Estates update paper

Report: 10
Date: 21 February 2008
By: Director of Strategic Finance on behalf of the Commissioner

Summary

This report updates members on the latest information on Estate and Property Services matters as co-ordinated with wider MPS business groups.

A. Recommendations

Members are asked to:

1. Note the information provided in regard to current estate issues.

2. Approve the proposed increases in the residential rents levied against those officers who are charged for occupying MPA owned properties (as detailed in Paragraph 10).

B. Supporting information

Introduction

1. At the Finance Committee on 24 October 2002, it was agreed that a report on estates issues would be produced at alternate meetings. Source documents can be found on previous relevant reports and also in the Members’ Library.

Safer Neighbourhoods

2. Following Finance Committee approval in December, appointments for Stage 2 of the property programme have now been made for the key roles. Initial priorities have been established including the fit-out of properties already owned by the MPS, the addition of signage and cycle lockers to bases constructed under Stage 1 and the search for properties in locations prioritised by TP. TP have convened a steering group to formulate the governance procedures and initial meetings have been held.

3. A reporting protocol is being developed to enhance visibility of action as Stage 2 is implemented, and this will be consistent with Programme Management reporting on other MPS Property programmes. This report will be delivered to Estates Oversight Group on a 6 monthly basis.

Procurement Related Issues

4. Considerations to build and enhance procurement support to Property Services continue. A Programme Manager has been appointed by Procurement Services to lead on the change programme and develop a Property Procurement Strategy. Progress will be reported to Members in the coming months.

5. The Technical Services Framework tender exercise has been completed and a paper was submitted to Finance Committee on 24 January 2008 for approval. The target is for the new contracts to ‘go live’ on 1 April 2008.

Acquisitions and Disposals

6. A proposal to acquire a new building to replace the existing Heathrow Police Station was approved at the Co-Ordination and Policing Committee meeting on 10 January 2008. The lease should complete shortly. The disposals of 80, Parchmore Road and Old Deptford police station and 10 residential properties were completed in January generating £6.42m in receipts.

7. A lease in respect of two additional floors at Centre Tower, Croydon, for use as an IPLDP training facility, has been completed, the accommodation is undergoing fit out and will be ready for occupation in July 2008.

8. Schedules of Commercial and Residential disposals completed up to December 2007 are attached at exempt Appendix 1 and 2.

Residential Rent Review

9. The annual review of rents that the MPA charges on its residential properties is implemented in April each year. Members have previously resolved that increases in rents should reflect changes made by Registered Social Landlords (e.g. housing associations), and should be reported as part of the regular Estates Update paper.

10. A review of the MPA’s residential rents has been undertaken in conjunction with an analysis of rent data published by the Housing Corporation in December 2007. Based on the Housing Corporation data, Property Services recommend that the rental levels charged in regard to MPA residential rents should be increased from between 2.78% to 4.50%, depending upon the size of individual units. The average across the estate will be 3.79%.

11. Based on this recommendation the rent for a 3 bedroom unit, which comprises 73% of the total estate, will rise from £434.50 to £451.00 per month, and the section house service charge (rent) will rise by £14.50 per month to £399.00 (i.e. 3.70%).

12. Based on current occupation levels remaining unchanged, the rent increases are forecast to produce additional income totalling £65k in a full year. The attached Appendices 3 and 4 show the existing MPA Rent Schedule (April 2007) and the proposed Rent Schedule to be effective from April 2008.

Residential Estate Strategy Update

13. In line with approved MPA Residential Estate Strategy, Property Services continue to communicate with those individuals occupying residential properties owned by the MPA.

14. The opening up of the Property Zone function to all MPS colleagues has been welcomed by colleagues and commercial operators alike. Activity levels remain high. Residential properties continue to be sold to occupiers and in the open market via auction/private treaty as appropriate.

15. Following a strong start to the year, the housing market ended 2007 in decline. The latest Housing Market Overview from Colliers CRE confirmed that house prices are easing. Having maintained the base rate at 5.5% in January, expectations are that interest rates will be lowered. Mortgage borrowing has declined and it is expected that the housing market will decline further.

Pan London Asset Plans

16. The activity level of Territorial Policing (TP) BOCU Commanders continues to lead the consultation process for their respective BOCU Asset Management Plans. Property Services are supporting TP in developing the consultation and communication plans for each Borough and have attended public meetings in support of the consultation and communication process.

17. Property Services have supported TP in the development of the business case for MPS/CPS Integrated Prosecution Teams, a paper has been presented separately to the MPA (via the Co-ordination and Policing Committee 7 February) on this . A smaller pilot scheme for the introduction of “virtual courts” is also being undertaken. Further support is also being provided to facilitate the role out of approved operational changes to the current arrangements provided within Custody facilities (Project Herald).

18. Asset Strategies continue to be progressed for other business groups, and a number of larger pan London properties where business groups share occupation. A separate paper has been presented via the Co-ordination and Policing Committee 7 February in regard to Marlowe House, Sidcup and separate briefings have been held in regard to Hendon.

19. Proposals in regard to a strategic Olympics co-ordination centre and in particular the legacy issues associated thereto continue to be developed by Central Operations.

Property “deals” / “schemes” under consideration

20. Property Services continue to consider other property opportunities. Schemes around the future provision of residential accommodation supporting the Hendon training estate have been reported upon and the transaction is progressing with a final report to be provided shortly.

21. An opportunity within Lambeth Borough in support of Forensic requirements has now been rejected as being unsuitable for purpose and not delivering value for money. Further solutions will now be developed and reported in due course.

