Cabinet Member for Education, Skills and University and Cabinet Member for Resources
November 2011 PUBLIC REPORT
Contact Officer(s): Brian Howard – PCC Children Services Programme Tel. 01733 Manager, Secondary Schools Development 863976
Award of Contract for the New Build of Stanground College
R E C O M M E N D A T I O N S FROM : Executive Director - Children’s Services Deadline date : End of November 2011 to enable overall timetable to be achieved The Cabinet Members in consultation with the Executive Director - Children’s Services; Executive Director – Resources and Solicitor to the Council are requested to:
1. Authorise the build of a new Stanground College up to the value of the budget sum of £22.4m.
2. Authorise off-site highways works required in accordance with planning conditions up to total value of £250k. The off site highway costs will be included in the final contract price agreed with Kier.
3. Authorise funding for the provision of Information and Communications Technology (ICT) at £800 per pupil and a total cost based on 1770 pupils of £1.416m.
4. Authorise the re-phasing of the capital budget for secondary schools, including bringing forward the associated revenue costs of £70k, £687k, £942K, £62k and (£28k) in 2011/12, 2012/13, 2013/14, 2014/15 and 2015/16 respectively, as outlined in this document.
5. Approve the variation to the design and build lump sum option contract with Kier Regional Limited (trading as Kier Eastern) to include the new build of Stanground College.
6. Authorise entering into a Memorandum of Understanding with the contractor Kier, in order to record and agree as to the reimbursement of costs in the event that the project does not achieve financial and commercial close and does not go ahead. This cost is £1.372m.
1. ORIGIN OF REPORT
1.1 This report is submitted to the Cabinet Member for Education, Skills and University and Cabinet Member for Resources following a referral from the Executive Director - Children’s Services.
1.2 This decision is further to:
• the approval by the Chief Executive in consultation with the Executive Director - Children’s Services, Executive Director – Resources, Solicitor to the Council, the Cabinet Member for Resources and the Cabinet Member for Education, Skills and University, on 15 September 2010 to appoint Kier Regional Limited (trading as Kier Eastern) under a design and build lump sum option contract to build the new Ormiston Bushfield Academy.
• the cancellation of the Building Schools for the Future (BSF) programme in July 2010 and the subsequent work undertaken to ascertain the feasibility of completing the build project(s) using Council capital, and which was agreed as the way forward by the Chief Executive and The Leader of the Council on 31 March 2011.
• the subsequent issue of a Future School Notice (FSN) to Kier dated 14 April 2011 inviting Kier to submit a Future School Proposal (FSP) for Stanground College pursuant to Schedule 19 of the Design and Build Contract Lump Sum Option (incorporating Batched Schools Option) made between Peterborough City Council (the Authority) and Kier Regional Limited (the Contractor) dated 23 September 2010.
2. PURPOSE AND REASON FOR REPORT
2.1 The purpose of this report is to obtain the Cabinet Members approval in relation to:
- the new build of Stanground College - the re-phasing of the capital budget - the variation of the design and build lump sum option contract between PCC and Kier Regional Limited (trading as Kier Eastern) to build the new Stanground College - the authorisation to enter into a Memorandum of Understanding with Kier.
2.2 This decision is proposed in accordance with the delegations for the Cabinet Member for Education, Skills and University exercising delegated authority under paragraph 3.3.7 of Part 3 of the constitution in accordance with the terms of their portfolio at paragraph 3.6(b) and the Cabinet Member for Resources exercising delegated authority under paragraph 3.3.7 of Part 3 of the constitution in accordance with the terms of their portfolio at paragraph 3.9(b), (f) and (k).
3. TIMESCALE
Is this a Major Policy NO If Yes, date for relevant Item/Statutory Plan? Cabinet Meeting
4. BACKGROUND
4.1 Stanground College was due to be rebuilt under the Building Schools for the Future (BSF) programme until it was cancelled nationally in July 2010.
4.2 The design and build lump sum option contract which the Council entered into with Kier, as agreed with Partnerships for Schools, allowed for the Ormiston Bushfield Academy to be the “sample” school, with Stanground College and Orton Longueville School as “non sample” schools along with any school in the Council’s Primary Capital Programme– which includes a new Welland Primary School. The Council in its procurement for a contractor to build Ormiston Bushfield Academy therefore also procured a contractor to design and build such further schools.
4.3 The process for adding additional schools to the Council’s contract with Kier involves Kier submitting Contractor’s Proposals (akin to a bid) in response to a specification issued by the Council. The Project Team responsible for the evaluation of Kier’s Contractor’s Proposals comprises representatives of Children Services, Legal Services and external specialist technical advisors.
