AGENDA ITEM NO. 8 CABINET 6 MAY 2014 21st CENTURY SCHOOLS – FULL BUSINESS CASE FOR PHASE 1B – 3 PRIMARY SCHOOLS Report Submitted by: Dermot McChrystal, Interim Head of Education Services Report Written by: John Tushingham, Head of Access, Engagement and Performance & Steve Tong, Project Manager 1. Areas Affected 1.1 Oakfield, Llantarnam, Cwmbran and Griffithstown areas of Torfaen. 2. Purpose of Report 2.1 To seek approval to submit the Full Business Case (FBC) to Welsh Government for Phase 1B of Torfaen‟s 21st Century Schools Programme which will see the replacement of Blenheim Road Community Primary School, Llantarnam Community Primary School and Ysgol Panteg. 3. Key Messages 3.1 The next stage of the process requires the submission and approval of the FBC, the main elements of which are detailing the procurement route and establishing the cost ceiling. 3.2 As with the Outline Business Case (OBC), the FBC has been prepared on the basis of all three schools being procured at the same time to achieve best economies of scale. 3.3 The revised cost of the 3 schools combined is to a ceiling funding limit of £20,500,000 which reflects the drive from Welsh Government to minimise new- build costs and the fact that 2 of the schools are 315 places now, not 420 places. 3.4 The procurement process will start following this report, with issue of the tender documents, but appointment of the contractor will not take place until after FBC approval and subject to a further cabinet report. 4. Background 4.1 Welsh Government has approved the projects to go forward to the FBC on the basis of the following sizes: • Ysgol Panteg – 420 places • Llantarnam Community Primary School – 315 places • Blenheim Road Primary School - 315 places 4.2 The approved March 2014 cabinet report gave the go ahead for statutory closure consultations to commence in relation to the current Ysgol Panteg and Llantarnam Community Primary School sites, and informal consultation to be carried out in relation to Blenheim Road Community Primary School. 4.3 As noted in the March 14 cabinet report, the target delivery date has been revised to September 2016. 5. Issues and Findings 5.1 The approval of the OBC enables us to proceed with consultations and to look in more detail at the best available procurement routes for the revised target date of September 2016. 5.2 Submission and approval of the FBC will complete the Five Case model process for final funding approval by Welsh Government for the capital projects. 5.3 Changes from the OBC to the FBC are outlined in the following sections and include responses to feedback received by Welsh Government on the OBC and further information which is required for the FBC to satisfy the guidelines for completion. 5.4 The Strategic Case The overall strategy remains unchanged. Updated sections include: Key Stage core subject indicator data for Torfaen and national averages ICT strategy energy and emissions performance school design strategy a new outcomes/benefits table template from Department for Education & Skills, focusing on fewer, but SMARTer objectives revised risks, constraints and dependencies sections 5.5 The Economic Case The purpose of the economic case was to appraise the short listed options to determine the preferred option for each school. The preferred options of three 420 place primary schools was not supported by Welsh Government, but instead they have agreed to go forward with 420 places for Panteg, 315 places for Llantarnam and 315 places for Blenheim Road. A section at the end of the economic case has been added to reflect this decision. Whist the case for 420 place schools in each location was not accepted, the council is still aiming to secure a flexible design approach that would allow further expansion of the two 315 place schools. The impact on the design of the schools procured would be to build the 315 place schools with common areas such as the hall, kitchen and toilets sized for a 420 place school. This is to mitigate the risk that currently unplanned but predicted, by virtue of their inclusion in the Local Development Plan, long term housing developments occur in those areas and demand exceeds capacity. The impact on cost of doing this is highlighted in the Commercial and Financial Cases. 