As someone who lived directly across the street from it as a child (in the 1950's), and so could have seen it every day, I severely doubt that it was ever used for this purpose. That doesn't mean there wasn't an intention for it to be so purposed at some point in history though.
The siren on the old police station was frequently tested and was easy to hear from the Market Place, so why place another so close? And where is the actual motor supposed to go? The electric motor and side vanes on the old police station one were always plainly visible. Here there is a shuttered core which looks to be an integral part of the construction. I would have expected a clear platform to bolt the electric motor to. This is sounding to me like a recently invented "urban myth".