Estates update paper

Report: 11
Date: 24 March 2011
By: Director of Resources on behalf of the Commissioner

Summary

This report

A. Recommendations

That Members note the contents of this report.

B. Supporting information

Introduction

1. At the 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. The last report was presented to this committee on 16 December 2010.

2. In addition to maintaining the existing MPA estate; undertaking modernisation programmes and providing facilities to meet operational needs through a corporate real estate approach, and addressing environmental issues through the Corporate Social Responsibility Strategy, 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 report 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. Over the last three months the number of house sales and values achieved have declined compared with previous levels, but trends are difficult to assess at the present time. The lower number of transactions is mainly caused by the continuing restriction in mortgage supply.

5. With recent contradictory financial indicators the outlook for house prices in 2011 is uncertain. The increasing likelihood of a rise in interest rates will also have an impact on the affordability of mortgages for new buyers.

Commercial Property Market

6. The rate of growth in values in all sectors has been slow over the past quarter. The continuation of low interest rates makes property an attractive investment and demand for good quality investments remains high.

7. Contradictory financial indicators mean the outlook for commercial property also remains uncertain in 2011. With the exception of West End and City office schemes, there is very little speculative development at present which is having an impact on tender prices as the construction industry bids for scarce business.

Estate Strategy

8. Following MPA approval to the document in October 2010, the strategy has been published on the MPA / MPS websites.

Corporate Real Estate

9. CRE is on track to deliver the accommodation projects and property releases planned for 2010/11, as agreed by the MPA. These include space utilisation initiatives at Empress State Building, Marlowe House the closure of Sunbury Training Centre, and Penryn Road, in preparation for the exit of a number of properties across the estate.

10. Proposals for 2011 / 2012 have been developed and discussed within the MPS. The opportunities to release surplus asset have been identified and in December 2010 the MPA approved the marketing for sale of the next tranche of properties.

Disposals

14. A summary of the updated disposal plan for 2010/11 is shown at Exempt Appendix 1. The approved capital receipts budget is £22.30 million and the MPA are on target to deliver these receipts in support of the capital programme.

15. Following marketing campaigns by external agents, five properties were recommended for sale at the MPA Finance and Resources Committee in January 2011 and all of the sales were approved. Completion of these sales is now progressing.

16. The budget for capital receipts in 2011/12 is £40 million.

Residential

17. Following MPA approval in February 2010, the rental levels charged in regard to those in occupation of the residential estate will increase by 6.05% in April 2011, in line with the increases in registered social rents. Crown Housing Association leases 255 houses/flats from the MPA. Each house or block of flats is subject to a separate lease expiring in phases between December 2010 and December 2015. The leases for a house in Bromley, flats at Iver Court, Islington and flats at Imperial Drive, Harrow (totalling 16 units) ended at the beginning December 2010 and were returned with vacant possession. The Iver Court flats form part of a large holding at the same site, the whole of which is identified as part of the core estate to be retained indefinitely. The former Crown Housing Association flats are to be refurbished for operational requirements. The single house and the five flats at Imperial Drive are being prepared for disposal.

18. The leases for a further nine properties will expire by 31 December 2011. These properties do not form part of the core estate and will be disposed of as soon as possible after their return. The proposed disposals will be reported separately to the MPA at a later date.

Safer Neighbourhoods

19. Following approval by the MPA Finance and Resources Committee in November 2010, works to complete properties with Safer Neighbourhood (SN) Programme have continued. The review of the performance / effectiveness of existing SN properties, working closely with the TP Development Programme and dovetailing with their review of the requirements for SN teams. The next regular update will be provided to F&R in April 2011.

Acquisitions

20. There are no defined acquisitions to be reported.

Imber Court Sports Club

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

Construction Projects

Custody Centres

22. The demolition phase on the site that will accommodate the Croydon Custody Centre has been completed allowing the main construction works to commence on 24 January 2011. The facility is due to be operational in April 2012.

23. Arrangements to relocate the existing occupants on the site of the Wandsworth Custody Centre are on target for completion by the end of March 2011. Following the planning application submission in December 2010 the scheme was approved at a Planning Applications Committee meeting on 10 February 2011 with a recommendation for approval. Works on site are due to commence in March with the preparation of the existing buildings for demolition.

Combined Patrol Base/Custody Centres

24. The schemes at Polar Park, Heathrow and Fresh Wharf, Barking and Dagenham continue to progress on target with regard to timelines and budgets, with a phased occupation of Fresh Wharf due to begin in February 2011 and Polar Park due to be operational in April 2011.

