Consultancy Support for Old Oak West - Western Lands

Since the Board’s approval of OPDC’s revised regeneration approach in January 2020, the team has worked to develop and evidence the case for delivering Old Oak West (OOW, previously referred to as “the Western Lands”) as a comprehensive regeneration scheme through a collaboration between government (as landowner and funder) and the OPDC (with GLA support) as the local regeneration agency.

Strategic Outline Case (SOC)

The Mayor submitted OPDC’s final draft of a Strategic Outline Business Case (SOBC) to the Department for Levelling Up, Homes and Communities (DLUHC) and the Department for Transport (DfT) on 16 February 2022. The SOBC proposes to bring forward regeneration at Old Oak as a comprehensive, coordinated development bringing together the interests and capabilities of DLUHC, DfT and their respective agencies and bodies.

The SOBC was approved by both departments in April 2022. This approval provides clear direction for OPDC, as well as High Speed 2 (HS2) Ltd, Network Rail and Homes England regarding their involvement in the next stage of developing Old Oak West.

The SOBC sets out the broad framework for OPDC, local and national government to work collaboratively to bring forward the OOW project and catalyse further benefits for economic development along the HS2 route. As an early-stage document there are several areas which OPDC will need to address at the next stage with a wider group of stakeholders and partners.

OPDC is working alongside Homes England, the Departments, HS2 and Network Rail to develop a detailed mobilisation plan. The key workstreams of the mobilisation plan are:

• the preparation of an Outline Business Case (OBC)
• the development of a planning strategy including the preparation of a Supplementary Planning Document (SPD) for Old Oak West

At its March 2022 meeting, the Board delegated to the Chief Executive Officer the authority to approve expenditure in FY 2022-23 of up to £800,000 (the ‘OOW delivery budget’). This expenditure is to support the development of OPDC’s planning strategy and the production of an OBC for OOW. This approval is being sought within that delegation.

GLA Land Fund

In March 2022, OPDC secured a £50m interest-free loan from the GLA’s Land Fund to finance land acquisition, infrastructure and enabling works to accelerate and support the delivery of a minimum of 1,100 homes by 2029.

The loan will assist with the facilitation of planning policy compliant housing delivery on public and private land, and act as an early catalyst for the wider regeneration of the OPDC area. To achieve the Land Fund housing outputs, OPDC must carry out pre-acquisition due diligence and land acquisitions within the facility envelope, with a view to disposing of assembled sites to the market via a procurement framework to be agreed with the GLA. The appointment of external consultants is therefore necessary to provide cost-effective resource support to the OPDC team. It is also essential that the inputs are impartial and independent meeting the GLA’s requirement of reliance on all reports submitted for Land Fund funding, and therefore must be provided by technical experts who operate at arm's length from OPDC’s staff team.

At the March 2022 Board meeting, the Board approved OPDC’s entry into the GLA facility and an initial draw down of funds to support the first tranche of pre-acquisition work for sites OPDC is seeking to acquire with this funding. It also approved a delegation to the Chief Executive Officer to approve expenditure of drawn funds (the “Land Fund budget”) up to £750,000. The budget will enable OPDC to review and shortlist priority sites. If additional spend is required, due to new opportunities which may arise, a request will be submitted to the OPDC Board to draw down additional funds.

Procurement Approach

OPDC will procure a range of technical specialists over the coming year to support the development of OPDC’s planning and regeneration strategy and the production of an OBC for OOW. The appointments will be procured from the TfL Professional Services Framework, Homes England, and Crown Commercial Service frameworks with support from TfL Commercial shared services. The appointments will be commissioned by, managed by, and report to appointment owners at Grade 12 and above in the Delivery Directorate at OPDC.

Where OPDC is working in close partnership with government departments and agencies to develop the OBC, and where government decision makers may place reliance on the evidence that supports it, appointments will be procured with the ability to extend a duty of care to those parties.

OPDC requires flexible longer-term appointments for key disciplines. These ‘call-off’ appointments will be term-limited (two years, with an option to extend by a further two years), a fixed scope and price for the first tranche of work, and no financial limit for any future call-off instruction OPDC may make in line with the scope of that appointment. Financial authority for each new call-off instruction will be managed in line with OPDC’s approvals process and delegated authority limits.

Summary of projected expenditure

The table below summarises the projected expenditure on the technical specialists identified above, across the OOW delivery and Land Fund budgets, in the 2022-23 financial year.

The expenditure in the table above is an estimate and activities/spend may vary. The expenditure excludes contributions from stakeholders of work commissioned directly by them.

It is anticipated that further expenditure, for continued real estate advice, will be required within the four-year contract period. Any further expenditure on consultancy services from within the £750,000 Land Fund budget will be approved by a separate decision.

