, drunkenness and disorderly behaviour”.