Estates update paper

Report: 9
Date: 16 December 2010
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. Recommendations

That members

1. note the Directorate of Resources Property Services’ update provided.

B. Supporting information

Introduction

1. At the MPA Finance and Resources Committee on 19 December 2009, it was agreed that Directorate of Resources - Property Services should continue to provide a report on real estate and property related issues on a quarterly basis. Source documents can be found on previous relevant reports and also in the Members’ Library. The last paper was presented in September 2010.

2. In addition to maintaining the existing MPA estate; undertaking modernisation programmes and providing facilities to meet operational needs through our corporate real estate approach, and addressing environmental issues through the Corporate Social Responsibility Strategy, the DoR - Property Services includes a specialist operational support team who provide logistical support at major incidents; 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. This Paper provides updates on specific work-streams and key areas of responsibility; where approvals are required for specific programmes or projects, proposals will be presented separately.

Market Overview

Residential

4. In the past quarter property related indices have shown that house prices are in decline across the UK. Market opinion suggests this period is the start of a decline in prices through into 2011.

5. The London market has generally slowed down with fewer transactions in recent months. This is due in part to the continuing lack of supply of mortgages, for first time buyers and seasonal variations. The time taken to complete a transaction has also risen with far longer marketing periods being reported. Prices have also declined in the last quarter, although not as steeply as prices across the rest of the country. The continuing economic uncertainty is reducing buyer confidence and causing prices to decline.

Commercial Property Market

6. The rate of growth in values in the past quarter has slowed significantly with some sectors, seeing a fall in value. With interest rates remaining stable property remains an attractive investment. There is still demand for good quality, well let investments.

7. With all financial markets showing greater volatility, trends are difficult to ascertain or agree on. The amount of commercial property owned by banks as a result of loan defaults and the value of loans to be re-financed in the near future is a concern in terms of stable market values over the next 12 months.

Estate Strategy

8. The MPA/MPS Estate Strategy was approved at the October 2010 Finance and Resources Committee. The document will be available on the internet and in hard copy within the next few weeks. There are a number of implementation plans that support the estate strategy with further plans under development, including those for Hendon and New Scotland Yard. In other areas existing plans have been reviewed or refreshed. These include Residential and Town Planning plans.

Corporate Real Estate

9. Aligned to Policing Plan objectives, the Corporate Real Estate approach which has been adopted by the MPS is expected to:

1. Ensure the estate is fit for purpose, to enable high quality policing in London;
2. Optimise the efficiency of the estate, making best use of accommodation; disposing of assets where appropriate, and
3. Achieve cashable savings.

10. A number of projects are underway to increase the utilisation of key buildings, including Marlowe House, Empress State Building and Jubilee House as well as plans to redevelop elements of the Hendon Estate (a separate exempt report is being presented to this Committee in regard to Hendon).

11. As a consequence of these changes a number of buildings will be surplus and are intended to be sold or released on lease expiry. These have been or will be subject to separate reports to the MPA..

Residential implementation plan

12. Following MPA approval to the ongoing Residential Strategy, DoR-Property Services have reviewed/updated the Implementation Plan to deliver two further Section House closures and to further reduce the 213 bedroom residential units to a maximum of 200. A further 5 properties were taken to auction on 7 December 2010. Members will recall that the rental levels levied against those occupying residential properties (where such charges apply), are subject to review/change with effect from 1 April each year. Any increases are based on social housing rents and one month’s notice must be given. Previously this has been reported as part of regular estate update papers. In terms of timing, a separate paper will be presented to Committee in February 2011.

Disposals

13. A summary of the updated disposal plan for 2010/2011, which was approved at the October 2010 Finance and Resources Committee is attached at Exempt Appendix 1. The revised approved capital receipts budget for 2010/11 is £22.30 million. The MPA are on target to deliver these receipts in support of the capital programme.

14. Following the October Committee, agents have been appointed to act and are now actively marketing a number of buildings for sale. Proposals in respect of each of these buildings will be presented to the MPA Finance and Resources Committee in January and February 2011.

15. A separate paper proposing the 2011/2012 MPA Disposal Plan is being presented to this Committee. The budget for disposals in 2011/12 is £40 million.

Safer Neighbourhoods

16. Current position in regard to Safer Neighbourhood bases was presented to the Finance and Resource Committee on 18 November 2010. Part of the Corporate Real Estate approach, facilities will be provided to support operational needs.
Acquisitions

17. There are no defined acquisitions to be reported.

Imber Court Sports Club

18. An update on the progress of the arrangements between the MPA and the Sports Club is detailed at Exempt Appendix 2.

Construction projects

Custody Centres

19. Waltham Forest Custody Centre at Leyton is now operational - 22 November 2010.

20. The buildings on the site that will accommodate the Croydon Custody Centre have been vacated and works are underway to arrange for site clearance. The outcome of the town planning application is anticipated at the end of December 2010. Construction works are due to start after this date.

