ADD358 FE Capital Investment Fund Valuation Due Diligence

Type of decision: 
Assistant Director's decision
Code: 
ADD358
Date signed: 
29 October 2015
Decision by: 
Debbie Jackson, Assistant Director of Regeneration

Executive summary

Subsequent to LEP, this ADD seeks approval for up to £30,000 of expenditure for technical due diligence in relation to valuation services, in support of assessment of proposals for future rounds and independent monitoring for the Further Education (FE) Capital Investment Fund. This expenditure will be contained within the £127,000 revenue allocation for technical due diligence contained within DD1368.

 

Decision

The Assistant Director approves revenue expenditure of up to £30,000 on technical due diligence for valuation services.

 

 

Part 1: Non-confidential facts and advice

Introduction and background

1.1    The London Enterprise Panel (LEP) has been awarded £55m in 2015/16, an indicative £65m for 2016/17 from Growth Deal 1 and a further indicative £38m from 2017/18 as part of Growth Deal 2 for capital investment in further education colleges and providers. This paper seeks a decision on 15 applications for funding from the 2015/16 provision. This FE Capital Investment Fund is for a programme of capital expenditure on infrastructure which will facilitate the delivery of further education services in London.

1.2    The FE Capital Funds provided by Government are capital only and as such there is a revenue requirement to support delivery of the programme. MD1420 approved in principle £147,000 from the Growing Places Fund budget to support specialist due diligence costs of the programme. DD1307 provided full approval for £120,000 and DD1368 approved a further £627,000 for technical due diligence and independent monitoring services, from FE Capital Investment Revenue Funding. 

1.3    Currently, approval has been granted via DD1368 for up to £127,000 of technical due diligence including cost consultants and building surveyors advice. A further £150,000 has been approved for Architecture and Sustainability advice. 

1.4    Current spend on due diligence for FE Capital Round 2 is projected as 0.17% of the requested amount of FE Capital Grant and 0.09% of the total project value of the FE Capital Round 2 applications. 

1.5    The provider of valuation technical due diligence has provided an estimate of £27,250 to complete the valuation on one application. This ADD seeks approval for up to £30,000 to allow for any unforeseen costs in completing the valuation. This will be funded from the £127,000 already approved for spend on technical due diligence by DD1368.

 

Objectives and expected outcomes

2.1    Valuation services are required to ensure that the match funding will be achievable in cases where projects have declared that match funding will be made available through the disposal of an asset, such as the rationalisation of land and/or no longer required buildings.

 

Equality comments

3.1    The FE Capital Investment Fund seeks to address issues of modernisation and rationalisation of FE Estate. In doing so, specific equality benefits include;

a.    Increase in accessibility of college estate (measured in m²)
b.    Increase in opportunity for Learners with Learning Difficulties and Disabilities to be engaged and retained in vocational and academic study.
c.    Increase in course provision, enabling more learners per annum.
d.    Increase in apprenticeships and traineeships, allowing students from deprived areas an economic incentive when obtaining a qualification. 

3.2    The procurement of this contract has been conducted fairly using a competitive process, which has been evaluated by three independent officers. This procurement is not expected to demonstrate an effect on equality requirements.

 

Other considerations

4.1    Projects are not deliverable. There is a risk that without the valuation advice, proposed projects do not receive the required match funding required to deliver the project. 

 

 

Financial comments

5.1    The expenditure of up to £30,000 (expected to be in the 2015-16 financial year) can be funded from the budget provision of £127,000 approved by DD1368 for technical due diligence. 

 

Planned delivery approach and next steps

6.1     All services have been competitively procured (in accordance with the GLA’s Contracts and Funding Code) from an existing  available framework on a call-off basis and services required will be appropriate to the scale, complexity and risk associated with each project. 

6.2    Following a competitive procurement process, AECOM was the preferred provider of valuation technical due diligence. A call off contract (number: GLA 80750) was confirmed on 14 October 2015 (copy appended to this decision).

Activity

Timeline

Procurement of contract

Completed

Delivery Start Date

October 2015

Delivery End Date

September 2018