Estates update paper

Report: 13
Date: 15 December 2011
By: Director of Resources on behalf of the Commissioner

Linked to exempt item 24

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 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 22 September 2011.

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.

4. Matters relating to the Corporate Real Estate Change Programme, acquisitions, disposals, redevelopment proposals are all discussed and reviewed by the MPA Estate Panel. Chaired by Graham Speed an MPA Independent Member, the panel includes representatives from the MPA members, officers and MPS. Work includes site inspections and supporting key commercial negotiations including those with BAA / HAL.

Market Overview

Residential

5. With continuing pressures in the Eurozone, demand remains subdued, whilst supply is manageable due to lack of development. Tenant default rates have not spiralled as feared. The UK is now regarded as a safe haven by bond and currency investors.

6. IPD capital growth figures remain positive (0.08%); due to the Offices and Industrial sector. The rental growth index hit zero. Central London take-up rose in Q3 2011 to 3.2 million sq ft, 40% higher than the previous quarter and back above long-term averages.

7. Central London investment turnover fell to £2.0 Billion in Q3 2011, 25% below the previous quarter and 19% below the long-term average. Transaction volumes remained stable but transaction sizes were smaller. This reflects a marked lack of stock rather than anything else. Central London offices are continuing to attract investors regarding it as a ‘safe haven’ against historically low gilt yields. Overseas investors still account for a large share of turnover given the economic uncertainty elsewhere but there has been increased demand from domestic investors.

London Residential

8. UK house prices rose by 1.2% in October - but were down 0.3% on the quarter and 1.8% on the year.

9. Prime central London prices rose by 0.7% in October. Prices are now up 12.5% higher year on year and 38.5% higher than March 2009.

10. Expectations for average house price growth in the UK over the next year turned negative in October, according to the Knight Frank/ Markit House Price Sentiment Index. Knight Frank predict that prime London prices will continue to rise by 5% in 2012 reflecting its status as a safe haven for domestic and overseas buyers.

Commercial Property Market

Corporate Real Estate Change Programme

11. The Programme, to rationalise the estate, improve the use of existing facilities and exit those properties no longer required for policing needs continues.

12. The Corporate Real Estate Major Change Programme is tasked to deliver £15.067m revenue reduction in 2011/12; £30.887m in 2012/13, and £36.887m in 2013/14.

13. Focussing on improving the use of buildings core to operational need, maximising economies of scale through the co-location of facilities / services, the programme will enable a substantial number of buildings to be released at the point of lease expiry (where these are held on a leasehold basis), or for sale (where these are freehold owned; providing capital of £40n per annum in support of the MPS Capital Investment Programme.

14. The programme is inextricably linked to a number of other change programmes including Leadership and Learning and Catering; and is wholly dependent on others including TP Development; SCD realignment. Significant progress has been made in existing 19 buildings in 2011/12 including TPHQ, Farrow and Tintagel House. In addition, investment into key buildings that will form part of the core estate for the future include Barking and Dagenham Patrol and Custody base, Heathrow Polar Park (Custody and Patrol Base), works underway include the redevelopment of Wandsworth Police Station; the development of the Croydon Custody Centre, the refurbishment of Jubilee House and development of the Wood Green Custody Centre.

15. The team are currently finalising the 2012 / 2013 plan with Business Change leaders. These proposals will be presented to Management Board in the Autumn, prior to submission to the MPA Estates Panel and MPA Finance & Resources Committee.

Training and Development

16. As previously reported, the practical completion (build, M&E and furniture) of Sovereign Gate, the south-west Regional Learning Centre, is scheduled for the end of November 2011. This will be followed by a DoI fit-out for training, which is expected to take six weeks during November and December 2011 to allow training at Sovereign Gate to commence in January 2012.

17. Detailed design at Marlowe House, the south-east Regional Learning Centre, is complete, and works commenced on site in November 2011. The practical completion (build, M&E, furniture etc) of Marlowe is expected to be April 2012. It will be followed by a DoI fit-out for training, with a go live date of May 2012.