22. A South London DoI site postponed from prior years Capital Programme action is now in need of urgent attention and a prioritisation assessment / report is being developed for consideration.

23. With MPS colleagues estate solutions to CTC, and related detention issues, are being explored with the Home Office and ACPO to resolve the design parameters required.

24. Construction of enhanced facilities at Cobalt Square for ICPT commenced in November 2007 and will be complete in May 2008.

25. Works have commenced to upgrade various areas of New Scotland Yard to provide accommodation for SCD and Legal Services, who will vacate Wellington House in mid 2008.

Operational Support Group

26. Work continues to scope the impact of the 2012 / Olympic demands that will be placed upon OSG. These are expected to be significant, the developing proposals for the temporary deployment centres, related to both numbers of officers and overnight accommodation, would have logistical and financial implications.

27. CAMB support to Operation Paget / Coroner’s inquest continues and is attracting a great deal of media interest which is being co-ordinated with DPA.

28. CAMB support to Operation Memini, death of Benazir Bhutto, involved deployment to Pakistan at very short notice with a correspondingly short programme to prepare the resulting information.

PFI Contract Management

29. The new enhanced bullet catcher was installed on the “A” Range by the PFI Contractor. The work was carried out on time and at the Contractor’s expense. It offers many advantages over the previous metal trap from both a Health & Safety point of view and greater flexibility in the type of weapons and ammunition that can be used, also the nature of training that can be carried out.

30 The PFI Contractor is due to re-tender the services for the MPSTC as part of the Benchmarking exercise within the contract. This will establish that the services are “value for money” and incorporate any amendments/variations made to these services since inception. The benchmarking exercise is underway. MPS staff will be involved to ensure propriety of the tendering process. The benchmarking exercise for the South-East London Police Stations project will follow early next year on similar lines.

31. Job descriptions have been prepared for a number of posts to manage the PFI contracts. These posts are due to become vacant over the next few months due to retirement. It is anticipated that both internal and external advertisements will be placed.

Commercial Management

32. The MPIC contract and two FMS contracts are now fully operational, the six month “honeymoon” period having expired. The contractors continue to experience some problems with the IT interfaces but these are being mitigated and various reports from the systems are now available. The “Boarding Up” works have been added to both FMS contracts and are to be monitored for the first six months to establish volumes and costs of the service, to be passed on to DLS.

33. John Stevens has joined us as an “Interim Senior Relationship Manager”, to manage the commercial aspects of the MPIC and FMS contracts. He will review the contract and make recommendations regarding processes, reporting procedures and content, auditing, appraisals, and further develop structures and processes to address any shortfalls of the contract. He will also identify improvements and benefits from change, and demonstrate best value – much of which will be delivered by the suppliers. Lastly, he will develop the Business Continuity plan and processes to be followed if the contractors are unable to supply, go insolvent or the contract terminates at short notice.

Fire Arms Facility

34. A Site Search Agent has been appointed to identify opportunities for future facilities and approximately 14 responses have been received to date. Site visits commenced on Monday 28th January reviewing sites to the north/west of Heathrow.

Town Planning Issues

35. The previously reported work in Property Services has continued and we are working closely with the Greater London Authority (GLA), London Development Agency, London Thames Gateway Development Corporation and Local Planning Authorities. Representations have been made in regard to the draft London Plan and we await the full Examination in Public (EIP) report later in the Autumn. The EIP are recommending, following representations, that “police facilities be added to the Section 106 / Tariff lists in the London Plan” and it is understood The Mayor may be minded to accept this recommendation.

List of Abbreviations

BOCU

Borough Operational Command Unit

CAMB

Computer Aided Modelling Bureau

CO

Central Operations

CPS

Crown Prosecution Service

CTC

Counter Terrorism Command

DoI

Directorate of Information

DPA

Directorate of Public Affairs

EOG

Estates Oversight Group

ESP

Estates Strategic Plan

GLA

Greater London Authority

LB

London Borough

C. Race and equality impact

Any equality and diversity implications arising from the matters 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.

D. Financial implications

1. Any financial implications from the above items will be reported in full to the relevant committees at the appropriate time. Support to security operations continues to place financial demands on Property Services and the estate. Unless otherwise stated, other financial implications are manageable within existing approved budgets.

2. The decision by the PFI provider to defer refinancing has an adverse impact on PSD budgets in year, and going forward, and these are being managed within delegated powers in consultation with The Treasurer.

E. LEGAL IMPLICATIONS

1. Contract or other documentation in these matters will contain all the usual commercial terms and provisions, and no unduly onerous or unusual terms – except where reported otherwise.

2. Significant risks have been evaluated and considered and steps taken to minimise or manage such risks.

3. All reported matters are considered to be within the powers of the Authority.

4. All/any disposal represents the best consideration that can reasonably be obtained – save where stated otherwise.

5. Recent insurance inspections have raised on site management issues that could adversely impact risk management / cover and, with MPS colleagues, an action plan to address these issues is underway

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

Appendix 3

METROPOLITAN POLICE SERVICE: RESIDENTIAL ESTATE

Table 1: Residential Quarters – Rents: 1 April 2008

Table 2: Section House Service Charge: 1 April 2008

Appendix 4

METROPOLITAN POLICE SERVICE: RESIDENTIAL ESTATE

Table 1: Residential Quarters – Rents: 1 April 2007

Table 2: Section House Service Charge: 1 April 2007

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