Office Accommodation

25. Empress State Building - The Strategic Coordination Centre to support London Resilience awaits final technological installations and the facilities are now in use as meeting rooms. Building works to floors 25 and 26 are complete with the technology installations to be completed by April 2011. Works to floors 21-23 will commence by the end of February 2011. Occupation is scheduled for the end of July 2011.

26. New Scotland Yard - The works to deliver the National Olympic Coordination Centre (NOCC) have been completed with technology installations ongoing towards a projected occupation in April 2011. Works continue on the 6th and 7th floors with sectional 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.
Hendon Programme

27. Following MPA approval to the initial stages of the Hendon Programme, various moves are underway at Hendon to vacate buildings prior to the demolition of buildings 37-38 and the ‘Swim Gym’. A further report will be prepared for the MPA on Hendon in July.

Warehousing

28. Former warehousing facilities at Meridian Industrial Park, Greenwich were vacated in December 2010 following the opening of facilities at Warspite Road. The closure of the building at lease expiry will realise savings of over £700,000 a year to the MPA / MPS. A similar exercise is taking place at Tideway Industrial Estate, Wandsworth by March 2011, which should save around £400,000 a year.

Delivery of Property Services

29. Activities continue to modify the structure of DoR - Property Services to align with operational needs, ensuring that a stable service is maintained. Peter Ross will take the responsibility for the Hendon Programme from 1 April 2010; Roger Harding will take responsibility for the Construction Department (formerly Programme Delivery) including the strategic development team from the same date.

PFI Management

MPSTC Gravesend PFI

30. The 2011/12 MPS Operational Annual Training Plan for MPSTC Gravesend has been issued. Base training requirements may need to be increased in view of the additional demands from the Olympics and other more recent security threats. It is anticipated that these requirements can be delivered by MPSTC Gravesend, complemented by other peripheral training locations.

South East London PFI

31. Service levels continue at the South East London Police Stations of Lewisham, Sutton, Bromley and Deptford with no major issues reported.

32. Work is underway at Sutton to create further office space in support of the Corporate Real Estate strategy and to facilitate disposal of surplus accommodation elsewhere within the MPS estate.

Business Rates

2005 Rating List

33. Since the last reporting period a further 28 appeals have been settled providing a further £100,000 of savings. 195 appeals have been successfully settled resulting in £9.75m in savings from this rating list. There are 51 outstanding appeals including NSY and it is projected that with the exception of NSY these will be concluded by July 2011. The outstanding NSY appeal will be heard in 2012 in line with the 2000 Rating List appeal. The savings that have been realised and the further savings anticipated are included in the 2011/12 revenue budget.

2010 Rating List

34. The MPA’s retained rating consultants Lambert Smith Hampton (LSH) are now implementing the first phase of the appeal strategy. By the end of March 2011, LSH will submit 99 appeals to the Valuation Office. These appeals are all likely to be heard by December 2012. It is not possible to quantify the likely savings at this stage.

35. LSH are in discussions with the Valuation Office to bring Leyton Custody Centre and Barking Patrol Base into the 2010 Rating List. Both buildings will be assessed and entered into the list over the next two months. Their estimated liabilities have been included in the 2010/11 revenue forecast and 2011/12 budget.

Facilities Management Contracts

36. The standard of service provided by the Facilities Management suppliers Balfour Beatty Workplace (BBW) and Interserve Facilities Management (IFM), remains high and within the required thresholds, whilst the number of complaints raised remains low.

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

38. Services provided through the MPIC service provider (Atkins Asset Management) have been subject to a Deed of Variation. This is detailed in Exempt Appendix 4 along with other contractual matters. This deed has been driven under SIP to achieve a percentage saving across this contract.

39. The furniture contract continues to provide support to the CRE programme such as running a “furniture amnesty” in December 2010 / January 2011. This involved removing redundant furniture and recycling where relevant. The supplier, Wagstaff was a recent winner in the Mayor's Responsible Procurement Awards in the “Most promising contribution by an SME” category. A six month review paper for the furniture contract will be submitted this quarter.

Operational Support

40. Since the last update major events supported by the ‘Special Events’ team include:

• Eight student demonstrations in and around central London
• State visit by the Vice Premier of the People’s Republic of China
• New Year’s Eve Celebrations/New Year’s Day Parade

41. Significant forthcoming events, where OSG will be providing support to operational policing include:

• TUC March and Rally on 26 March
• London Marathon on 17 April
• The Royal Wedding on 29 April

Olympics

42. Olympic accommodation requirements within the existing MPA Estate continue to progress in accordance with the programme and are now nearing completion.