4.4 Once Kier’s Contractor’s Proposals are agreed with the Council a variation to Kier’s contract will be entered into for the build of the new Stanground College.
4.5 It should be noted that:
- It is proposed to build the new Stanground College on the existing school site. The existing sports centre will be retained and refurbished. New changing facilities, a new fitness suite, activity studio and 25metre 6 lane swimming pool will also be built;
- Stanground College is currently a foundation school and therefore owns the land. An Academy Sponsor (Greenwood Dale Academies Trust) has been selected and subject to Department for Education approval the school with effect from to from April 2012 open as an Academy. As part of the Academy conversion process, the land will revert back to Council ownership and will be leased to the Academy Trust;
- A budget has been set of £22.4m for the rebuild of Stanground College. An additional £1.416m has been allowed for ICT and £250k for highway works. These funds are allocated within the Medium Term Financial Strategy (MTFS) (2011/12 – 2015/16);
- When the Building Schools for the Future (BSF) programme was stopped by central Government in July 2010, the Council subsequently re-profiled and deferred its capital schools cash flow forecast in the expectation that the majority of spend would be incurred in 2013/14. The overall capital budget for the scheme was unchanged, it was simply deferred;
- The impact of this deferral was also to reduce the revenue budget that covers the borrowing costs for the entire secondary school programme (ie interest and repayment) in those early years, but to increase it in later years as the repayment is similarly deferred. As the Council has now had the opportunity to bring the scheme forward, it is necessary to alter this profile of spend so that the scheme can proceed as outlined. The change to the profile is outlined as follows:
Re-profiling capital Impact on revenue budget (overall change budget over life of is nil) (£’000) current MTFS (£’000) 2011/12 2,797 70 2012/13 19,602 687 2013/14 -20,006 942 2014/15 -1,535 62 2015/16 -858 -28
- It should be emphasised that there is no change to the overall budget for the secondary school scheme. It is simply re-phasing the budgets. Whilst there are additional costs in 2011/12, 2012/13, 2013/14 and 2014/15 there are corresponding reductions in later years;
- There are no indications from central Government since the BSF programme was stopped with regard to school building programmes and future funding that would enable the Nene Park Academy to be rebuilt;
- The rebuilt Stanground College is required to be open by September 2013 to accommodate an additional 270 pupils on a phased basis. The school will expand to accommodate forecasted growth as a result of the Stanground South development;
- The planning application for the school was submitted on 26 September 2011 and is due to be considered at Planning Committee on 8 November 2011;
- The batched arrangements under the design and build lump sum option contract expire on 31 December 2011. This means the variation to the design and build lump sum option contract with Kier Regional Limited (trading as Kier Eastern) has to be in place by this date; and
- A Memorandum of Understanding has been drafted in order for both parties to agree to the reimbursement of costs incurred by the contractor in the event that the project does not achieve financial and commercial close.
4.6 In order to keep to the overall programme timescale, careful consideration has been given to the decisions that will be required to ensure probity in the process.
4.7 The following milestones and dates should be noted:
- Submission of planning application 26 September 2011 - Contractors Proposals submitted 3 October 2011 - Planning Committee 8 November 2011 - Complete evaluation / negotiation with Kier 11 November 2011 - Variation of Contract finalised 30 November 2011 - Start on site January 2012 - Rebuilt Stanground College opens September 2013
- 5. CONSULTATION
5.1 In addition to the Ward Councillors briefings held prior to the cancellation of the Building School for the Future programme, a briefing meeting to explain the scheme and introduce the contractor was held with Ward Councillors on 13 June 2011, they expressed their support for the scheme.
5.2 The school has been fully involved in the development of the specification and design for the new building. An Academy sponsor was selected by the governors of Stanground College week ending 8 th July 2011. The sponsor, Greenwood Dale Foundation Trust has since been fully involved in the design for the new building.
5.3 The Leader of the Council and the Cabinet Member for Education, Skills and University were fully briefed on the developing scheme on 11 July 2011.
5.4 A public exhibition took place on 19 July 2011 at the school where the design for the new building was on display for the public, parents, students and staff.
5.5 Key stakeholder departments within the Council are fully briefed on the proposals. These include Planning Department, Strategic Finance and Legal Services.
5.6 A presentation of the design and build proposals to the Cabinet Member for Education, Skills and University and the Ward Councillors was held on 6 October 2011.
