Lease of supplementary accommodation for recruit training at Hendon

Report: 19
Date: 19 July 2001
By: Commissioner

Summary

Supplementary residential accommodation is required at Hendon for increased intake of recruits. It is proposed to rent accommodation from the Ministry of Defence agents in accordance with the Committee’s decision on 20 March 2001 (item 106).

This report seeks approval to enter into a lease agreement.

A. Recommendation

Members are asked to agree that a lease be entered into with MoD agents, Annington Property Limited, for the hire of residential properties at Mill Hill to provide essential additional residential accommodation for recruits at Hendon. The estimated cost for the current year totals £1,413,000. To be funded from MPA contingency funds.

B. Supporting information

1. An investment appraisal on the residential accommodation at Hendon was submitted to the Finance Planning and Best Value Committee at its meeting on 20 March 2001. Several options were put forward to address short term needs and it was resolved that Option 2 be pursued.

2. Option 2 proposed that a temporary lease of ex MoD residential accommodation currently available at the adjacent Mill Hill site be pursued. In endorsing Option 2, members requested a further paper on funding.

3. The number of properties required would be variable across the five year programme and the nature of the accommodation at Mill Hill and the proposed leasing arrangements allowed flexibility. The annual cost including rent, community charge, energy, cleaning and security for 364 units (averaged over 5 years and peaking at 566 additional bedrooms to allow for residential tower block refurbishment) was estimated to be £1m. An initial cost of £600,0000 was identified for preparation and fitting out of units in the first year. In addition, an estimated cost of £400,000 per annum will be required for transportation between Hendon and the Mill Hill accommodation.

4. A subsequent adjustment to recruit intake numbers to meet the MPS objective (endorsed by MPS Management Board June 2001) has caused Hendon to revise their accommodation needs. The initial requirement for provision of additional bedrooms has risen from 225 by the end of financial year 2001/02 to 243 by the end of 2001. (At which point a further review on the recruitment drive will be undertaken and the requirements for further units established for 2002/03).

C. Financial implications

1. The effect of this change confirms an initial fit out and furnishing cost of £600,000. The first part year costs for rent, council tax, water rates, and maintenance including security and cleaning are estimated at £512,825 and transport charges are estimated at £300,000. All costs to be incurred this financial year.

2. The full year lease rental costs for the 243 bedrooms is £500,055 plus £264,000 for maintenance, security, cleaning, water rates and council tax. Full year transport is costed at £400,000.

3. If the recruitment drive is successful in the early stages, it is not anticipated that the average demand over 5 years for 364 units will change and therefore the average estimated annual cost of £1million is expected to remain.

4. Recruitment remains a critical objective of the MPS and the provision of suitable accommodation for recruits during training is key to its success. It is suggested that the importance of this provision justifies a request for use of MPA contingency funds in the first part-year of provision. Full allowance will be included in the budgets for future years. The Treasurer advises that following consideration of the review of budget priorities at the last meeting, it as decided that no new commitments should be entered into, particularly those that would commit the contingency provision.

D. Background papers

None.

Consultation

This paper has the support of the Directors of Finance and Personnel and the Recruit Training School at Hendon.

E. Contact details

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

For information contact:

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

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