Estates update

Report: 9
Date: 17 September 2009
By: Director of Resources on behalf of the Commissioner

Summary

This report provides members with an update in regard to the estates responsibilities covered by Property Services and the specific issues that have been addressed since the last report.

A. Recommendation

That Members note the Property Services’ update.

B. Supporting information

Introduction

1. At the Finance and Resources Committee on 18 December 2008, it was agreed that Property Services should continue to provide a report on real estate and Property Services’ related issues to alternate Committee meetings. Source documents can be found on previous relevant reports and also in the Members’ Library, the last report was presented in June 2009.

2. In addition to the delivery of the current estate strategy, including maintaining the existing MPA estate; undertaking modernisation programmes and providing facilities to meet operational needs, environmental issues, the Property Services Department includes an specialist operational support team which provides specialist advice to operational colleagues including the provision of crowd control barriers and feeding centres at special events; logistical support at major incidents; physical target hardening of vulnerable buildings; crime scene forensic support; crime scene plan drawing and reconstruction; specialist methods of entry/protestor release; covert property management, and emergency planning in support of major incidents.

3. The bi-monthly reports seek to provide brief updates on specific work-streams and key areas of responsibility. The reports do not seek to provide updates relating to the MPA Estate Strategy; where approvals are required for specific programmes or projects, proposals will be presented separately.

Market overview

Residential

4. Capital values are now approximately 20% below the peak of the market and transaction levels have fallen by two thirds. The fall of capital values appears to have abated, although it is not yet clear whether a recovery is now in progress. Key points on the current state of the market are set out below:

• Halifax & Nationwide have reported recent rises for July, but there is still no clear trend.
• Some industry observers are now predicting further rises in 2009.
• There is still a considerable level of uncertainty in the market leading to a prevalent “wait and see” approach for both vendors and purchasers.
• Only realistically priced properties are selling and many Vendors have withdrawn properties from the market in favour of short-term rental.
• Despite a reduction in interest rates to 0.5%, mortgage approvals are still historically low and lending highly restricted, e.g. many lenders are requiring a Loan To Value ratio of some 60% - or better.
• The exceptionally low interest rates have led to some cash rich investors purchasing rental properties, which will yield better returns than are currently available from deposits with Banks and Building Societies.

Outlook for 2009

5. Nominal residential capital value projections for 2009 range from plus 5% to minus 30%. 10% of the UK residential market comprises rental properties belonging to private investors. Whilst rental yields are increasing, negative capital growth has incentivised some landlords to sell their investment portfolios and this trend is likely to increase in the year.

Commercial Property Market

6. The year to 30 June 2009 has seen a severe decline in commercial property values with the leading index (Investment Property Database) showing a UK wide fall in values of some 25%, the sharpest reduction in values since the late 1980s. A number of commentators are now predicting that the market is beginning to bottom out and investors with finance available are now increasing their activity in the investment market. Due to the general economic situation and financial uncertainty speculative property development has virtually ceased. Occupier demand for all types of property has reduced significantly due to the general financial situation with the London office market and retail especially badly hit.

Outlook for 2009

7. With the present conflicting views on the economy, commercial property is forecast to remain static in value through 2009. As tenant demand reduces headline rents are starting to fall in all sectors and this is having a greater impact on capital values than investor sentiment. Investors with finance available are now re-entering the market, the investors are, in the main, sovereign wealth funds looking for long term secure income streams. Movements in the exchange rate are also having an impact as values shift with relative currency moves.

Estate Strategy

8. The member led panel (supported by officers from the MPA and MPS) set up at the Finance and Resources Committee on 23 October, are in the process of reviewing the current Estates Strategies. Site visits and panel meetings have been held. Property Services are supporting the Panel as necessary and are now drafting a new Estate Framework document for consideration by the Panel. Following this the Estates Strategy will be developed.

Safer Neighbourhoods

9. Stage 2 of the SN Base Property Programme is now well under way with approximately 85 of the current assessment of 118 bases, delivered/identified. Of this 85, 26 are completed and occupied; a further 10 are under construction (as at end of July 2009), with the remainder in solicitor’s hands or under negotiation. The focus remains on the acquisition and formalisation of lease agreements and substantial effort is being applied to ensure this keeps up with the remainder of the programme. Installation of Bike Lockers to Stage 1 properties has now commenced and has been prioritised in line with TP requirements. The regular six monthly update report to Committee in respect of the progress of SN Base Programme is being presented separately to this meeting.