Strategic Development Advisor for Old Oak West

OPDC is procuring a consultant to provide strategic development advisory and real estate services to support preparation of the OBC and to deliver its strategic objectives. The scope of services is categorised within the following services:

• Strategic development advisory
• Finance and funding
• Business case support
• Structuring partnership arrangements
• Commercial procurement advice
• Property agency (advising acquisitions and disposals)
• Asset and estate management

This expenditure will deliver property market advice to build the evidence base for the financial model and define the product mix and delivery strategy. The financial model is being developed jointly by DfT, Homes England and OPDC in-house but requires independent advice to assure market assumptions appropriate. This will ultimately support work to define OPDC’s funding and investment ask to government and demonstrate affordability and value for money.

The expenditure will also deliver advice on structuring and partnering, including advice on public/private sector transaction structuring and debt financing options, early market testing, and a developer procurement strategy. In addition, OPDC will have the benefit of a team of real estate experts to support wider property services, as required.

OPDC will procure the advisor on a call-off basis with the support of TfL Procurement. The procurement will be from an existing appropriate framework.

This decision seeks approval of up to £140,000 of expenditure to appoint consultants to provide these strategic development advisory and real estate services. The expenditure will be funded from the OOW 2022-23 delivery budget.

Land Acquisition Services for Land Fund Sites

OPDC’s currently appointed Strategic Development Advisor, Savills, was appointed by competitive tender through the Homes and Communities Agency (HCA) Property Panel in 2019 to provide Strategic Financial and Real Estate Services. OPDC has instructed its property agents, Savills, under an existing HCA contract, to provide land acquisition services in the short term, ahead of a new advisor being appointed.

Savills will provide acquisition services in relation to the Land Fund priority sites in line with the Land Fund milestones. Savills will consider the acquisition approach for each tactical site which will, in turn, determine the order of sites to target, likely acquisition costs and disposal values. Savills will also undertake due diligence on the sites, approach freeholders and provide negotiation and technical support for the completion of acquisition.

This decision seeks approval for £100,000 for Savills to provide land acquisition services (agency/valuation) on the Land Fund priority sites. The expenditure will be funded by the Land Fund loan.

Legal Advisor (Planning and Property) for both Old Oak West and Land Fund Sites

TfL Legal provide legal support to OPDC via a shared services arrangement which allows them to act as OPDC’s in-house legal resource. TfL Legal also operate a panel of external solicitors to provide support where additional resource, specific expertise and independent assurance is required (the TfL Legal Panel). Ashurst is appointed to advise OPDC on all planning and property legal matters relating to OPDC’s regeneration proposals and has continued to provide support as required.

This allows TfL legal to call-off further instructions on behalf of OPDC, to Ashurst to support OPDC’s current regeneration proposals for Old Oak West. 3.11 Ashurst will provide environmental, planning and property advice for the development of the planning strategy and the Old Oak West Supplementary Planning Document (SPD). Ashurst will also provide advice in relation to OPDC’s land acquisition and assembly strategy, land and property due diligence and advice on the Land Fund sites.

This decision seeks approval of expenditure up to £240,000 to undertake the above tasks. The expenditure will be funded through a split of £180,000 from the 2022-23 OOW delivery budget and £60,000 from the Land Fund budget.

Planning Advisor for both Old Oak West and Land Fund Sites

A planning advisor will provide advice and support to OPDC in its capacity as regeneration agency, focussing on OPDC’s planning strategy to support the delivery of key infrastructure, development proposals, planning viability work and OPDC’s wider infrastructure funding and affordable housing objectives.

OPDC will procure a call-off contract for planning advice and, at this stage, expects the planning advisor to support the development of the planning strategy and the Old Oak West SPD. The planning advisor will provide advice on planning viability as part of the wider financial modelling for the OBC and in relation to pre application discussions for priority sites. The planning advisor will also support land assembly activity.

This decision seeks approval of expenditure up to £115,000 to undertake the above tasks between now and the end of the financial year. The expenditure will be funded from the 2022-23 OOW delivery budget (£50,000) and the Land Fund budget (£65,000).

Land Assembly Advisor for Old Oak West

A Land Assembly Advisor will initially support development of the Old Oak West SPD and provide general commercial and technical advice in support of land acquisition and assembly activity.

The Land Assembly Advisor will carry out initial land referencing and provide and updated the property cost estimate for all of the land and rights potentially required to deliver Old Oak West. It will identify any additional rights, easements or restrictive covenants on land which may impact the scheme or require removal or modification.

The Land Assembly Advisor will support specific negotiations, including where affected parties may require additional support for relocation or re-provision of their affected property. The Land Assembly Advisor will also support discussions with DfT, Network Rail and HS2 about any operational, occupational or title restrictions on key sites.

