Land and buildings programme 2001/02: Report on the progress of capital building projects - second quarterly update

Report: 9
Date: 19 November 2001
By: Commissioner

Summary

This report is the second quarterly report summarising progress and changes to the programme of Capital Building Works. It was reviewed and accepted by MPS Resource Allocation Committee at their meeting on 16 October 2001. It has subsequently been updated to reflect the financial position current at 9 November 2001. Appendix 1 (see Supporting material) has been expanded to include a breakdown between fees and works costs.

A. Recommendations

1. Members are asked to note the recorded changes; and
2. to recommend to FP&BV the inclusion in the programme of the projects requested at paragraphs 36 & 37, subject to receipt in due course of satisfactory business cases.

B. Supporting information

Background

1. At its meeting on 22 April 1998 the Strategic Co-ordination Forum (SCF) agreed a system for reporting on changes to the Capital Building Programme in July, October, January and April each year. At its meeting on 9 August 2000 the Resource Allocation Committee (RAC) agreed to maintain the current process. The report forms the basis of this quarterly report to the Estates Sub Committee, which requires a progress report on all capital projects over £500,000 in value.

2. The report highlights proposed changes in all new projects (beyond feasibility stage) and site acquisitions, which are referred for confirmation or decision.

3. Changes requiring an urgent decision outside the committee cycle are delegated to the Deputy Commissioner, the Director of Resources and where appropriate, the head of the relevant Business Group, the decision being reported to the next RAC & MPA Committee.

4. The funding requirement for the Land & Building Capital programme for 2001/2002 was notified in RAC Paper No. 2001 (73), the MPA agreed a budget of £28.7m (including Vehicle, Parts and Equipment (VPE)) inclusive of slippage of £5.06m (15%).

5. The slippage factor represents an over subscription of the programme to ensure that delays to project programmes do not produce an underspend. The slippage factor is reduced each quarter, as the programmes become firmer during the year. However early in each year the slippage factor is reviewed and this year was reduced to 12.5% to reflect a more optimistic view of delays to programmes.

Report for second quarter 2001/02

6. The slippage factor has been further reduced to 6.25%, as we are now halfway through the financial year. The format of Appendix 1 (see Supporting material) (updated programme) has been amended in order to reflect the requirement to report fees on a project basis and is attached together with a copy of the programme issued at the beginning of the financial year at Appendix 2 (see Supporting material).

• Capital Allocation 2001/02 Original (incl. VPE): £28.7m
• Capital Allocation 2001/02 Revised (incl. VPE): £30.025m
• Capital Programme 2001/02 Current Forecast (incl. slippage): £29.899

Consultant fees

7. Where known, actual fees have been included against the project. For future projects an allowance of 11% has been forecast, this is consistent with the report for the first quarter where it was reported that the percentage for consultant fees had reduced from 15%. This figure will be subject to regular reviews.

Completion dates

8. Completion dates for the major projects currently on site are:

9. It can be seen that some major projects are completing ahead of schedule. Whilst this is welcome, it is having a significant effect on cash flow with payments on these projects exceeding the beginning of the year forecast. The consequence of this is that it has become necessary to delay the start on site of the following projects, which have not been contractually committed, to contain capital expenditure within the allocation:

• Belvedere cell conversion
• Paddington Green Plant Enc.
• Plumstead cell extension
• Finchley PS – Refurbishment for SO8
• Rainham Sector Base fit out

Significant developments in last quarter

10. Since the last report in July two projects have been approved by the MPA, namely Harrow - Chartergate House and Lambeth - Otis House;

11. Finance Department has increased the funding for 2001/02 following MPA approval for three additional projects, namely Mill Hill Halls of Residence, Rowan Drive Hostel Accommodation and Tintagel House: the latter increase is to fund consultants' fees for this financial year.

12. This means that maximum capital expenditure on land and buildings has risen to £30.025m (including Property Services Department minor vehicle plant and equipment element).

Final accounts

Hammersmith PS

13. The account for the Hammersmith police station (1996) has been settled. During the negotiations the contractor went into Receivership. The company was acquired by Alchemy who have taken the negotiations forward and have finally produced sufficient information in support of their claim for loss and expense to enable the consultants to agree a final payment in the sum of £573k. This is split 70% capital and 30% revenue. Because of timing uncertainty, no allowance had been made in the capital allocation. Adjusting the start dates of projects has absorbed the consequential carry over of expenditure into the next financial year.