Town Planning Issues

London Plan Review Initial Proposals

10. Property Services have previously made representations on behalf of the MPA that have resulted in the following policies being incorporated within the London Plan (Consolidated with Alterations since 2004):

• Policy 3A.18 refers to policing facilities within its description of social infrastructure, and that development plan policies should seek to ensure that appropriate facilities are provided; and
• Policy 3A.26 highlights the importance of 'ensuring communities benefit from development including through Section 106 agreements' and improving safety and security.

11. As part of the latest review of the London Plan, Property Services have restated that the Mayor should maintain strategic policy support for policing and have made the following comments (summarised below) for due consideration as the review process continues:

• Chapter 3 - London's People
  That the definition of Social Infrastructure (paragraph 123) includes the reference to 'police stations' and that this should be revised to 'police facilities' to reflect the current needs of the MPA and the current Estate Strategy and that an additional criterion for review is included that provides for the requirements of the MPS in the delivery of the current Estate Strategy.
• Chapter 7 - London's Quality of Life
  The MPA have supported the statement that personal safety and security will be a crucial element of the planning framework and seeks the highest standards of accessible and inclusive neighbourhood design principles.
• Chapter 8 - Implementation, Monitoring and Review
  The MPA support the Plan's references to a Collaborative Working Approach requesting the Mayor includes 'policing facilities' on the list of prioritised planning obligations, to ensure that the London Plan will support the delivery of policing across London. To pursue a collaborative approach the MPA have suggested the GLA engage and consult with the regularly with appropriate MPA representatives.

12. The GLA propose full public consultation in the autumn (timescales to be agreed); Property Services will continue to monitor this.

Contract management

PFI contracts

13. The PFI Contractor has commenced Benchmarking and Market Testing on the South East London (SEL) PFI Contract, covering Bromley Police Station (PS), Deptford PS, Lewisham PS and Sutton PS. This was due to be implemented in February 2009, but the Contractor has not provided all of the necessary information and the revised implementation date is now October 2009. Negotiations are still ongoing with the Contractor in regard to pay parity between former MPS personnel and their direct labour as previously agreed. Property Services will report back to Committee in due course.

14. PSD are working together with Central Operations (CO) to drive efficiency savings at the Metropolitan Police Service Training Centre (MPSTC) Gravesend Firearms Facility around the existing booking management and catering process. Improved facilities are nearing completion at MPSTC Gravesend comprising additional changing/locker rooms and accommodation for the disabled including access ramps, bedrooms and shower facilities.

Facilities Management

15. The Facilities Management services to the three CCC buildings transferred to Balfour Beatty WorkPlace Ltd (BBW) and MPIC in June. Over 140 staff, who are already familiar with the specific needs of CCC, transferred to the new service providers. The Facilities Management services provided include Building Engineering Services and Building Fabric Maintenance, Cleaning, Waste Management, Pest Control and Security.

16. Following MPA approval, Property Services are now preparing a similar transfer of the ‘Soft’ Facilities Management services at Empress State Building (ESB) from Land Securities to Balfour Beatty WorkPlace Ltd (BBW) and MPIC in October 2009. Over 85 staff, who are already familiar with the specific needs of ESB, will transfer to the new service providers and this change is not predicted to have any adverse impact on the quality of service delivery. The Services BBW will provide are cleaning, reception, conference room management and security.

17. The anticipated cost savings that have been identified through consolidating previous supply contract arrangements will be monitored carefully.

18. Additional Contract Management information is included under Exempt Appendix 3.

Capital Programme related issues

Acquisitions and Disposals

19. Schedules of Commercial and Residential disposals completed up to 31 August 2009 are attached in Exempt Appendix 1 and 2.

Acquisitions/Disposals under consideration

20. Within the framework of those elements of the estates strategy that have been approved, Property Services continue to consider other property opportunities. These are subject to the parameters of the current capital and revenue programmes. At this stage and pending the outcome of the Estates Panel strategy review, planned disposals are limited to residential property disposals only.

Key Construction Projects

21. Following completion of works at the end of March 2009 to Havering Patrol Base (Spilsby Road) the building is now occupied and operational; and was officially opened by the Commissioner, on the 20 July 2009.

22. Works commenced in January 2009 at Greenwich Patrol Base (Warspite Road). Completion of the works and occupation by the BOCU is now anticipated in September 2009. Discussions are ongoing with regard to the potential creation of a Borough CCTV Control Room and/or storage facilities within the same building.

23. Work commenced in July 2009 at Waltham Forest BBCC (Leyton). Completion is anticipated in October 2010; progress to date has been in line with expectations.