OPDC will procure a call-off contract for land assembly advice and expects this to initially focus on supporting the development of the land assembly strategy. However, in the interim, whilst this contract is being procured, there is an immediate need for interim support. A brief for the interim Land Assembly Advisor, including justification for a direct award, is included at Appendix 1.

This decision seeks approval of expenditure up to £125,000 to undertake the above tasks, and approval for a direct award for interim advice. The expenditure will be funded from the 2022-23 OOW delivery budget.

Multidisciplinary Design Team for Old Oak West

OPDC is procuring a multidisciplinary design team to support the development of the Old Oak West planning strategy and the Old Oak West SPD. This commission will provide technical design input and community engagement expertise to develop the OOW illustrative scheme and development principles, and to inform the OBC.

The appointed consultant team will include the following disciplines: master planning, urban design, architecture, landscape architecture and community engagement. It may also include other disciplines necessary to support the planning strategy, for example, regeneration specialists, environmental and/or sustainability consultants, equalities assessment etc.

Other tasks that may be needed to support the development of the planning strategy include:

• Scoping and design of meanwhile use and early activation projects
• Feasibility/capacity studies for potential development sites
• Production of illustrations and graphics

The expenditure for the first phase technical outputs for the OBC and SPD including site capacity updates resulting from constraints identified and development scenario testing on key sites. The expenditure will also deliver the first phase of community engagement, focusing on character, placemaking and a public facing key principles document for the OOW project.

This decision seeks approval for expenditure of up to £200,000 to undertake the first phase of this work. This expenditure will be funded by the 2022-23 OOW delivery budget.

Architectural Services (including multi-disciplinary technical support) for Land Fund Sites

OPDC will be procuring new advisors to support the technical analysis of land fund sites, however in the short term, this decision is seeking authority for urgent work to be carried out by our existing consultant, Gort Scott Architects (GSA).

OPDC is extending the appointment of GSA to undertake architectural capacity studies for several additional target site acquisitions. These capacity studies will help OPDC to assess the financial viability of these sites and determine their suitability for delivery within the first phase of development.

This decision seeks approval for expenditure of up to £50,000, to increase GSA’s current Contract Value from £270,000 to £320,000. A variation to their existing call-off contract will be sought. The expenditure will be funded from the Land Fund loan.

OPDC will procure a design team to develop proposals for the first phase of development sites to be delivered through the Land Fund investment. The appointed team will develop coordinated design proposals to a sufficient level of detail (RIBA Stage 2/3) to facilitate pre-application discussions for the first phase of sites. This commission will allow OPDC to expedite planning discussions to help OPDC meet agreed Land Fund milestones and to accelerate housing delivery.

The appointed design team will include the following disciplines: structural and civil engineers and cost consultants. Input will be required from technical specialists to support pre application discussions.

The scope of services will include the following key tasks:

• Preparation of concept designs incorporating strategic engineering requirements, in line with client brief and agreed budget
• Obtain pre-application planning advice
• Production of drawings and visuals to articulate the scheme
• Preparation of outline cost plan
• Technical input to support pre application discussions and discussions with landowners (e.g. sunlight/daylight assessment, Rights of Light assessment)
• Technical due diligence to de-risk financial model assumptions
• Undertake duties associated with Principal Designer role

This decision seeks approval for expenditure of up to £250,000 in 2022-23, to be funded by the Land Fund loan (£300,000 including the Gort Scott instruction at 2.28).

Surveys and Due Diligence

OPDC is seeking approval for up to £45,000 spend from the OOW 2022-23 delivery budget to undertake surveys and high-level technical due diligence in relation to the Old Oak West capacity studies. This work will help to de-risk the capacities that will inform the OBC financial model.

This may include the following:

• Sunlight/daylight assessment
• Rights of Light assessment
• Wind assessment
• Technical Development Appraisals (high level input on highways, environmental, flooding etc)
• Topographical surveys

The work is needed by the autumn to inform the development of the OBC. A separate procurement is being undertaken to allow for the work to be accelerated ahead of the appointment of the multidisciplinary infrastructure/engineering team.

This decision seeks approval for expenditure of up to £45,000 in 2022-23, to be funded by the OOW 2022-23 delivery budget.

Surveys and Ground Investigations

OPDC is procuring a consultant team to undertake desktop and intrusive surveys and ground investigations for sites within OOW. The objective of this exercise is to identify potential constraints and ensure that OPDC’s land acquisition activity is underpinned by sufficient technical due diligence.

A single team will be used across both OOW and Land Fund sites, with the financial contributions from each budget being managed by OPDC. The apportionment will be made on a pro-rata analysis for the area of Land Fund sites or the wider OOW development area.