18. Proposals in regard to facilities at Hendon are included under the Hendon Implementation Plan - a separate paper is being presented to this Committee under a separate agenda.

Office Accommodation

19. Empress State Building - Moves of DPS teams from Jubilee House and Ilford are now complete; occupancy levels are being reviewed to ensure use of space meets corporate standards throughout the building. Further teams are expected to move into ESB in early 2012.

20. New Scotland Yard - Lift maintenance works continue and the target contract completion date remains 30 March 2012. Essential mechanical and electrical works are underway; works to the 19th floor commence in September and further works to 14th floor commenced in January.

Custody Centres

21. Proposals to extend existing Custody facilities and to refresh office areas at Brixton; Colindale; Kingston and Walworth are subject to a separate paper being presented to this Committee.

22. London Borough of Haringey have approved the town planning application in regard to the proposals to develop a 40 cell Custody facility at Wood Green, Haringey. The decision was made on 14 November following the rescheduling of the application by London Borough of Haringey.

23. Croydon Custody works continue on site in accordance with project delivery dates. The facility will be operational in April 2012.

24. Construction of the Wandsworth Custody facility continues in accordance with project delivery dates. The facility will be operational in June 2012. A temporary front counter facility has been provided and an application for Town Planning consent has been made to secure a permanent facility.

Refresh/Refurbishment schemes

25. Detailed design is now underway in regard to Jubilee House. Works are anticipated to commence in Spring 2012.

26. Further opportunities are being explored in regard to Marlowe House and works continue at NSY.

Hendon Programme

27. Proposals in regard to Hendon are subject to a separate paper to this Committee.

28. The demolition of the Swim / Gym is complete and buildings 37 / 38 have now been vacated.

Warehousing/Deployment Facilities

29. Detailed design is now underway in regard to the redevelopment of the existing traffic garage at Alperton.

Safer Neighbourhoods

30. Working with TP and DoI, PSD continue to review the requirements in regard to SN bases in particular in regard to the design requirements for future sites, and the provision of security. A further seven sites are proposed.

31. Opportunities to co-locate/share with other Local and Central Government facilities continue.

Disposals

32. A summary of the present position for 2011/12 disposal plan is attached at Exempt Appendix 1.

Acquisitions

33. PSD continue to pursue opportunities to provide replacement front counter facilities for older, larger police stations. A number of these replacement facilities will be in London Borough Council buildings, to enable the MPA to dispose of certain properties. In particular, proposals have been identified for Barking and Orpington in partnership with both Barking and Dagenham and Bromley Councils (respectively), to provide accommodation for SN teams which could co-habit with public access requirements as necessary.

34. Opportunities to provide replacement facilities for the existing Vehicle Recovery Examination service facility at Charlton, are subject to a separate report being presented to this Committee.

Imber Court Sports Club

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

Forensic Science Service Ltd

36. An update on the progress of the arrangements between the MPA, Forensic Science Service Ltd and the Home Office (Guarantor to the lease) is attached at Exempt Appendix 3.

Delivery of Property Services Change Programme

Third Party Contracts

37. PFI Contracts - Operationally the contracts continue to perform well with positive feedback from the local teams. Opportunities to improve value for money are dependent upon a number of ongoing initiatives.

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

39. The Facilities Management team continues to work with MPIC and the FM suppliers targeting savings through efficiencies; scoping reductions and alternative ways of working; and reviewing resource allocation. Estimated potential savings to April 2014 has increased from £29.3m to £36.5m.

40. As part of contract management Property Services are finalising a Deed of Variation with the North Supplier which is reviewing contract margin and differential inflation. Commercial discussions with the South Supplier have concluded and volumetric calculations for service changes will now be undertaken monthly as oppose to quarterly.