Apex House DPG HQ

14.The final account for this scheme, which finished in 1997, has still to be settled. The contractor has made a further offer of £250k, which is being considered. If this proves to be acceptable, then provision will have to be made within the programme by reprioritisation of capital projects.

Acquisitions – changes

15. No acquisitions are planned for this year but opportunist purchases for police station sites for PFI programme may have to be funded.

Programme changes

Lambeth – A block refurbishment

16. The project has been removed from the programme following the decision to use Lambeth as the accommodation for C3i (value of reduction £175k).

Shepherds Bush PS – cladding and office refurbishment

17. This project has been reclassified as revenue and has therefore been removed from the capital programme (value of reduction £100k).

Kingston PS – front office

18. Project now includes revenue reducing the capital forecast from £242k to £162k.

Solicitors Department – office alterations

19. Project carried forward from 2000/01 due to protracted negotiations between consultant and contractor regarding Mechanical and Engineering rates and difficulties in obtaining security clearances. Project started on site 21.5.2001. The current year's expenditure requirement has been raised from £7k to £400k.

CIB transfer to Jubilee House

20. Works completed under Measured Term Contract (MTC), payment delayed due to a failure of Consultant Quantity Surveyor to agree the account in 2000/01 necessitating expenditure of £361k carried forward into 2001/02.

Front office refurbishment programme

21. The first phase of works to improve front offices, required under the Disability Discrimination Act, has been divided into four groups. The programme for Group 1, comprising Hillingdon PS, Hayes PS, Chiswick PS, Feltham PS and Wimbledon PS is awaiting approval of corporate standards. Start on site is now programmed for February 2002 which, as a consequence, will result in a nil spend for 2001/02 (value of reduction £660k).

Barking (Ripple Road)

22. Expenditure carried forward from 2000/01 due to project slippage, current year requirement now £109k.

Chingford additional cells

23. Delays incurred due to protracted negotiations regarding the best value tender, forecast for 2001/02 reduced from £721k to £595k as a result.

North East London Territorial Support Group HQ

24. Start delayed whilst best value tender was negotiated. It started on site in July 2001, which revised the expenditure forecast for 2001/02 from £1980k to £2020k. The cost of the strategic Fuel Depot has exceeded the provisional sum allowed in the contract by £47k. It is anticipated that the Home Office will reimburse these costs. Changes in management structure and responsibilities between occupying units, considered operationally essential, affect the agreed layouts. The amendments were implemented as soon as possible on site to minimise abortive/other costs (anticipated to be £60k) and delay to the works (anticipated to be 4 weeks).

Romford (Havering) custody suite alterations

25. The scope of the project was increased significantly to incorporate latest MPS standard cell and front office designs as a pilot scheme. In addition, unforeseen requirement for additional mechanical and electrical engineering works discovered following the removal of the existing services. These two factors have resulted in an extension of time with a subsequent increase in capital expenditure this financial year from £158k to £699k.

Stoke Newington PS and SH

26. The final account was not agreed as expected last financial year and therefore has been carried forward to 2001/02, current year requirement now £243k.

East Crime OCU HQ and Flying Squad

27. The partnering contract is making good progress and the anticipated slippage has not occurred with subsequent advance of expenditure to this financial year raising projected expenditure from £5500 to £6194k. A compensating decrease has therefore been included for 2002/03.

Additional classrooms at Hendon

28. Business case yet to be approved, budget forecast slipped to 2002/03.

West London Serious Crime Group HQ

29. Works progressing ahead of schedule with resulting increase in expenditure for 2001/02 from £3,300 to £4,297k. Compensating decreases forecast for following years.

Holborn PS alterations

30. Contract progressing ahead of schedule, additional payment made in 2000/01 and forecast for this financial year increasing projected expenditure from £3,300k to £3,346k. Payments for 2002/03 reduced accordingly.

Harrow – Northgate House

31. Anticipated final account for 2000/01 not received, therefore expenditure of £91k carried forward into this financial year.

