Update on approval for an MPA forensic service evaluation and monitoring unit

Report: 07
Linked to exempt item 14
Date: 24 January 2008
By: Director of Strategic Finance on behalf of the Commissioner

Summary

The acquisition and development of a specific property solution in Lambeth in support of an MPA Forensic Service Evaluation and Monitoring Unit (FSEMU) was approved by the MPA FC in July 2007.

This report seeks to update members on the progress that has been made to date in regard to that property solution.

A. Recommendations

That

1. members note the progress that has been in regard to the specific property solution in Lambeth and the outcome of the feasibility study in regard to this solution;

2. support the recommendation that the proposed solution is no longer feasible; and

3. note that searches will be undertaken to identify suitable property solutions for MPS Investment Board and the MPA to consider.

B. Supporting information

Background

1. The creation of the MPS Forensic Service Evaluation and Monitoring Unit (FSEMU) and the acquisition and development of a property solution in support of operational needs was approved by MPA FC in July 2007.

2. Within the approvals given, the Finance Committee delegated authority to the Chief Executive in consultation with the Treasurer of the Authority, and Director of Strategic Finance and Director of Property Services, to consider the financial implications of the proposed acquisition further and approve the acquisition of the property within the parameters outlined in this paper via the MPA urgency process, subject to the support of the MPA Estates Lead.

3. The business model on which the creation of the FSEMU is based is forecast to generate substantial efficiencies against existing revenue liabilities – this remains unchanged.

4. Although the provision of a property solution to this particular operational requirement was not one of the five priorities set within the Estate Strategic Plan, there was an opportunity to release space in Larkhall Lane and co-locate teams with the FSEMU, to assist in the development of a CO deployment base at Larkhall Lane. Rather unusually the property solution approved, within the decision made, related to a specific opportunity that had been identified within the London Borough of Lambeth.

5. Building on the work undertaken in July, further analysis of the FSEMU’s property requirements have been developed along with the needs of teams based at Larkhall Lane. There have also been further negotiations with the developer who has progressed with an extant scheme over the past four months. The results of the feasibilities undertaken have now concluded.

Base Property Deal

6. MPA consent given was based on the acquisition of a six-storey building with four floors to be fitted to Cat A Office standards and two floors to be finished to shell and core for subsequent fit out by the MPA as laboratories/plant. The developer was to obtain necessary town planning consent. The property related costs approved are detailed in exempt Appendix 1.

7. The developer advised in November that due their lack of resource to develop the scheme, the MPA could only acquire the property in its existing condition and with the extant town planning consent in place. Negotiations have continued with the developer to discuss the developer’s position, but their position remains unchanged.

8. If the MPS were to acquire on this basis, the MPS would either:

• Complete the existing building, deliver the CAT A and specialist fit out assuming all development risk, including planning risk, or
• Demolish the existing building, deliver the CAT A and specialist fit out assuming all development risk including full planning and development risk.

9. Property Services are not structured to undertake this style of project in house. Existing expertise is limited and the timeline to develop resource/procure necessary skills would take time and be costly as well as posing significant risk.

Outcome of Feasibility Studies

10. Building specific issues that have been raised as part of the feasibility studies include:

• Costs – the original MPA approval supported expenditure detailed in exempt appendix 1. As a result of the points notes above and the following comments, the total cost is estimated to exceed £50m;
• Concerns regarding fire exit routes along boundary lines and the impact of extant planning conditions in regard to external areas which could impact on the ability to secure the site to MPS requirements;
• The constraints that would be placed on the fit out due to the design of the building and the work-around and additional costs that would be required to accommodate laboratory and mechanical and electrical equipment are significant;
• More cost effective solutions could be achieved by sourcing alternative properties elsewhere in London.

General Points

11. In terms of operational provision, teams currently located at Larkhall Lane could not be accommodated within the proposed facility. The ability to release space at Larkhall Lane in support of a CO deployment base is hence no longer an option.

12. The current option was presented as an opportunity, no other options have been considered at this stage. SCD Forensics is supportive of the locale, but other locations within London, which could provide a base for suitable facilities, have not been considered.

Conclusion

13. As a result of the headline issues, Property Services conclude that this proposal does not deliver value for money and can not support the revised expenditure levels; a property solution within an office park/hi tech industrial estate would provide more suitable solutions to operational needs. The Director of Asset Management has discussed this with the Director of Forensics who accepts this position. These issues have also been discussed with MPA officers and the lead MPA members (Property and Forensics). On the basis that the previously proposed solution was no longer feasible, the developer has been advised that the MPA will not progress further discussions.

Next Steps

14. SCD Forensics will now confirm the parameters for the location of a future facility to enable Property Services to undertake suitable site searches. On receipt of this information, Property Services will procure the services of consultants to undertake necessary site searches and develop feasibility studies, to identify suitable property solutions for MPS Investment Board and the Finance Committee for approval at a later date.

C. Race and equality impact

There are no specific issues arising from this report.

D. Financial implications

Revenue Costs

1. Until a suitable property solution is identified for the FSEMU Unit and exiting forensic teams are co-located, achieving financial efficiencies will be challenging.

2. The costs relating to the feasibility studies and negotiations in regard to the freehold acquisition will be treated as revenue expenditure (aborted fees/costs). These costs will not exceed £55k as fees etc., were agreed on a fixed fee/time-charge basis.

E. Legal/procurement implications

There are no specific issues arising from this paper.

F. Background papers

• FC 19 July 2007 – Establishment of MPS Forensic Service Evaluation and Monitoring Unit (FSEMU)

G. 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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