41. Over the previous reporting period the MPS were advised that WS Atkins Plc were in discussions with Sodexo Ltd over a Change in Control of Atkins Facilities Management Limited (providers of MPIC). Through MPS legal framework a binding non-disclosure agreement was prepared and executed between WS Atkins, Sodexo and MPA. It is anticipated that the Change in Control will take place end November. A Deed of Variation is being prepared to ensure Sodexo Parent Company Guarantee matches existing guarantee provided by WS Atkins.

42. Property Services, in conjunction with Wagstaff, have taken advantage of an innovative solution for the re-use of unwanted furniture. Waste to Wonder has a target to fully equip 1000 schools and change the lives of one million children around the world. The MPS donated 32 meeting room chairs, 60 stacking chairs and 159 small tables. All of the furniture was shipped to Saint Lucia where the Alive Christian Ministry Church and the Air Training Corp were the grateful recipients as severe droughts and one of the worst hurricanes in the history of the island have devastated the country. By stopping the furniture being recycled or sent to landfill, the revenue cost of disposal has been saved by making the donation to the very worthwhile cause. Property Services are the process of developing a solution with Waste to Wonder to support charities within London boroughs.

Corporate Social Responsibility Strategy

43. The Service’s first Corporate Social Responsibility (CSR) Report for 2010/11 was presented to Management Board in October 2011. The report details progress against the MPS Corporate Social Responsibility Strategy 2010-13. The report provides a complete picture of MPS performance on four priorities; Our Services and Engagement with Communities, Our People, Our Environment & Our Organisation. Following discussion by management board members it was agreed there would be a new title for the report to align it more closely with the Policing Plan and broaden its appeal to a wider group of MPS stakeholders and operational colleagues. The ‘How we Police Report has been published on the MPS website www.met.police.uk/about/howwepolice/ and is available in accessible and alternative language formats.

44. The delivery of the Corporate Social Responsibility strategy and production of the How we Police Report will be carried out by the DoR Business Improvement & Risk department going forwards, fully integrating delivery within corporate business planning and reporting processes. Property Services will continue to play a key role delivering on improving the sustainability and efficiency of the estate, reducing carbon emissions and minimising waste. A key tool for delivering this will be through the implementation of the recently revised MPS Sustainable Design Guidelines which ensures that sustainable design features are considered at each stage of a construction project.

Climate Change Action Plan Programme

45. The last Estate update reported on the MPS’s CRC Energy Efficiency scheme submission to the Environment Agency at the end of July 2011. This indicated that the MPS would be liable for a ‘carbon tax’ of £1.43m payable in April 2012. Since then, the CRC performance league table was published in early November and ranks the performance of all qualifying organizations. The MPS was situated just above midway in the table. In the first year of the CRC, what are referred to as ‘Early Action Metrics’ (EAMs) account for 100% of the CRC league table scoring (maximums of 50% for achieving Carbon Trust Standard and 50% for voluntary Automatic Meter Read coverage, respectively). The main factor preventing the MPS from achieving a higher league table position was the lack of Carbon Trust Standard. Future decisions on achieving Carbon Trust Standard will need to be balanced against the decrease in the relative importance of EAMs in subsequent years as the growth metric is introduced.

46. Since the previous Estate Update, a further 17 Climate Change Action Plan (CCAP) programme retrofit projects have been identified such that the annual carbon emissions reduction potential of all projects, once successfully delivered, will be increased from 840 to a total of 2,077 tonnes CO2. The sum of all projects equates to reducing energy demand by just over 2.5 million kWh / annum, reduction of utility costs by £570,000, and avoiding CRC Energy Efficiency Scheme costs of about £25,000 (based on a carbon price of £12/tonne). The delivery of projects is currently on track.

47. The GLA has launched the London Energy Efficiency Fund (LEEF) to provide support for public sector energy retrofit projects. The MPS is currently investigating the opportunity to take advantage of this fund. Qualifying projects can achieve savings through access to loans at lower rates of interest than is usually possible. Qualifying projects are likely to include those under the major refurbishment and CCAP programmes.