43. The town planning application for the North East London Muster Briefing and Deployment Centre (MBDC) was approved by the Planning Committee on 24 February. A petition was submitted (1800 signatures) against the application by the local activist group. The amendment to the Epping Forest Act of 1878 (via Legislative Reform Order) needed in order to allow enclosure of the site has been submitted and is progressing through the necessary processes. There have been no further developments in respect of the potential Judicial Review. The Home Office and the City of London Corporation remain supportive of the application.

44. Progress has also been made towards ensuring the MPS are contributing to the most sustainable Olympic Games ever through the implementation of a sustainability management system. Pilots for waste and recycling have been carried out at Notting Hill and Wimbledon events which achieved recycling rates of 15% and 40% respectively.

45. A separate report and Business Case has been submitted as part of the logistics strand of the Olympic Programme for Residential Accommodation for Mutual Aid Officers. DOR - Property Services are supportive of the proposals.

Corporate Social Responsibility Strategy

46. The MPS published its Corporate Social Responsibility (CSR) strategy for 2010-2013 in November 2010. The first MPS CSR report will be published in September 2011.

47. A review of the Corporate Real Estate programme is being carried out to identify the environmental impacts associated with disposing of old inefficient buildings, and improving utilisation of our existing estate. The MPS Sustainable Design Checklist and Sustainable Construction Code of Practice are being reviewed to ensure the MPS is leading the development and refurbishment of new facilities. The MPS continue to demonstrate excellent progress against its construction waste recycling targets with an average of 98% recycling rates being achieved on patrol base developments.
48. In January, the MPS Head of Environment and Sustainability chaired the National Police Environment Advisory Group (NPEAG), a subgroup of the Police Property Service Managers Group (PPSMG). The NPEAG is assisting the PPSMG with the development of environmental benchmarking for estates.

49. Property Services is also supporting the social elements of the CSR Strategy. The MPS has ensured that all staff are paid at least the London Living Wage, which has had an impact on 691 members of staff. A construction supplier is intending to recruit 15-20 ex-offenders to work on a closed site from May 2011. In addition, we are working with Interserve to investigate the possibility of five technical, and 20-30 cleaning apprentices in support of Mayor’s Responsible Procurement targets.

Climate Change Action Plan Programme

50. The outcomes of the Comprehensive Spending Review continue to have implications for the CRC Energy Efficiency Scheme. The CRC will now take the form of a carbon tax with considerably higher annual costs for the MPA/MPS (approximately £1.5m per annum).

51. Property Services Carbon Management team has provided input to the Environment Agency’s first stage consultation process on the CRC, and will shortly respond to the second stage consultation.

52. A CRC-readiness Action Plan has been developed to ensure that the MPS can meet the key reporting deadlines. A carbon footprint must be submitted by the end of July 2011, and an evidence pack must be in place ready for possible audit from August 2011 onwards.

53. Work has been undertaken to scope potential carbon reduction initiatives (pipeline projects) in readiness for the 2011/12 financial year. The early identification and procurement of projects is intended to ensure maximum budget utilisation and associated benefits from reduced energy consumption, lower utility costs, and avoided CRC carbon tax.

54. The EMP 2010/11 included a target to develop a carbon strategy framework by the end of Q3, 2011. This document has been completed and is currently under review. It will be finalised at a Climate Change Action Plan (CCAP) strategy board meeting during Q4. The document will set the priorities for carbon management activities for 2011/12.

Town Planning Update

London Plan Review Progress

55. Representations on behalf of the MPA/MPS were made to the draft London Plan (DRLP) in early 2010 and followed up in June and August 2010 as part of the public examination (EiP) process. Representations regarding the inclusion of policing as a S106 recipient were not accepted by the GLA, but will be considered by the 'Panel' tasked with reviewing the London Plan. The Panel will issue their report detailing required changes to the DRLP prior to formal adoption of the final document in early February 2011 and will make the judgement regarding the S106 policy within the report.

56. Publication of the GLA Implementation Plan detailing how the infrastructure requirements and objectives of the London Plan will be delivered has been delayed until the Summer of 2011 to allow for detailed discussion with relevant stakeholders. This document will relate to infrastructure required beyond a borough level and represents a useful opportunity to highlight future provision of Custody/Patrol and Pan London facilities where required. Early liaison with the GLA in this regard has commenced and further discussion is recommended to highlight relevant estate strategy requirements. The amended London Plan is expected to be adopted as formal policy in Autumn 2011.

