Central London property plan

Report: 13
Date: 9 June 2003
By: Commissioner

Linked to exempt report 23 (exempt reports are not open to the public)

Summary

The impact of growth on the central London MPA estate has seen dramatic increases in occupation levels and there is now an urgent need to resolve the resulting gridlock, provide for more efficient use of space and to deliver solutions in a timely manner. The proposal for approval is to take a lease on a new building, which will speedily unlock a whole stream of other problems and options, as detailed in the linked exempt report, at an affordable cost.

A. Recommendation

That members agree the recommendations in the associated exempt report.

B. Supporting information

1. Growth in the central London occupancies of the MPS has been rapid and the estate has not been adjusted to cope on a compatible timetable. As a consequence standards are in rapid decline and best use of available space is not being made.

2. Past policy has tended to favour the emptying of existing buildings followed by refurbishment and then moving staff back in. This double move is expensive and time consuming. Given the increasing use of open plan space planning wherever possible and the use of modern commercial furniture, this approach is not always offering best value. The additional current weakness of the commercial office market also offers the MPA an opportunity to take on new space at lower capital cost (through landlords / developers funding fit out costs in full or part) and on more flexible terms. The use of open plan layouts also requires consideration of options that minimise the strip out and refit of existing / new space – it is essential to use new space to provide open plan environments and old space for modular office requirements – if best value is to be achieved.

3. An over arching problem is the need to move more swiftly to deliver against the pace of growth and to unlock ‘grid lock’ in certain key buildings. For the existing leasehold estate, swift execution also assists best value considerations.

4. The best solutions have to be deliverable rather than hypothetical and the current weak commercial property market allows the MPA an opportunity to execute a series of changes to minimise costs, deliver best value and ease occupation pressures at key high value locations. The plan is also to minimise the fit out costs and strip out / refit costs by matching space requirements across the users.

5. To achieve this solution a new property needs to be leased to start the process moving – hence the recommendation in the accompanying linked exempt report to take a new lease on office accommodation. The exempt report maps the thinking behind the key elements of the wider plan and lists other peripheral and advantageous aspects. It includes investment analysis (Net Present Values) of options, although some of these options may not be within affordability envelopes for the MPA. This rigorous testing is used to ensure best value for the MPA and shows that the solution is best regardless of affordability.

C. Equality and diversity implications

Broadly, there are no direct impacts although the move to more modern accommodation should improve upon the current situation.

D. Financial implications

The recommendations are based on the best value / affordability balance to meet the timescales and needs of the organisation within contractual frameworks / commitments. Costed options are contained in the exempt report. The capital spend is within the allocation approved by the Committee at the April meeting and the Revenue implications are within existing budgets (net).

E. Background papers

• Finance Committee 13 February 2003 -Strategic Review of Capital Programme
• Finance Committee 10 April 2003 - Realignment of Capital Programme - Land & Building

F. Contact details

Report author: Alan Croney, Director of Property Services, MPS.

For more information contact:

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

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