24. The commencement on site of the planned project at Lillie Road, London SW6 has been delayed by the completion of the formal discharge of the planning conditions with the London Borough of Hammersmith and Fulham, it is anticipated that works will commence in September 2009.

25. Following MPA approval to the revised proposals in regard to Heathrow Policing facility and financial implications associated hereto, it is anticipated that construction contracts will be entered into in September 2009 with commencement on site in October 2009.

26. Detailed design is underway in regard to Barking and Dagenham (Fresh Wharf) Combined BBCC and Patrol Base with an anticipated site start date in November 2009.

London 2012 Olympics

27. Various meetings and workshops have taken place between property Services and CO to identify responsibilities for the different aspects of the event, and to ascertain support required. Areas include Centralised Coordination Centre facilities, and general office accommodation requirements in the lead up to and throughout the Games period, as well as the off-site Briefing & Deployment centres, feeding centres, etc., required during Games time.

28. Meetings have been held with the LDA in regard to Olympics Legacy Master Planning and with specific Local Authorities in regard to temporary facilities required in Games time.

Special events

29. The Special Events Team has supported a range of events since the last update from ceremonials, demonstrations and pop concerts to international sporting events. These events included:

• Queen’s birthday parade (including two rehearsals)
• Police Cadets 21st Anniversary Parade
• Biggin Hill Air Show
• All-England Tennis Championships
• ‘Hard Rock Calling’ concerts in Hyde Park (Some 350,000 people attended the seven events).
• ‘Campaign against Police Violence’ Rally (along with various community events including the Dagenham town show and the Lambeth country show.)
• Notting Hill Carnival - Special Events continue to plan and work towards this year’s Notting Hill Carnival, which is set to be one of the biggest and most complex to date; work on this has included the creation of CCTV Control Room facilities and reception point facilities.
• Operation Bentham - Running concurrently with Notting Hill Carnival, is the support provided to the Climate Camp.

30. The above events require detailed planning to install traffic management systems, observation posts, crowd-control barrier systems, pedestrian and vehicle track ways, security fencing and hoarding, vehicle mitigation measures, temporary cabins and kitchens, marquees, toilets, temporary power supplies, water and sewage services, cleaning and waste management / recycling facilities.

31. Additional activities undertaken are included under Exempt Appendix 4.

Environmental Management Programme

32. The Environment Management Programme for 2009/10 has been published on the MPS website and publications list. At quarter one 2.2% of targets have been achieved; 89.1% are ongoing; 6.5% are slightly off track but achievable in longer timescales and 2.2% give cause for concern.

33. The MPS has been recommended for a gold award following an external audit of the 2008/09 progress review as part of our commitment to the Mayor of London's Green Procurement Code. This award is an improvement on silver award received last year and recognises the MPS’s commitment to Responsible Procurement. Evidence was provided on how the MPS has successfully embedded responsible procurement considerations within processes and procedures as well as spend on environmental products and services.

34. The Head of Environment and Sustainability in partnership with Transport Services is leading on behalf of the GLA Group on a feasibility study to baseline the current GLA group fleet and understand the requirements of these vehicles to explore potential opportunities for the greater use of electric vehicles. A report is currently being drafted which will be presented to the MPA in October.

35. A Corporate Social Responsibility Manager has joined the MPS Environment Team to lead on the development of the new MPS Corporate Social Responsibility Strategy 2010 - 2013 as well as working with business groups to mainstream CSR considerations within budget and business planning.

36. The Environment Team is also working across the MPS directorates to review its environmental communications and develop an MPS wide awareness campaign. The awareness campaign will focus on how MPS employees can minimise impacts on the environment through increased efficiency and productivity. To date a bespoke MPS specific environmental training course has been delivered to 28 Facilities Management staff which resulted in the development of building specific action plans to tackle carbon, waste and water management. As part of the wider environmental awareness campaign, a successful consultation period has now concluded which resulted in engagement with 572 MPS employees through face to face consultation and focus groups as well as over 941 employees completing the online survey. Work will continue to analyse results to inform the development of the environmental communications strategy which will be launched in autumn 2009.

37. The London Development Agency has issued the ITT for Tranche Three of the Building Energy Efficiency Programme (BEEP). The MPS are a member of the Steering Group incorporating lessons learnt from Tranche One, where work is due to commence at 10 MPS buildings in autumn 2009.

38. Working closely with the Modernising Finance & Resource Team, the Environment Team has recently introduced an internal 'Swap Shop'. Since launching the scheme in June 2009 over 1,400 items have been advertised. This translates to savings of well in excess of £8,000 through Resources staff obtaining surplus office equipment and stationery items from colleagues instead of ordering new.

