A Cumbrian council looks set to become one of the first in UK history to break free from a crippling PFI-deal costing the taxpayer £1.7m a year.

Copeland Council is due to meet next week (December 16) when councillors will be asked to support a “voluntarily termination" of the contract for the Copeland Centre in Whitehaven with nine years still left on the agreement.

The arrangement has been described by leading members as a “millstone around the council’s neck” and as “the worst PFI-deal in history.”

The contract, agreed with a private company and the Government in 2004, meant that, due to a later legislative change, the authority would not even have owned its headquarters at the end of the 25-year-old deal in 2029.

But following interventions from the then MP Trudy Harrison to set up top-level meetings with Whitehall ministers and extensive behind-the-scenes work by Copeland Council, the Government has now agreed in principal to support the council’s buy-out of the PFI.

Copeland Council had been so tied into the costly arrangement that it was initially thought to be impossible for it to secure a termination agreement.

Copeland pays £1.7 million-a-year for the PFI, and receives a £837,000 annual grant towards this from the Government.

Cancelling the contract would allow council to take ownership of its headquarters in the spring and begin a £1m programme of work to bring the building up to scratch.

Councillor David Moore, Portfolio Holder for Property and Accommodation, who has been working on this for over four years, described this week’s breakthrough as “unique”, “unprecedented” and a “good deal” for the taxpayer.

Under the plans, the Government would use some of the £837,000 annual PFI credits it pays to Copeland Council – set aside for the duration of the original PFI contact – to essentially buy the authority out of the contract with Equitix, who took over as the PFI-provider in 2015.

Coun Moore added that the then MP Mrs Harrison has been instrumental in making sure officers were speaking to the right people in the right departments.

The move comes after the council developed a “compelling” business case showing that it would cost the Government more in the long-term to keep shelling out the £837,000 annual contributions until 2029 than to buy the Copeland Centre outright.

The early termination of the contract itself would not cost the council a penny but would allow it to carry out much-needed renovations.

And it is hoped that these will allow them to attract more tenants and generate more income, with any surplus cash ploughed back into frontline services.

If members agree to the recommendations any future income would go into the council coffers rather than to Equitix, offsetting council costs and generating a vital cash boost.

“It’s great to see the light at the end of the tunnel,” coun Moore said.

Because of the original deal, the rental price per square foot for the Copeland Centre has historically been higher than the going market rate for Whitehaven, causing finance chiefs a major headache when it came to attracting tenants.

And because the council held the ‘head lease’, it fell to them to make up any shortfall.

The council wanted to invest around £1m in changing the layout of the Copeland Centre to make it more attractive to current and prospective tenants, but reached an impasse in terms of the existing PFI deal.

Trudy Harrison, the Conservative’s parliamentary candidate for Copeland, described the original deal – struck with Equitix’s predecessors and the then Government – as “daylight robbery” and offered to take it up with the minister Rishi Sunak.

She said: “Together we agreed a termination agreement, to my knowledge it is the first of its kind.

“This will mean the council will save almost £900,000 each year, they will avoid costly repairs and maintenance charges and Copeland council will actually own their own building allowing flexibility to improve, expand or do whatever they deem fit.

“The Government will also save a further £750,000 as their contribution of a PFI support grant will not be required.  All in all, this is a common sense solution to what was an appalling financial burden local residents were paying a heavy price for.”

Copeland’s elected mayor Mike Starkie said the termination would represent a “major milestone” in rebuilding the council’s financial position.

He added: “The PFI has not only presented a huge financial burden but has also been very restrictive in allowing us to develop and progress a commercially viable accommodation strategy.

“When I was elected, my key task was to deal with the financial sustainability of the council and the PFI-burden and negotiating a way out of it was absolutely key.

“The difficulty was there was no precedent and we have had to come up with a creative and innovative solution that has required cooperation and approval from the Government, the landlord and ourselves.

“We were told at the outset we would have very little chance of achieving but, against the odds, we now have a solution that is in the best interests of all parties involved.”

Pat Graham, Copeland Council’s Chief Executive, stressed that the council enjoyed a “constructive relationship” with Equitix which only took over as PFI-provider in 2015.

Chief finance officer Steven Brown, property and estates manager Barbara Vernon and the authority’s solicitor Clinton Boyce are among those who have been working behind-the-scenes to extricate the council from the deal.