Minutes:
The Committee considered the undernoted report:
“1.0 Purpose of Report
1.1 The Capital Programme is a rolling programme of investment which either improves existing Council facilities or provides new facilities. This report provides an update on –
§ proposed recommendations for movement between the Capital Programme stages
§ projects requiring additional resources and/or approval to go to tender
§ proposals in relation to next steps for the Capital Programme including the potential for the placing of a moratorium on any new
This report should be read in conjunction with the ‘Investment Programme – Half Year Update’ report which is also on the agenda at today’s meeting as this contains an update and photos of capital projects which have been completed or which are underway/planned. As highlighted the Property & Projects department is happy to arrange site visits for Members/ Party Groups to Council funded capital project (capital programme, LIF and emerging BIF).
2.0 Relevant Background Information
Rolling Capital Programme 2013/14 onwards
2.1 Members have agreed that all capital projects must go through a Stage process where decisions on which projects progress are taken by SP&R. This provides assurance as to the level of financial control and will allow Members to properly consider the opportunity costs of approving one capital project over another capital project. Importantly it will also enable Members to focus on delivering the projects which can have maximum benefits and investment return for the city and local areas.
2.2 Members are aware that the Capital Programme (as agreed by Committee on 22nd March 2013) has been reconfigured to reflect the 3 approval stages as agreed –
§ Committed projects (Stage 3) - projects which have completed a Full Business Case (FBC) and where approval has been obtained by SP&R to proceed to tender. There are 4 Tiers under this Stage including –
§ Project which are completed (Stage 3 - Tier 3);
§ Projects which are at construction stage (Stage 3 – Tier 2);
§ Projects at tender preparation stage (Stage 3 – Tier 1) or
§ Schemes at risk (Stage 3 – Tier 0) – which are normally schemes seeking external funding and are still awaiting letters of offer (LOO) (i.e. ERDF applications) but that need to be progressed to tender preparation stage in order to meet tight funding deadlines or projects which have outstanding project issues to resolve. Members are asked to note that no construction contracts will be awarded on these projects until a LOO is in place or that any other outstanding issues have been resolved
§Uncommitted projects (Stage 2) –projects where a Strategic Outline Case (SOC) has been agreed by Committee and work on the project is being progressed through the development of an Outline Business Case (OBC), but they have not yet been developed to a stage where permission could be sought from SP&R to proceed to tender.
§ Emerging proposals (Stage 1) –proposals which require completion of an SOC before they could be considered further by SP&R Committee.
3.0 Key Issues
Capital Programme – Proposed movements - Projects recommended to move up a Stage
Proposed movements from ‘Stage 2 – Uncommitted’ to ‘Stage 3 – Committed’
3.1 It is proposed that the projects outlined in Table 1 below are advanced from Stage 2 – Uncommitted to Stage 3 – Committed and are advanced to tender preparation stage. Members are asked to note that the costs cited are pre-tender estimates only. These costs will be challenged and assessed at the tender preparation stage and any significant changes will be brought back to Committee.
|
Project |
Project overview |
Proposed Stage |
Estimated Gross Cost |
Estimated Net cost |
|
Whiterock Community Corridor |
Part of the wider Falls Park Masterplan. This project will redevelop the 0.7 acre vacant site at the front of the Whiterock Leisure Centre for provision of facilities for local community groups and enhance the wider open area of the site with environmental improvements including a new playground; new fencing and new access points. The project also includes wider infrastructure for the site. This project is linked to two other Council funded project – the new pitch and pavilion at Falls and the Glor Na Mona LIF project which will be on site in 2014 |
Stage 3 (Tier 0) |
Up to a maximum of £1.7million |
To be confirmed subject to other funding sources |
|
Commercial Waste Bin Weighing system |
The procurement of bin weighing hardware, to be installed on 8 waste refuse collection vehicles, as well as a software management system from which reports can be generated on the tonnage of waste collected. |
Stage 3 (Tier 1) |
Up to a maximum of £200,000 |
Up to a maximum of £200,000 |
3.2 Whiterock Community Corridor – it is proposed to move this to Stage 3 – Tier 0 (Schemes at risk). Members are asked to note that this project is part of the wider Falls Park Masterplan. It also has major inter-dependencies with two other Council funded projects - the new Falls Parks pitch and pavilion which is currently a Stage 3 project on the Capital Programme (this scheme is at tender preparation stage) and the Glor Na Mona LIF project (WLIF025) which is going on the same site. Both these projects are due to go on site in 2014 and progressing these projects together will help to minimise costs and overall interruption to the site as works are undertaken. Members are asked to note that £1,700,000 is the maximum available to this project. External sources of funding which could contribute to the overall costs of this project are currently being explored. Members are therefore asked to note that this project will remain ‘at risk’ until the Director of Finance & Resources confirms that this project is within the affordability limits of the Council (subject to the outcome of any external funding). In the interim, progressing this project to tender preparation stage will allow designs to be fully worked up and will enable the project to be advanced to a state of readiness for planning. Members are asked to note that NO construction contracts will be let until all outstanding issues have been resolved.