21. Approval to the development of the Wandsworth Custody Centre was approved by the MPA Finance and Resources Committee in October 2010 with an anticipated commencement of construction works in March 2011 and completion for occupation by June 2012. As requested by the MPA, proposals to include Safer Neighbourhood facilities at the site are being developed these will form part of the town planning application that will be made in December 2010. DoR - Property Services are in liaison with colleagues regarding arrangements for the Mounted Branch team located on site.

Combined Patrol Base/Custody Centres

22. The scheme at Polar Park, Heathrow continues to progress in line with both the project timelines and budgets and will be operational in April 2011.

23. The scheme at Fresh Wharf, Barking and Dagenham continue to progress on target and will be operational in February 2011.

24. Works were completed in October 2010 at Lillie Road, London SW6. The base is now occupied and fully operational. The official opening by Lord Toby Harris was carried out on Friday 26 November 2010.

Office accommodation

25. Empress State Building - the Strategic Coordination Centre to support London Resilience will be completed in March 2011. Works to floors 25 and 26 are progressing and will be completed in April 2011. Works to floors 21-23 will commence February, with occupation scheduled for the end of July 2011.

26. New Scotland Yard - The National Counter-Terrorism Co-ordination Centre (NCTCC) is now operational, and was (is due) officially opened by the Home Secretary on 8th December 2010. Works continue on the 6th, 7th and 12th Floors with completions due over the next four months. Various logistical moves are planned with several of the projects involving high degrees of technological installations. Further projects to the 14th - 19th floors to enhance infrastructure and resilience of the building are ongoing.

Training accommodation

27. Sunbury Training Centre closed at the end of October 2010, with trainers and facilities relocating to Empress State Building and Croydon. The building, now surplus to operational needs is subject to discussion under a separate paper being presented to F&R Committee. Plans in regard to the provision of accommodation at Hendon and Marlowe House, Sidcup, are under development.

Warehousing

28. Meridian Warehouse, Greenwich, will be vacated this month, in line with the lease expiry in December. Use of the (previously) vacant area at Warspite Road, Greenwich has enabled DoR-Property Services to maximise the use of space without increasing revenue costs. The savings achieved have been included within currently 2010/11 and 2011/12 budgets.

Delivery of Property Services

29. Separate from the Corporate Real Estate approach, DoR - Property Services have implemented a programme to enhance the delivery of services provided by the team. This includes; a review of existing staffing structures to ensure the team are aligned to operational needs; a review of existing contractual arrangements and exploiting asset leverage opportunities.

30. A new staffing structure for the Department has been identified and will be introduced (in a phased approach) in 2011. Full consultation has been undertaken with the Unions in this regard.

31. Various workstrands have been identified and are underway in regard to existing contractual arrangements, these are referenced within this document. Work in regard to Asset leverage will commence in 2011.

PFI Management

MPSTC Gravesend PFI

32. Work continues with the PFI Service Provider to maximise the use of the facilities and identify savings opportunities. Operational training requirements will be confirmed for 2011/12 and enable DoR - Property Services to ensure suitable contract provision.

South East London PFI

33. The PFI Service Provider continues to provide good levels of service at the South East London Police Stations of Lewisham, Sutton, Bromley and Deptford with no major issues reported.

Business rates

2000 Rating List

34. As previously reported an appeal has been lodged with the Lands Tribunal against the rateable value of New Scotland Yard. This appeal is ongoing and is likely be heard in 2012.

2005 Rating List

35. This rating list closed on 31 March 2010. Since the last reporting period a further 8 appeals have been successfully settled resulting in a further £911,000 of savings. 172 appeals have now been successfully settled resulting in £9.5m in savings over the last two years. There are 79 outstanding appeals including NSY and it is projected that these will be concluded by July 2011, with the exception of NSY which will be heard in 2012. The savings that have been realised and the further savings anticipated, have been included in the 2010 / 2011 revenue budgets.

2010 Rating List

36. Since the last reporting period, the MPA’s retained rating consultant Lambert Smith Hampton have developed an implementation plan to support the appeals which will be made over the course of the next 18 months. This is focussed on maximising successful appeals and generating savings to the MPA/MPS in terms of business rates’ liabilities.

