Request for Release of Capital and Contract Variations

Reference code: 
PCD 67
Date signed: 
03 October 2016
Authorisation name: 
Sophie Linden, Deputy Mayor, Policing and Crime

Executive summary

The Deputy Mayor for Policing and Crime (DMPC) is being asked to consider the approval of additional investment of £9,000,000 to finalise the refurbishment of Curtis Green.  This refurbishment is a key element of the Major Building Estate Strategy including the release and disposal of NSY.   The updated Estate Strategy will now deliver in excess of £220m net capital receipts against the original planned projections in 2012 of £93m.  Due to recent unforeseen circumstances outside MPS/MOPAC’s control, and principally concerning essential perimeter security, telecommunications installation and public realm works, additional fund of £9m is required.  The overall investment will contribute to the planned reduction in annual revenue costs of £6.4m.

Recommendation

The DMPC is asked to;

 

  1. Approve the additional sum of £9,000,000 of capital to be funded from the 2016/17 Capital Programme following the re-prioritisation to enable completion of the Curtis Green re-development and NSY exit programme;
  2. The DMPC is asked to approve the extension of the BAM Contract, and associated funding; approve the additional costs in support of the works to Richmond Terrace, and the costs of the consequential programme management resources required.
  3. Delegate authority to the Director of Commercial Services to complete necessary contractual documentation in regard to the contracts/agreements.

Non-confidential facts and advice to the Deputy Mayor for Policing and Crime (DMPC)

 

Introduction and background

The release of New Scotland Yard (NSY) and the redevelopment of the Curtis Green Building are two key strands of the Major Building Estates Strategy which will deliver revenue savings of £6,400,000 per annum. It is expected to release in excess of £220,000,000 of receipts for reinvestment in the Mayor’s Office for Policing and Crime (MOPAC)/ Metropolitan Police Service (MPS) capital programme or to repay borrowing.

Due to recent unforeseen circumstances outside MPS/MOPAC control, and principally concerning essential perimeter security, telecommunications installation and public realm works, the release of £9,000,000 funding is requested along with a variation in contractual terms to secure works required to enable project completion and the financial opportunities to be realised.

 

Issues for consideration

Whilst the net capital that will be released through the strategy now exceeds the original approvals, and revenue savings generated remain consistent, the timing for completion of the Curtis Green scheme has extended beyond the exit timeline for NSY. To mitigate this, the exit of NSY has been ‘de-coupled’ from the Curtis Green occupation to ensure that the receipt can still be released.

Contingency plans developed in January 2016 included the use of existing MOPAC facilities, whereby accommodation could be utilized on a short term basis, without impacting on operational performance.  By implementing these contingency plans, costs will be off-set against revenue reductions in the operation of NSY to 31 October and can be contained within existing revenue budgets

The implementation of the MOPAC/MPS Estate Strategy 2013/16 and smarter working practices, will deliver a reduction in the Estate required for operational use by 30% at the end of 2016 and expenditure by £59,000,000 per annum against 2012 costs. 

 

Financial Comments

The sum of £9,000,000 includes additional funding for neighbouring works, town planning consent, security requirements, parliamentary estate requirement, asbestos removal and digital policing/property services project management resource to the completion of the Curtis Green re-development project.

The updated Estate Strategy is expected to deliver in excess of £220,000,000 against the original planned projections in 2012 of £93,000,000 budgeted within the 2016/17 capital programme.

The associated revenue implications of the proposed investment will reduce expenditure by £6,400,000 per annum contributing to the £59,000,000 savings target by 2016.

The additional funds required have been identified as part of the wider review of the 2016/17-2020/21 Capital Programme.

 

Legal Comment

The DMPC approval is required under paragraph 4.8 of the MOPAC Scheme of Consent and Delegation for all business cases for revenue or capital expenditure of £500,000 and above

 

Equality Comments

There are no direct equality issues arising from this proposal.