39. 91 office-recycling schemes have been launched across the estate since 2007 (including sites covered by the FMS contract, CCC sites and PFI police stations). Both FMS suppliers suspended the scheme (March 2009 in the South and September 2008 in the North) due to lack of funding to purchase the internal bins. Of the 100 priority FMS sites identified for the first roll out phase in 07/08, 16 are still outstanding. The MPS is planning to submit a funding bid to the London Waste and Recycling Board for Capital funding to continue the recycling roll out. The Waste and Resources Action Programme (WRAP) have delivered training to MPS construction partners to assist the MPS with meeting its commitment to halve construction waste by 2012.

40. The MPS Environment team has submitted an expression of interest to the London Recycling Board for funding for the extension of the MPS recycling scheme to a further 100 sites across the MPS.

Climate Change Action Plan (CCAP)

41. The CCAP continues to be the umbrella programme to deliver our carbon reduction target. The plan includes both BEEP and SALIX (MPA) approved budget £5.725m + Salix grant). The MPS target is to reduce carbon emissions by 10% by 2010 against 2005/06 levels and 30% by 2025.

42. The published conversion factors used to calculate our carbon performance have been adjusted to recognise the mix of primary generating fuels (reduction in nuclear and increase in coal fired) this alteration in grid mix will adversely affect our reported carbon reduction performance in spite of continuing good performance on energy consumption.

43. The 10 sites forming Tranche 1 of the BEEP programme are all progressing through the various stages of evaluation and approval. Work has commenced on site on some of the projects.

44. As part of the CCAP work continues in implementing voltage reduction equipment at the highest electricity consuming sites. These installations reduce energy consumed without detriment to operational performance and are an integral part of the CCAP.

Energy Performance Buildings Directive (EPBD)

45. As required by the Directive all eligible 109 sites have been issued with a DEC and an advising report. The reports have now been analysed and a report issued. The benchmarks arising out of these reports provide a means of yearly comparisons but overall do not accurately reflect the effects of police activities within a 24/7 environment on our energy performance. The actions arising from the reports are now being prioritised along with the existing ongoing requirements of the directive with regards air conditioning inspections.

C. Race and equality impact

Any equality and diversity implications arising from the matters referred to in this report are being assessed as part of the individual project or item and will be reported separately to the Committee at the appropriate time.

D. Financial implications

Any financial implications in regard to the items included under the appendices will be reported in full to the relevant committees at the appropriate time.

E. Legal implications & risks

1. Contract or other documentation in regard to the items referred to under the appendices will contain all the usual commercial terms and provisions, and no unduly onerous or unusual terms – except where reported otherwise.

2. Significant risks have been evaluated and considered and steps taken to minimise or manage such risks.

3. All reported matters are considered to be within the powers of the Authority.

4. All/any disposal represents the best consideration that can reasonably be obtained – save where stated otherwise.

F. Background papers

• None

G. Contact details

Report author: Jane Bond, A/Director, Property Services, MPS

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

List of Abbreviations

• BOCU - Borough Operational Command Unit
• CAMB - Computer Aided Modelling Bureau
• CBRN - Chemical, Biological, Radiological Nuclear
• CCC - Command, Centre, Communication
• CCSA - Climate Change Action Plan
• CO - Central Operations
• CPS - Crime Prosecution Service
• CT - Counter Terrorism
• CTC - Counter Terrorism Command
• DoI - Directorate of Information
• DoR - Directorate of Resources
• DPA - Directorate of Public Affairs
• DVI - Disaster Victim Identification
• EPBD - Energy Performance Buildings Directive
• ESP - Estates Strategic Plan
• FMS - Facilities Management Suppliers (from 2007)
• GLA - Greater London Authority
• LB - London Borough
• MoE - Method of Entry
• MPA - Metropolitan Police Authority
• MPS - Metropolitan Police Service
• MPSTC - Metropolitan Police Service Training Centre
• NPIA - National Police Improvement Agency
• ODA - Olympic Delivery Authority
• OFT - Office of Fair Trading
• OJEU - Office Journal of the European Union
• OSG - Operational Support Group
• PFI - Private Finance Initiative
• PS - Procurement Services
• PSD - Property Services Department
• SCD - Serious Crime Directive
• SLA - Service Level Agreement
• SEL - South East London
• SN - Safer Neighbourhoods
• SN2 - Safer Neighbourhoods Stage 2

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