5.6 The Commercial Case The Commercial Case has been updated to reflect: the procurement options considered and preferred route chosen which is the SEWSCAP framework (South East Wales Schools Capital Working Group), „Design and Build‟ involving a competition among 5 main pre- selected contractors. The preferred route will achieve a combination of best value for money and best delivery. the selection criteria by which the preferred contractor will be chosen that the procurement process will begin immediately after cabinet approval. the revised ceiling price for the 3 schools is £20,500,000, including professional fees. the price of £20,500,000 includes £739,000 for the extra space in common areas in the 315 place schools to future proof expansion to 420 places. Reference to and inclusion of an appendix focussing on Community Benefits – the „Value Wales Toolkit „ 5.7 The Financial Case This now reflects that in capital terms, under the revised criteria, the costs of the 21st Century Schools Programme are to be shared 50:50 on each scheme by the council and Welsh Government and therefore now amount to a revised ceiling of £10,250,000 each in this instance. The funding source for the council‟s contribution is re-affirmed i.e. a combination of capital receipts, core capital, and prudential borrowing. 5.8 The Management Case This has been revised to: provide more detail for Welsh Government on how the project will be managed reflect the revised delivery programme for the projects for a new implementation date of September 2016 including capital and transition elements managed by Neighbourhood Services and the Education Service respectively. 5.9 The following table shows the outline milestone plan for the project going forward. Dates are indicative only to show the relative time periods and are subject to change. Milestone Activity Date Consultation Process 12 May to Statutory and informal consultations 23 June 14 Cabinet receives report on outcome of consultation and 8 July 14 agrees to publication of statutory notices If approved by Cabinet, the publication of statutory notices 8 September 14 (If not approved new or amended proposals would be required and would be subject to further approvals.) End of objection period 6 October 14 Final decision on proposals End October 14 Full Business Case Approval Write FBC complete Submit FBC (with pre-tender cost estimates) May 14 Anticipated approval of FBC to ceiling price by Welsh Government and issue of grant letter, which will be September 14 subject to Cabinet approving the closure proposals Design and Construction Out to tender, (Design and Build) June 14 Contractor appointment Sept/Oct 14 Planning Applications January 15 Planning Approval March 15 Start on site June 15 Completion date June 16 Client fit out July 16 Operational August 16 6. Consultation 6.1 Following approval of the March 14 cabinet report, consultation relating to these proposals is due to commence on 12th May 2014. 7. Policy Impact Assessment 7.1 A Policy Impact Assessment (PIA) screening tool is attached as Appendix 1. The impacts are predominantly positive. In terms of the significant impacts: 1. The proposals will impact significantly in the communities served by the three schools. 2. The nature of the impact will be in the form of 21st Century Learning facilities and sufficient capacity to meet future demand. 3. Children and young people will benefit from the improved facilities but there will also be benefits, for example, in terms of improved energy efficiency of the buildings. The analysis of benefits is a theme that runs throughout the OBC and which will be reviewed again in the FBC. A range of activity will be necessary to secure and enhance the positive impacts and reduce the negative impacts, not least where they represent a risk to the project. 8. Risks 8.1 The risk register has been updated in the FBC. 8.2 Ultimately, if the new build proposals do not proceed there is serious risk of school building failure in the two English medium schools and a shortage of Welsh medium primary provision. 8.3 There is a risk that Welsh Government will not approve match funding for the additional £739,000 to allow for future expansion of the 315 place schools. If this happens, Cabinet will be advised and their view sort on actions to be taken, i.e. continue with full funding provided by the Council, or remove the “future expansion” proposals to retain the 50:50 funding profile with Welsh Government. 9. Action to be taken following decision 9.1 Submission of the FBC to Welsh Government. 9.2 Commencement of procurement process with issue of tender documents. 10. Measures of success 10.1 The following Corporate Plan priorities will be progressed as a result of the proposals in this report: Safeguarding children, especially those with additional educational needs and supporting positive attitudes towards education. Supporting families and children living in poverty to get through recession. Using resources wisely, to include maintaining the highway infrastructure and reducing energy consumption and waste. Progress will be in the form of delivery against the revised outcomes/benefits table of investment objectives listed in the FBC. 11. Recommendations 11.1 That cabinet gives approval to submit the Full Business Case for the replacement schools within a revised funding ceiling of £20,500,000 which includes the future proofing of the 315 place schools for expansion up to 420 place schools.