Facilities Management contracts

37. The standard of service provided by the Facilities Management suppliers Balfour Beatty Workplace (BBW) and Interserve Facilities Management (IFM), remains high. The number of complaints raised continues to fall year on year. This figure is backed by an increase in overall customer satisfaction drawn from independent surveys. Performance against planned preventative maintenance shows a slight downturn in this quarter due to the lack of provision of supporting documentation within specified timescales, despite works being physically completed on site. SIP savings initiatives have resulted in some supplier organisational changes that have also contributed to this downturn.

38. The operational performance figures recorded in this quarter in regard to the Metropolitan Police Information Centre (MPIC); a service provided through Atkins, reveals a small downturn this quarter in regard to percentage of calls answered and customer satisfaction. This is against an ‘in year’ increase against 2009/10.

39. The table shown in Exempt Appendix 3 details the high level statistics for the two Facilities Management suppliers (FMS) and the Help desk (MPIC). This gives an overview of progress from the first year of the contract through to the current reporting period.

40. Significant progress has been made with both FM suppliers to identify and implement cost saving initiatives across the estate. Early opportunities have already been implemented, with further opportunities to follow. DoR - Property Services are currently developing communications lines for MPS use to support those using the MPIC and FMS Services.

41. Further contractual matters are outlined in Exempt Appendix 4.

Operational support

42. The ‘Special Events’ Team has supported a range of events since the last update, including:

• Papal Visit by Benedict XVI
• Diwali & Eid Festival Celebrations
• A series of Royal Visits
• Festival of Remembrance (Royal Albert Hall) / National Service of Remembrance (Whitehall)

Future events include:-

• Princes Trust Concert (Royal Albert Hall)
• New Year’s Eve Celebrations

Olympics

43. As stated in the last update, Olympic accommodation requirements within the existing MPA Estate are progressing in accordance with the programme.
44. Since the last reporting period, a town planning application has been submitted for the North East London Muster Briefing and Deployment Centre (MBDC) site to support operations during the Games. The possibility of a Judicial Review has been raised by a local activist group regarding the Application, this is being monitored. There is a need to amend (via a Legislative Reform Order) the Epping Forest Act of 1878. This amendment is to enable enclosure of the proposed site, for a limited period during the Games. The Home Office and the City of London Corporation are aware of these matters and are committed to continuing with the application.

45. Plans are now well advanced in regard to the South East MBDC and it is anticipated a town planning application will be submitted in December 2010. The MBDC for West London is in development with negotiations underway.

46. The Directorate of Resources - Property Services team has been working closely with staff across the MPS to review Olympic Games related sustainability issues to allow the MPS to develop a Sustainable Event Management System in line with BS8901. Following recent trials for the segregation of recycling at Operational Events during 2010, the MPS has achieved recycling levels of at least 40% of all waste generated on site, with zero waste going direct to landfill (in line with LOCOG aspirations). It is likely that, in addition to existing schemes for cardboard, paper, plastics and metals, the recycling facilities for the Olympics will include a composting scheme for all biodegradable waste (food and compostable packaging).

Residential provision

47. A separate report is being presented in regard to residential accommodation requirements for those officers seconded under mutual aid arrangements. DoR-Property Services are supportive of this proposal as there is insufficient availability of accommodation required within the existing MPA Residential Estate.

Environmental Management Programme

48. The MPS Corporate Social Responsibility Strategy 2010 - 2013 has now been published following earlier approval. The MPA/MPS Joint Environment Report for 2009/10 has also been published and includes a review of key environmental achievements over the past five years.

49. The development of the environmental awareness ‘Think Green’ campaign is now complete. The campaign will run as a pilot at Paddington Green Police Station and the Peel Centre, Hendon before the campaign is fully rolled out across the rest of the estate during the remainder of 2010/11. The campaign will be monitored through a number of methods including energy consumption data and follow up environmental awareness surveys.
50. A mandatory training programme has been delivered to 320 Resources employees to raise awareness of Waste and Recycling Standard Operating Procedures and compliance requirements.

51. A network of volunteer Environmental Champions has been recruited from all Directorates across the estate. Training has been delivered on key sustainability issues and the Champions will be used to implement and promote elements of the ‘Think Green’ campaign.

Climate Change Action Plan Programme

52. The Climate Change Action Plan (CCAP) Programme outcomes were reported in the MPA/MPS Environment Report for 2009/10. Highlights included:

• Carbon emissions reduction from buildings projects (excluding those fully implemented but where benefits are not yet been fully realised) is 4.4% on 2005/06 levels;
• Carbon emissions reduction from all buildings projects to date (including those where benefits have not yet been fully realised) is 11.6% on 2005/06 levels (subject to confirmation at the end of 2010/11);
• Projects will result in savings of 15,417 tonnes CO2 and £2.4 million.
• In addition, projects will result in avoided CRC Energy Efficiency Scheme costs.