Legislative Issues

Police Reform and Social Responsibility Act

48. The MPS continues to work with the MPA to agree the MOPC scheme of consent and Governance arrangements that will be effective from 16 January 2012.

Residential Estate and Human Rights Legislation

49. The court hearing for the one remaining case where an officer is claiming Human Rights legislation in support of his defence to remain in MPS accommodation has been rescheduled from November until the first available date after January to enable the MPS to review the amended defence submitted at the court hearing in November.

50. MPA Counsel is reviewing and preparing the MPA’s position in readiness for the revised court date.

The Localism Act

51. The Localism Act received Royal Assent on 15th November 2011 and sets out a statutory basis for wide-ranging reform of local government. This includes a number of measures relevant to town planning.

• At the heart of the Act is the concept of neighbourhood planning – giving plan-making powers to the community level for the first time, and inviting involvement by local people in the approval of certain types of development through neighbourhood development orders and community right to build orders. Any Neighbourhood Plans must reflect existing local development plan policy and new plans would be ratified by the Council.
• The regional tier of planning is to be abolished, with Local Enterprise Partnerships and a new duty to cooperate set to take its place. Significantly, this will remove the ‘County’ level housing targets (outside London) with individual Councils required to determine housing need locally.
• New pre-application consultation rules are to require greater contact with communities before the submission of applications for large schemes, whilst constraints on the involvement of councillors who have an interest in individual planning applications and determination are to be relaxed by new laws on predetermination.
• Measures such as the right to buy assets of community value and the community right to challenge will allow local groups to delay the sale of some local land and buildings and to trigger and participate in tendering processes for valuable local services, respectively.
• Financial considerations such as the New Homes Bonus are to become statutorily-designated material considerations in decision-making for the first time.
• The existing arrangements for the Community Infrastructure Levy are to be the subject of minor amendments, including relaxation to the rules governing the purposes for which collected funds may be used.
• Councils will be given additional powers to combat unlawful development that has been deliberately concealed, through new enforcement measures.
• The Infrastructure Planning Commission, currently responsible for determining applications for nationally significant infrastructure projects, is to be incorporated within the Planning Inspectorate as the Major Infrastructure Planning Unit, with the Secretary of State being handed the final say on such proposals. Number of National Policy Statements will be drafted and formalised in Parliament (House of Commons only) which will detail policy guidance on a ‘topic’ basis.

52. The proposals highlighted above require secondary legislation before they are fully in force, likely by April 2012. In the meantime, the proposed legislative changes will be a ‘material consideration’ when determining planning applications and drafting emerging planning policy. The desired impact is to allow greater public participation and accountability in the planning process, however the Coalition Government have also expressed a desire to streamline the planning process through the creation of the National Planning Policy Framework (NPPF) referred to above. It remains to be seen how the joint objectives of the Localism Act and the NPPF can be comfortably achieved in tandem.

Town Planning Update

The London Plan

53. The GLA have published draft minor alterations to the London Plan (Adopted July 2011). The ‘Early Minor Alterations’ respond to recent changes in Government policy and comprise: -

54. Reference to National Planning Policy Framework - giving advice about the status of the Plan following publication of the Framework and explaining that the Mayor will make any necessary changes to the Plan once the final NPPF is published;

55. Changes to the affordable housing policy. In particular, an alteration to the definition of affordable housing to include the new ‘affordable rent’ tenure;

56. Changes to reflect updated cycle parking standards, following a review carried out by Transport for London.

National Planning Policy Framework (NPPF)

57. The NPPF sets out government-level policy advice which will eventually replace the existing detailed documentation. The NPPF will be supported by a number of additional guidance documents which will be formulated after adoption of the principal document. The consultation process has closed and the government have indicated publication of the final document is forthcoming (before end 2011) and will not materially alter, despite the detailed comments received in response to the consultation.