This decision seeks approval for expenditure of up to £150,000 to appoint consultants to undertake desktop and intrusive ground investigations. The expenditure will be funded through an estimated split of £60,000 from the OOW 2022-23 delivery budget and £90,000 from the Land Fund budget.

The objective of procuring the technical specialists identified above is to support the next phase of delivery of the OOW project over the 2022-23 financial year, including the development of the OBC and planning strategy, and to support the delivery of investment through the Land Fund facility.

The objective of the Land Fund spend is to carry out sufficient independent pre-acquisition legal and property due diligence on the priority and tactical sites to meet the conditions of the GLA Land Fund facility and OPDC Governance requirements. This expenditure will support the acquisition, enabling works and infrastructure works required to deliver 1,100 homes by 31 March 2029.

Old Oak is the largest single regeneration project in London that is currently without a strategic investment and development partner and so offers an opportunity for substantial inward investment to help drive London’s economic recovery and deliver tens of thousands of new homes and jobs.

The proposal will procure a range of technical specialists to support the next phase of delivery of the OOW project over the 2022-23 financial year, including the development of the OBC and planning strategy, and to support the delivery of investment through the Land Fund facility. The OOW strategic objectives will be embedded in the procurement of consultants and the services they provide.

Adopting a comprehensive approach to delivery is an essential precondition for the success of the OOW project. It will allow more homes to be built and accelerate delivery. It will facilitate earlier investment in infrastructure and deliver coordinated and comprehensive placemaking. In turn, this comprehensive approach will enhance the overall quality of development.

Contract management

Consultants will report to a nominated Contract Manager in the OPDC delivery team. The day-to-day management of the commission will be a Senior Development Manager, with oversight from the Development Director.

Consultants will provide a named Project Lead who will be the main contact for OPDC. All services provided under the contracts will be managed, co-ordinated, and endorsed by the Project Lead. Consultants will attend weekly or fortnightly progress update meetings and provide a monthly programme update report to the Contract Manager. Consultants will also maintain a record of the services carried out and the applicable fees and invoices over the course of the contract.

Budget oversight

The Development Director will act as Senior Responsible Officer (SRO) for the management of the OOW workstreams and Land Fund facility. The Project Director will act as the SRO for land acquisition and assembly workstreams.

The Development Director will oversee the contract awards across the portfolio of technical consultants. This includes providing budget oversight and management of workstreams to ensure efficient and co-ordinated delivery of services. Contract Managers will provide monthly updates to the Development Director on workstream progress, gateway approvals, change control, and risk management arrangements.

The Old Oak West Programme Board, chaired by the Chief Executive Officer, will receive monthly updates on the progress against all the expenditure approved in this decision form. The OOW Programme Board will approve the instruction of architectural and technical work required on potential land fund sites, in line with the progress of commercial discussions to ensure such work is commissioned at the appropriate stage and to manage the risk of potentially abortive work.

Risks and issues

The following risks are associated with this proposal:

Under Section 149 of the Equality Act 2010, as a public authority, 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.

The GLA Group Responsible Procurement Policy sets out the GLA Group’s plans, ambitions, and commitments for ensuring socially, environmentally, and economically sustainable procurement to deliver improved quality of life and better value for money for Londoners. As part of its procurement strategy, OPDC will ensure that bidders set out how they will embed EDI and enhance the social value outcomes in their delivery by submitting an EDI statement and action plan. Compliance and performance against the EDI action plan will then be monitored as part of the monitoring and reporting process.

Any intervention by OPDC’s Delivery Directorate will be subject to a detailed equalities impact assessment (EQIA) at the appropriate stage of that project and imbedded in the development of any proposals.

N/A.

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

The advisory contracts will be procured and managed in line with approvals and the OPDC Contracts and Funding Code.

Expenditure is capitalised in accord with the definition under proper accounting practice. In the event that the expenditure incurred from the Land Fund facility does not result in an asset that will provide the Corporation with control of the resulting economic benefit or service potential, the Corporation cannot recognise the expenditure on its balance sheet or asset register and will need to identify revenue resources to fund the costs.

The report above indicates that the decision requested of the Chief Executive Officer falls with 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.

In taking the decisions requested, the Chief Executive Officer 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 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 and foster good relations between persons who share a relevant protected characteristic and persons who do not share it (section 149 of the Equality Act 2010).

The services required should be procured in accordance with the OPDC’s Contracts and Funding Code by relevant procurement officers. Officers must ensure that appropriate contract documentation is put in place and executed by the successful consultant and OPDC before the commencement of the services.

The table below summarises the timeline for procurement of technical consultants to support the next phase of delivery of the OOW project over the 2022-23 financial year.

Development Director Report – January 2020

Development Director Report – March 2022

MD2956 – OPDC Land Fund loan facility

N/A.