CD154 - Procurement of Savills for Western Lands Valuation Support

In January 2020, the Board approved OPDC's revised delivery approach, which included the following key elements:

• a new focus to the regeneration of the area, taking a comprehensive view of the 'Western Lands' along Old Oak Common Lane, Old Oak Lane and Victoria Road where key sites are owned by Department for Transport (DfT) and Network Rail
• developing an evidence base of the benefit of a comprehensive and coordinated approach to land, development and infrastructure funding to optimise the strategic opportunities that the area offers
• securing the support of major partners including public sector landowners and funders
• developing an engagement plan to ensure local and future communities in the area can influence the development and delivery of this major opportunity for London

Since January, OPDC officers have engaged with key stakeholders including Network Rail, HS2 and the boroughs to begin the process of securing the support of the major partners to develop the Western Lands strategy. OPDC has also engaged with central government - via the Ministry for Homes, Communities and Local Government (MHCLG), Homes England (HE) and the Infrastructure and Projects Authority - to discuss potential funding opportunities.

OPDC's Planning Policy team have been working on proposed modifications to the draft Local Plan that would allocate new sites in the 'Western Lands area for residential led, mixed use development'.

To support the delivery of the Local Plan's targets, OPDC's Development Team is developing a funding and delivery strategy, focussed on the following areas:

• funding - where planning gain may not fund sufficient infrastructure, or fund it early enough in the development cycle to support accelerated, high quality delivery
• infrastructure - providing greater certainty on cost, deliverability and timing of delivery required to support development
• land and rights - providing greater understanding of the land that might be required to delivery infrastructure and public realm improvements
• viability and deliverability - advice for specific development sites that could be brought forward more quickly

Cumulative approved expenditure on Western Lands preparatory work in 2020/21 totals £410,000.

The 13 October Board paper approved a delegation for the Development Team's Western Lands budget of £440k. This approval is being sought within that delegation.

The proposal and how it will be delivered

Savills have detailed knowledge and experience of working in the OPDC area and this work is congruent with the scope procured under the approved CD148 and procured under HCA Contract No. DN336104. The existing scope includes development and valuation work, capacity testing and cashflow analysis. This supplementary approval is for additional deliverables to support OPDC's SOBC and the financial, economic and commercial cases therein.

The commission will cover the following work streams:

• obtaining professional valuation advice on the EUVs of all government owned commercial and industrial sites within the Western Lands project areas.
• completing Benefits Cost Ratio (BCR) modelling for the reference case and intervention case relative to wider economic benefits and costs the scenario will produce
• advising OPDC on market demand and potential options for partnering with the private sector to deliver Westerns Lands, including agency advice on the latest trends and practices relative to procurement, state aid regulation, and delivery legal structures for major public-private regeneration schemes

OPDC has positively engaged with both MHCLG and Homes England and has been encouraged to develop proposals to the SOBC stage in anticipation of the proposals being a suitable candidate for anticipated funding. However, as such funding has not been formally announced and the eligibility of OPDC's proposals will need to be confirmed, all expenditure will be closely monitored. OPDC will reserve the right to stand-down or terminate work should it wish to do so to avoid any abortive work.

OPDC intends to instruct Savills to provide the above services by variation to their existing call-off contract with OPDC (HCA Contract No.DN336104).

The objectives of the proposal are to:

• Establish a baseline valuation of government land within the Western Lands area in order to inform the SOBC and negotiations for land transfer
• Carry out an initial economic assessment including high-level BCR to support the SOBC
• Make recommendations on the potential structuring and procurement of private sector development partners for the delivery of Western Lands infrastructure and development.

The expected outcomes of the proposal are:

• A detailed summary of EUVs that will be used as assumption in the valuation model to determine accurate funding scenarios for the SOBC.
• A baseline and intervention BCR analysis that will guide strategic direction of the SOBC.
• An understanding of interest in the market for master developers to be brought into the procurement when certain conditions are met relative to project benchmarks.

Strategic fit

This proposal supports OPDC's Western Lands strategy; a revised delivery approach which was approved by the Board in January 2020. It provides technical work necessary to support the SOBC for funding.

OPDC must have 'due regard' to the need to eliminate unlawful discrimination, harassment and victimisation as well as to the need to advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not.

This work has no impacts on those with protected characteristics. The outputs from the Savills' consultancy commission, where material to future corporate plans, strategies, policy development, communications, investment/funding requests and delivery plans, will be subject to equalities assessments at the appropriate time.

Savills have adopted Equal Opportunities Policy for the performance of their work.

Project governance and assurance

The Development Director will act as Senior Responsible Officer (SRPO) for this consultancy expenditure, and the subsequent management of the Savills contract. Day to Day management of the work will be led by the Senior Development Manager.

The SRO will coordinate, control and regularly monitor Savills' instructions and outputs; ensuring that relevant outputs are reported internally.

Risk and issues

The following risks are associated with this proposal:

There are no extant issues that require management or mitigation.

Other considerations

There are no other considerations that need to be noted in the taking of this decision.

Conflicts of interest

No one involved in the preparation or clearance of this Form, or its substantive proposal, has any conflict on interest.

Expenditure of up to £25,000 will be funded from the 2020/21 Western Lands budget in the Delivery directorate.

The call-off contract does not have a financial limit; however, it is time constrained to June 2022. This expenditure will be met from the respective budget for the year to which the expenditure relates.

Further expenditure and contract variations are subject to the OPDCs decision-making process.

Any procurement undertaken must be in line with the Corporation's Procurement Guidance and the Contracts and Funding Code is adhered to.

The report above indicates that the decision requested of the Chief Executive falls within the OPDC's object of securing the regeneration of the Old Oak and Park Royal area and its powers to do anything it considers appropriate for the purposes of its objects or purposes incidental to those purposes, as set out in the Localism Act 2011.

In taking the decisions requested, the director must have due regard to the Public Sector Equality Duty; namely the need to eliminate discrimination, harassment, victimisation and any other conduct prohibited by the Equality Act 2010, and to advance equality of opportunity and foster good relations between persons who share a relevant protected characteristic (race, disability, gender, age, sexual orientation, religion or belief, pregnancy, and maternity and gender reassignment) and persons who do not share it (section 149 of the Equality Act 2010). To this end, the director should have particular regard to section 6 (above) of this report.

The officers have indicated in section 2 that the services required are within the scope of the existing call-off contract with the service provider (HCA Contract No. 336104) and will be instructed in accordance with the term and conditions of that call-off contract.

Officers must ensure that the appropriate call-off contract mechanism is followed and required documentation is put in place when instructing the services.