58. The draft provides some useful detail regarding Policing/Security matters and in relation to the delivery of policing infrastructure the following are relevant:-

• A key requirement is the need to provide accessible local services that reflect a community’s needs;
• A strategic priority includes a requirement to deliver the provision of security and community infrastructure. This provides a platform to ensure policing facilities are provided where development would impact upon existing provision;
• The planning system should deliver the right community facilities to meet local needs – the London Plan definition of community facilities includes ‘Policing’;
• A key objective is to ensure planning policies and application decisions should promote safe and accessible environments where crime and disorder, and the fear of crime, do not undermine the quality of life. This provides positive support for planning policy and decisions to reflect policing need;
• Regarding the delivery of community facilities it is noted that planning policies and decisions should ensure that facilities are able to develop and modernise in a sustainable manner.

Earls Court – Major Redevelopment Proposals

59. Developer Capital and Counties (CapCo) have submitted two planning applications for large-scale redevelopment of the Earls Court area, including renewal of two large-scale housing estates and a total of circa 7,000 dwellings. The applications are submitted in ‘Outline’ format with detailed design reserved for determination at a later date. The application site encompasses the Empress States Building (ESB) and surrounding car parking and ancillary buildings. Negotiations on behalf of the MPS are on-going in two particular areas: (a) at a commercial level between the developer, the MPS and the part-freeholder of ESB and (b) through detailed planning policy representations seeking to highlight the role of the MPS at ESB and the basis for retention of the policing use.

60. The planning application proposes the retention of ESB, however representations have been submitted detailing the supportive planning policy framework to ensure the development impact upon policing is mitigated. The MPS are engaging in regular meetings with Capco and have also discussed the development impact with the Local Planning Authority. Negotiations in respect of the S106 to secure contributions towards borough policing are also continuing.

61. The developer has indicated that a formal revision to the application will be submitted at the end of November 2011. This will be reviewed in order to determine whether any further representations are required on behalf of the MPS.

Business Rates

2005 Rating List

62. No additional appeals have been settled since the last update therefore the number of appeals successfully settled remains at 212 and in turn the total savings from the rating list remains at £10.65m. It is anticipated that the remaining appeals will be concluded by April 2012, with the NSY appeal expected to remain outstanding, and settled in the spring of 2012.

2010 Rating List

63. Rating consultants Lambert Smith Hampton (LSH) continue negotiation work on the first phase of the appeal strategy. Of the 130 appeals submitted, eight have been settled generating £968,500 of savings. Further appeals have been targeted for negotiation over the next three months by the Valuation Office.

64. Business rates from 2013 could be localised under current proposals being made by Central Government. It is proposed that local authorities will be given greater financial freedom which could attract businesses and create employment. The current system raises approximately £19bn, which is pooled by Whitehall and redistributed using grants - a stable but bureaucratic system. The proposed idea will in principle create a less bureaucratic system but the likely impact to the MPA/MPS is unknown at this time.

Olympics

65. The principle accommodation being provided within the MPA Estate at NSY and other locations is complete.

66. The Legislative Reform Order (LRO) required to amend the Epping Forest Act of 1878 and allow the provision of the Wanstead Flats Muster Brief and Deployment Centre (MBDC) passed successfully through both Houses and came into effect on the 1st August 2011. A legal challenge via a Judicial Review was launched at the end of July. The Home Office is leading on the defence of the LRO process supported by the MPS (as is the main beneficiary). The hearing date has previously been set for 5th and 6th December 2011 but has been challenged by the claimant.

67. The impact of travel disruption on access to buildings is being assessed and mapped against the MPS Estate, Olympic Venues, travel Hubs and Route Networks in order to establish the impacts on our business activities. Workshops continue as part of the broader Business Continuity arrangements.

Operational Support

68. Demand for Operational Support remained high including support to a number of large pre planned events, including the National Service of Remembrance at the Cenotaph in Whitehall, attended by HM Queen, the Government and shadow Government leaders. OSG also supported the State Visit of the President of the Republic of Turkey on the 22nd November, and Support to un-planned events including the disturbances in August continues.