53. A new short term carbon reduction target for 2010 - 2013 has now been developed: The measure is the percentage change in total tonnes of CO2 emissions from i) buildings, ii) vehicles and iii) operational air travel.

Target: 22% reduction by 2012 on baseline 2005/06 (representing a further 15% reduction on 2005-2010 target).
The scope of carbon emissions reported includes emissions from the estate buildings, operational transport fleet and operational air travel.

54. The Comprehensive Spending Review proposes changes to the CRC Energy Efficiency Scheme for the MPS. The DoR - Property Services team will monitor this proposal, as the changes would result in higher financial costs to the MPA / MPS.

Town Planning update

London Plan review progress

55. The GLA have now concluded their consultation stage in regard to the Draft London Plan. The MPA / MPS lobbied for certain amendments to be made in terms of planning obligations, specifically S106 obligations. The GLA have not amended the wording of the Draft London Plan to reflect the MPA / MPS’s concerns, but will utilise the next stage of the Plan review to re-assess the MPA/MPS’ requirements in this regard.
56. The GLA are producing an Implementation Plan to set out how the policy objectives of the London Plan are realised. The initial draft is due to be published in early 2011. The draft list of actions has been amended to include Implementation of the MPA/MPS Estates Strategy within the Social Infrastructure section.

57. The basic principle of the ‘Implementation Plan’ is a range of strategic and tangible implementation actions for the GLA group, partner organisations and delivery agencies covering all policy areas. The Implementation Plan also addresses more specifically the strategic infrastructure that is required to support the growth set out in the Plan, and can include policing. This can be achieved through appropriate representations to the GLA.

Localism

58. Significant town planning reform is proposed to reflect the Localism agenda. An amended Parliamentary Bill is expected to be published at the end of November and is likely to contain the following:

• Abolition of regional spatial planning
• Increased planning powers for Local Authorities and neighbourhoods/residents
• New powers to help save local facilities and give communities the right to bid for local state-run services
• New community trusts to assist local people to build new homes for their communities
• Establish detailed plans to ensure the Olympic Legacy is delivered

59. Regional Development Agencies (RDAs) are to be abolished and replaced with Local Enterprise Partnerships (LEPs) - joint Local Authority Business partnerships brought forward by Local Authorities to encourage economic Development. The London Mayor has indicated that a solitary LEP should operate across London, rather than neighbouring boroughs pursuing an individual agenda.

60. The London Thames Gateway Development Corporation is to be abolished and function handed to Local Authorities and the GLA.

Community Infrastructure Levy

61. The Community Infrastructure Levy (CIL) proposals are still being pursued. CIL requires Local Authorities to produce a charging schedule which will identify spending priorities in each Local Authority area. These will be subject initially to consultation, and it is essential that policing is presented at this early stage in order to ensure continued contributions from development to mitigate its impact upon policing.

62. In line with the theme of localism, CIL will be amended to give communities more control over how it works with a ‘meaningful proportion’ being allocated to a neighbourhood fund. Levy rates will be set out in consultation with local communities and developers will know up front exactly how much they will be expected to pay towards infrastructure.

C. Other organisational and community implications

Equality and Diversity Impact

1. 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.

Consideration of MET Forward

2. The Corporate Real Estate and Delivery of Property Services’ strands are obliged within the intent of Met Forward, in particular demonstrating value for money.

Financial Implications

3. The costs associated with the activities set out above are contained within existing budgets as agreed within the 2010-13 Business Plan as approved by the MPA on 01 April 2010.

4. 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.

Legal Implications

5. There are no direct legal implications arising from this report which is submitted for information only.

6. Some of the issues canvassed in the report may have contractual and procurement implications arising, and will need to be dealt with on a case by case basis.

7. Other property related matters highlighted in this report will need to be subject to further detailed analysis, and require further reports to progress the property transactions.

8. Specialist external legal advice is available through Met Law, as and when required.

Environmental Implications

9. Consideration of the environmental implications associated with the management of the MPS Estate is core to Property Services activity as referenced in the main body of this report. Property Services co-ordinate the environmental objectives across the MPS as part of the MPS Corporate Social Responsibility Strategy and are driving forward the integration of the CSR Strategy objectives within corporate decision making processes.

Risk Implications

10. This is an update paper and risks will be dealt with at a Programme and/or project level.

D. Background papers

None

E. Contact details

Report authors: Jane Bond, Director Property Services, MPS

For more information contact:

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

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