6. ANTICIPATED OUTCOMES
6.1 Subject to the evaluation of Kiers Contractors Proposals by the Council’s evaluation team, Kier will design and construct the new Stanground College. Legal Services will put in place the design and build contractual arrangements to reflect this.
6.2 The Programme Summary anticipates construction for the new Stanground College commencing from January 2012 which is necessary to have the new school open for the school year commencing September 2013.
7. REASONS FOR RECOMMENDATIONS
7.1 Stanground College and the Nene Park Academy are the two remaining secondary schools who are yet to have their buildings renewed as part of the secondary school review programme which started in 2003. Both schools were in line to be rebuilt under the BSF programme which was cancelled in July 2010. The Chief Executive and The Leader
agreed to rebuild Stanground College following feasibility work between PCC and Kier to ascertain what could be achieved with Council capital post-BSF.
7.2 If the batched contract arrangements were not to be used this would mean that the Council would have to spend some 3-4 months procuring a contractor to build the new school. Subject to the final Contractors Proposals submitted by Kier the batched arrangement obviates the need for such a procurement exercise and enables the timescales of the project to be achieved.
8. ALTERNATIVE OPTIONS CONSIDERED
8.1 The following options were considered and rejected:
- To do nothing. This option was rejected. The school was in line for a re-build under the BSF programme which was cancelled nationally in July 2010. The existing school buildings are a collection of blocks of differing ages dating back to the 1960’s. Some of the buildings are in very poor condition. The school has experienced significant issues in regards to the maintenance of the building. The school has had to shut several times due to serious flooding. Stanground College and Nene Park Academy are the two remaining secondary schools in Peterborough not to have received capital investment in their buildings as part of the 2003 secondary school review. The Chief Executive and The Leader of the Council on 31 March 2011 agreed that as a result of feasibility work between the Project Team and Kier (following the cancellation of the Building Schools for the Future programme), the project could proceed to detailed design phase and Kier submit their contractual proposal provided the cost was within the funds allocated with the MTFS 2011/12 – 20115/16). A Future School Notice (FSN) was subsequently issued to Kier on 14 April 2011 inviting them to submit a Future School Proposal (FSP) for Stanground College pursuant to Schedule 19 of the Design and Build Contract Lump Sum Option (incorporating Batched Schools Option) made between Peterborough City Council (the Authority) and Kier Regional Limited (the Contractor) dated 23 September 2010.
- Tender separately for the work ie, do not use the batched contract arrangement - If the batched contract arrangement was not to be used this would mean that the Council would have to spend some 3-4 months procuring a contractor to build the new school. Subject to the Contractors Proposals submitted by Kier the batched arrangement obviates the need for such a procurement process and enables the timescales of the project to be achieved.
8.2 The following option(s) were considered and rejected in relation to the funding / borrowing required:
Defer the start on site until January 2013 to align with the cashflow allowed for within the MTFS. This option was rejected for the following reasons:
- The Building Cost Information Service (BCIS) of the Royal Institute of Chartered Surveyors (RICS) is projecting construction price inflation of 3.1% in 2012. The cost to build Stanground College is based on £1,500 per square meter. Assuming inflation of 3.1% this will result in an increased construction cost to build the school of £802k.
- Any delay will result in the Council being required to pay Kier for the design work they have completed to date. This will be approximately £1.372m. Additional Kier, Project Team and advisor costs will also be incurred to validate the design again in 2012.
- Stopping the scheme until 2013 would also mean that the scheme would have to be re- procured as the Council would be unable to use the design and build batched procurement arrangement with Kier. This would not only incur for the Council the abortive design fees of Kier but would also incur further project team and specialist advisor costs.
- The very significant expectations of the College, its pupils, staff and parents of pupils will be adversely affected as a result of deferring the build for one year. The school has been disappointed in the past with the postponement of its proposed build programmes, in particular in 2004/5 at the time of the schools PFI project and again in 2010 when BSF was stopped.
- Since 2003 and the Secondary Schools Review, the buildings at Stanground College have always been considered to be amongst the worse condition of schools in Peterborough. Further delays will continue to adversely impact improvements required in educational outcomes and the schools opportunities for improvement in particular under the guidance of its chosen Academy sponsor, Greenwood Dale Academies Trust.
9. IMPLICATIONS
9.1 The legal and financial implications of this Cabinet Member Decision Notice are set out in the main body of the report.
9.2 Environmental - The specification for the new Stanground College will include a sustainable approach to ensure that the building envelope will exceed current building regulations in terms of air quality, air tightness and energy efficiency.
10. BACKGROUND DOCUMENTS Used to prepare this report, in accordance with the Local Government (Access to Information) Act 1985)
None.