69. OSG continues to provide temporary search, crime reporting and custody facilities in support of Operation Fallon - a highly successful search operation designed to reduce serious violence, disorder and crime.

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 approved within the 2011-2014 Business Plan.

4. Any financial implications in regard to the items included within this report, will be subject to the normal MPA/MPS approval and planning processes.

Legal Implications

5. There are various legal issues which are already set out in the body report.

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, and moving forwards the MOPC under the Police Reform & Social Responsibility Act 2011.

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

8. The terms of reference for this committee allow Members to consider and determine issues in respect of the MPA estate and other resource, therefore Members may approve the recommendations set out in Part A.

Environmental Implications

9. Any environmental implications are referenced under the section of the report entitled Corporate Social Responsibility. Please see above.

Risk (including Health and Safety) Implications

HSE Contact

10. Assistant Directors from Property Services Compliance and FM convened a meeting with HSE on 12th October 2011 to confirm that MPS have appropriately addressed areas of concern in respect of a Police Federation complaint relating to inadequate statutory inspection procedures. HSE were advised of the improved inspection and audit procedures and the inspector carried out various spot checks to confirm that the procedures had been implemented and performing their intended function. HSE concluded that they were satisfied with MPS actions to resolve the Police Federation concerns and advised that they have now closed their file relating to this matter and no further action will be taken.

11. Further to DoR attendance at the Corporate Manslaughter Homicide steering group meeting chaired by Commander Steve Bloomfield, the overall action placed upon each directorate is to confirm that respective polices, procedures, SOP's, standards, specifications, training and record keeping are fit for purpose. It was stated that this is an opportunity for all parties to review and refresh items as necessary.

12. PSD have formed a working group chaired by the Director of Resilience, Compliance and Operational Support, last meeting held on the 10th November 2011 with a further meeting being scheduled for January 2012. The group will provide the necessary confirmation back to the corporate steering group and implement any required actions to achieve compliance.

List of Abbreviations

• ACPO - Association of Chief Police Officers
• BBW - Balfour Beatty Workplace
• BOCU - Borough Operational Command Unit
• CCAP - Climate Change Action Plan
• CIL - Community Infrastructure Levy
• CLG - Communities and Local Government
• CPS - Crown Prosecution Service
• CRC - Carbon Reduction Commitment
• CRE - Corporate Real Estate
• CSR - Corporate Social Responsibility
• DDO - Designated Detention Officers
• DoI - Directorate of Information
• DoR - Directorate of Resources
• ESB - Environment and Sustainability Board
• FM - Facilities Management
• FMS - Facilities Management Suppliers (from 2007)
• F&R - Finance and Resources
• GLA - Greater London Authority
• HMI - Her Majesty’s Inspector
• IFM - Interserve Facilities Management
• IPD - Investment Property Databank
• LSH - Lambert Smith Hampton
• MBDC - Muster Briefing and Deployments Centres
• M&E - Mechanical and Electrical
• MPA - Metropolitan Police Authority
• MPIC - - Met Property Information Centre
• MPS - Metropolitan Police Service
• NPPF - - National Planning Policy Framework
• NSY - New Scotland Yard
• OSCM - - MPS Olympic Strategic Coordination Committee
• OSG - Operational Support Group
• PFI - Private Finance Initiative
• PfP - Property for Police
• PS - Police Station
• PSD - Property Services Department
• RICS - Royal Institute of Chartered Surveyors
• RLC - Regional Learning Centre
• SIP - Service Improvement Programme
• SMP - Sustainability Management Plan
• SN - Safer Neighbourhoods
• TP - Territorial Police
• VRES - - Vehicle Recovery and Examination Service

D. Background papers

• None.

E. Contact details

Report authors:  Jane Bond, Director Property Services

For more information contact:

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

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