CD165 Savills Western Lands additional input to SOC

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 if 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 2021, OPDC officers have worked directly with Homes England (HE) and engaged with other public sector stakeholders, including Network Rail, High Speed 2 (HS2) and the Boroughs, to begin the process of securing the support of the major partners to the development of the strategy for Westerns Lands. OPDC has also engaged with central government - via the Ministry for Homes, Communities and Local Government (MHCLG), DfT and the Infrastructure and Projects Authority - to discuss potential funding opportunities.

This engagement with government colleagues has led to a direction to produce, and jointly agree, a Strategic Outline Case (SOC). The SOC will be developed by OPDC and HE in line with Treasury's guidance for developing project business cases and will follow the "five cases" model: Strategic, Economic, Commercial, Financial, Management.

Parts of the SOC is being developed by both OPDC and HE officers drawing on in-house expertise, including input from the GLA Housing & Land Directorate and Transport for London (TfL) Operational Property. However, specialist consultancy input is required to support the drafting and compilation of the business case and in particular, to provide technical expertise for the economic and financial cases.

Savills were appointed to provide technical input on the development of the SOC for OPDC's Western Lands strategy (CD161) in line with the technical services procured under the existing call-off contract.

This decision seeks approval for further expenditure of £65,000 from OPDC's Western Lands 2021/22 budget to extend their appointment, under the existing call-off contract, to provide development, viability, and funding advice, as well as procurement and delivery advice pursuant to the scope of the call-off contract, in order to input into the SOC. This in addition to the £60,000 already approved on Western Lands and SOC, bringing total approved expenditure for Savills to £125,000 for FY21/22. Savills appointments approved for this commission are detailed in the following table:

Savills were appointed in January 2019 under a Homes and Communities (HCA) framework contract (reference DN335104) which expiries in June 2022. That framework contract has been tendered via an OJEU-advertised procurement. The call-off contract is time limited and does not include a financial limit. OPDC ran this competitive tender within the procurement process set out for the HCA Property Panel. Following this process, Savills was selected as the preferred bidder based on quality and price.

The call-off contract provides for services to be instructed in response to OPDC need, throughout the contract period, at pre-agreed rates. The scope of this appointment and contract specifically includes the following items within the call-off contract (Pages 3-4) which are directly relevant to the SOC work required as part of this decision:

"Development consultancy, viability and delivery strategy advice

• Strategic real estate advice to optimise returns across sites;
• Undertake development appraisals on key sites and across the masterplan area to test and refine financial viability;
• Advise on the role, capabilities and interface of a Development Partner(s) as part of the delivery strategy;"

"Development transaction and partner procurement

• Advise on transaction structure options to ensure that the timing and quantum of both capital and revenue receipts are optimised in the context of delivery of a high quality and sustainable development;
• Undertake assessments of land receipts to ensure that OPDC secures value for money;"

"To undertake finance and funding strategy and financial modelling

• Review and advise on funding and investment opportunities for the scheme, or parts within it including property and infrastructure opportunities;
• Provide key inputs to the financial model from the real estate market to calculate land returns;
• Undertake regular updates to the financial model and key input to reflect scheme changes, market movements and delivery mechanisms, based on market insight and research;
• Supporting business cases to secure public-sector funding from GLA, Treasury or other sources;"

"Project management

• Preparing for, organising and attending meetings, workshops and presentations;
• Work alongside OPDC's wider in-house teams and consultants."

As its March 2021 meeting, the Board approved a delegation to the Chief Executive Officer and the Development Director to authorise expenditure in 2021/22 of up to £250,000 to support the ongoing development of a business case as the basis of a future bid for Government funding. This approval is being sought within that delegation. A summary of approvals under this delegation is below.

Expenditure authorisation against March 2021 Board Delegation:

The proposal and how it will be delivered

The commission will cover the following workstreams:

As detailed in section 1.6, OPDC intends to instruct Savills to provide the above services through their existing call-off contract with OPDC (HCA Contract No.DN336104).

The objectives of the proposal are:

• Provide technical expertise and support to the team preparing the SOC for OPDC's Western Lands regeneration proposals. The business case will be developed by OPDC and HE and will include significant input from both local and central government stakeholders in order to clearly articulate the resource requirements and benefit of delivering regeneration at Old Oak.
• Provide advice on a delivery and partner procurement strategy, both in support of SOC development and to generally, progress a delivery strategy to be agreed with major stakeholders.

The outcomes of the proposal are:

• Endorsement of the SOC from key Government departments (DfT, MHCLG and Treasury) to provide "gateway approval" and allow OPDC to progress funding, land, delivery and procurement plans.

Strategic fit

This proposal supports OPDC's Western Lands strategy; the revised delivery approach which was approved by the Board in January 2020. The work will provide technical and management related expertise necessary to prepare a SOC for submission to central Government.

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 impact on those with protected characteristics. The outputs from the Savills' consultancy comission, where material to future strategies, policy development, communications, investment/funding request and delivery plans, will be subject to equalities assessments at the appropriate time.

Savills has adopted an Equal Opportunities Policy.

Project governance and assurance

The Development Director will act as Senior Responsible Officer (SRO) for this commission, managing the contract with Savills. 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 of interest.

The expenditure of £65,000 approved via this decision will be funded from the 2021/22 Western Lands budget.

Any further expenditure is subject to the Corporation's decision-making processes.

The report above indicates that the decision requested of the CEO 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 purpose of its objects or purposes incidental to those purposes, as set out in the Localism Act 2011.

The procurement of the additional consultancy services from Savills is valued at £65,000. As the officers have set out in paragraph 17 above, Savills was appointed following a mini-competition under an OJEU-advertised framework agreement. Furthermore, as set out at paragraph 1.8 above, the services the subject of this phase of the project fall within the scope of the original contract. Moreover, the contract included a mechanism, which allowed the OPDC to request those services on pre-agree rates.