The Localism Bill

57. The Localism Bill was published on 13 December 2010 and is currently being scrutinised before passing through subsequent stages of enactment. The Bill covers a broad spectrum of local government, however the principal 'town planning' aspects are as follows:

58. Further clarification on Community Infrastructure Levy (see next section) is provided. It requires some of the funds collected to be passed to neighbourhoods where the development has taken place; confirms that tariff contributions can be spent on initial and revenue costs of infrastructure; and gives powers to local authorities to amend draft charging schedules when an independent inspector notes this would be unviable. It is thus essential to ensure the policing justification for inclusion in the schedule is robust.

59. The abolition of regional strategies is confirmed which will remove targets for house building in particular. However, the abolition does not affect the London Plan and subsequent replacements remain part of the statutory development plan within London.

60. The introduction of Neighbourhood Plans will strengthen neighbourhood consultation/interaction within the development process. The production of a plan at local level will set out community aspirations and allow certain developments to be permitted without the benefit of planning permission. Such plans may also provide a forum to promote local policing needs.

61. Devolution of executive powers regarding housing investment from the Homes and Communities Agency to the GLA is advocated and the London Development Agency will be abolished, with its regeneration and management of European funding roles to additionally be transferred to the GLA.

62. The streamlining of the Mayor's powers to determine planning applications will occur, ensuring that boroughs are responsible for the majority of development decisions and new powers for the Mayor of London to create Mayoral Development Corporations will focus regeneration where it’s needed most. Plans to transfer the Olympic Park Legacy Company into a Mayoral Development Corporation have been confirmed and we are awaiting details of which other areas or QUANGOs could be transferred into the MDC’s control. Once the Localism Bill is in place, the Mayor and the boroughs will work out how it operates.

63. The introduction of a 'community right to buy' remains under consultation and will allow the identification of community assets and the opportunity for interest groups to purchase a relevant asset when placed upon the open market. A 'window of opportunity' for community groups to express an interest would be identified, with a further window to allow a viable bid for an asset. Thereafter the combined period is known as the 'Protected Period' consisting of 18 months from the date the owner notifies the local authority of their intention to sell. This specific detail of the draft legislation is published for consultation until 3 May 2011.

Community Infrastructure Levy

64. The GLA has published its 'Charging Schedule' which proposes a tariff on all new developments for contributions towards Crossrail. Once approved, developments will be subject to the tariff of between £20-£50per sqm of net additional floor space. The Charging Schedule is published for comment until 1 March 2011.

65. The CIL Regulations prevent any alternative form of infrastructure (e.g. Policing) from being funded through the GLA CIL. This will be done through the schedules drafted by each London Borough. LB Redbridge is currently in the process of drafting their schedule and is the first LB to do so. The table shown in Appendix 5 details the dates when LBs have advised they will be consulting on their CIL Charging Schedules; Appendix 6 provides a more detailed explanation of CIL.

66. The Borough Charging Schedules are required to take account of the existing GLA CIL, thus the scope for future financial contributions requested at borough level may be restricted on viability grounds. It is therefore essential that policing is represented within relevant Borough CIL schedules to ensure financial contributions mitigating the impact upon policing can be collected as a priority, as the traditional S106 process is being scaled back. Essentially, organisations that do not have sufficient justification for inclusion in the charging schedule will be prejudiced.

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 1 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. This is an information update report, therefore there are no direct legal implications arising.

6. Decisions relating to individual property matters will be required to be made in accordance with the provisions under the relevant statutory provisions, and in accordance with the internal governance procedures set out in the MPA standing orders.

7. Legal advice can be obtained from DLS in relation to individual property transactions or specific property related issues, as and when they arise.

Environmental Implications

8. 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, and are assessed as part of individual business cases and contracts board papers. Property Services continue to 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 (including Health and Safety) Implications

9. Following the Police Federation submitting various allegations to the HSE concerning MPS non compliance with statutory duty and inadequate management of FMS contractors, a meeting was held with HSE on the 26 November 2010. Following this meeting the various issues identified have been subject to a comprehensive review and investigation of processes, procedures and management responsibilities relating to MPS Statutory Inspection (SI’s) process, control of contractors and achieving legal compliance. Areas for improvement and increased efficiency have been highlighted and these items have either been appropriately addressed or are being progressed.

10. A detailed letter of response was forwarded to HSE by the Head of Compliance on the 26 January 2011. HSE acknowledged receipt of the correspondence and their formal response is expected shortly.

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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