Wembley PS & SH alterations

32. Start on site delayed due to protracted negotiations to agree a contract price. Contract started on site on 8 October 2001 but current year expenditure requirement now £1,683k reduced from £2,815k.

Relocation of DoI Technical Support

33. Project delayed due to concerns regarding security at the proposed property in Steadman Street, new brief awaited.

Major extension of offices and cells at Brixton

34. Project reprogrammed due to reduced capital allocation.

Major fit out of leased offices for Lambeth (Otis House)

35. Project now approved by MPA. No expenditure this financial year.

New projects

Barnes Green

36. A request has been received for the reprovision of the front office at this station. The current estimate of cost is £80k in 2002/03.

Alperton – NW Ops accommodation

37. A feasibility study is being undertaken to consider the cost implications of siting the accommodation for NW TSG at Alperton as opposed to the original site at Hendon. Provisional budget of £4,200k, start on site date planned for 2002/03. This scheme is to allow the sale of Finchley Traffic Garage to generate a substantial capital receipt.

PFI projects

Firearms and Public Order training centre

38. The contract for the Firearms and Public Order Training Facility was signed on 11 April 2001 and work has started on site. The first meeting of the Contract Board has also taken place.

South East London Police Stations

39. The contract signing took place on 25 October 2001. Demolition works have already started on one of the sites.

Hayes Repository

40. It is anticipated that contracts will be signed by Ministry of Defence in December 2002. MPS participation has yet to be decided and Department of Information is preparing a paper for MPA consideration.

Projects not in programme

C3i

42. Whilst the C3i programme is funded from a different budget the following start on site dates are for information:

• Hendon: June 2002
• Lambeth & Bow: October 2002

Section house refurbishment

43. No allowance has been made in next year's budget for the refurbishment of Maurice Drummond or Norman Kendall Section Houses. These are to be funded from the capital receipt from the sale of Trenchard Section House.

Locker rooms and showers

44. No allowance has been made for refurbishment of locker rooms and showers in operational buildings. Allocation of funding awaits the outcome of Operation Clean Sweep.

Tintagel House

45. The funding method for the refurbishment of Tintagel is still to be agreed. Any capital requirement will form part of the capital programme for 2002/03 and future years, to be submitted to the MPA as part of the budget approval process. Significant reprogramming of the projects in the future Capital programme will be necessary if the programme does not receive funding additional to the current projected allocation.

Capital receipts

46. Capital receipts are forecast to be £35m, following the resumption of the residential sales programme. This figure excludes Trenchard SH, the sale of which is due in 2002/03. A further revision might be required (in time for the next quarter) as a result of the uncertainties in the market.

Consultation

47. This report has been consulted on and endorsed by MPS Resource Allocation members at their October meeting.

Consideration of environmental impact

48. The Environmental aspects of property development are considered at every stage of the estate management process from acquisition and construction through operation and development and ultimately at disposal. Many of the practical environmental aspects of development are covered by the various Planning and Building Regulations and by the involvement within the process of organisations such as English Heritage and the Commission for Architecture and the Built Environment. More emphasis is being placed on aspects relating to Local Agenda 21 (LA21), which are consistent with the GLA's sustainability objectives. They include a commitment to continuously improving performance, assessing proposals against "The Building Research Establishment Environmental Assessment Method" (BREEAM 98) and by ensuring that all government initiatives in respect of Green Construction are incorporated within proposed schemes.

49. Where identified in advance, archaeologically sensitive sites will be developed so as to allow the Museum of London to conduct an agreed and programmed archaeological dig.

C. Financial implications

1. The consequence of the variations identified in paragraphs 10 to 37 and included in Appendix 1 (see Supporting material) is that the capital-funding requirement for the 2001/02 financial year, exclusive of site acquisitions for new police stations and vehicle, plant and equipment, is now £29.899m. This is slightly below the approved revised budget of £30.025m. However, this figure includes a slippage factor of £2.002m (see paragraph 6).

2. The programme is being managed to keep within this figure by adjusting the programmes of projects yet to start on site.

D. Background papers

• Appendices 1 and 2 (see Supporting material)

E. Contact details

The author of this report is Trevor Lawrence, Director, Property Services Department, MPS.

For information contact:

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

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