3.3 Commercial Waste Bin Weighing system – It is proposed that that this is moved to Stage 3 – Tier 1. Members are asked to note that £200,000 is the maximum available to this project. The Director of Finance & Resources has confirmed that this project is within the affordability limits of the Council.
Proposed movements from Stage 1 – Emerging Projects to Stage 2 – Uncommitted
3.4 It is proposed that the projects outlined in Table 2 below are advanced from Stage 1 – Emerging Projects to Stage 2 – Uncommitted. A Strategic Outline Case has been completed for each of these which has examined (i) Background to the project; (2) Feasibility; (3) Affordability; (4) Deliverability and Sustainability. Members are asked to note that at SOC level the affordability of a project is only examined at a very high level and this is tested and challenged further during Stages 2 and 3.
|
Project |
Project overview |
Proposed Stage |
|
Alleygates – Phase 4 |
Phase 4 – Strand 1 – the installation of alleygates in known crime and ASB ‘hotspots’ across the city |
Stage 2 |
|
Boxer Sculptures |
The design and installation of 3 sculptures in 3 council owned parks across the city which will recognise the contribution of boxing to the city |
Stage 2 |
|
Falls Parks Service Yard |
Development of a serviceyard/both in Falls Park. Part of the Falls Park Masterplan |
Stage 2 |
|
MUGA programme (New and refurbishments) |
Development of a MUGA programme to look at both new and refurbishments of existing MUGAs across the city |
Stage 2 |
3.5 MUGA programme – Members are asked to agree that £30,000 is set aside out of the Feasibility Fund in order to help develop up this Programme. Further details on this will be brought back to Committee in the New Year.
Projects requiring additional resources and/or approval to go to tender
3.7 Creative Hub – As Members are aware the Council is pursuing an application under ERDF for the development of a creative hub facility to help support the development and growth of the film, television, music and digital content sectors within Belfast. It is envisaged that this will be a refurbishment of an existing building. Members will recall that they agreed in June 2013 that the Creative Hub project would progress ‘at risk’ in order to progress the design to meet the tight ERDF deadlines. The Council has continued to work on this project to progress it to a level where it is ready to commence as soon as possible after a Letter of Offer is received in order to ensure successful delivery of the Hub. This will now require design up to RIBA Stage D and to facilitate this it is recommended that £150,000 is allocated to this project ‘at risk’. These costs will be recovered if a Letter of Offer is received. Members are asked to note that the Creative Hub project does not have any prior allocation of ‘at risk’ monies.
3.8 Fleet Replacement Programme – Members will know that the Council needs to run and maintain a substantial fleet in order to deliver its services. However Members may recall that a recent external consultancy review of the Council’s Fleet Management recommended a significant reduction in the size of fleet and that a comprehensive fleet replacement policy and programme should be developed. The updated fleet replacement policy was agreed by Committee in September and at this stage Members were updated that discussions were ongoing with departments in relation to the specific assets which will be included in the reduction exercise. Members were also updated at this stage that been very little fleet procurement activity since at least 2010/11 because of the external review.
3.9 As a result a significant proportion of the Council’s fleet is now out-of-life on the basis of the revised vehicle replacement policy adopted by the Committee in September and there is now a need to begin a fleet replacement programme for the remaining 80% of vehicles which are not included in the reduction exercise set out above.
3.10 However, as no fleet procurement has taken place for several years the Council has no subsisting contracts with suppliers of the various types of vehicles required, and will need to invite tenders across most of the categories comprising the fleet. Approval is therefore sought to initiate the necessary procurement processes for the 26 categories of vehicle (as outlined in Appendix B) for the Fleet Replacement Programme in order that suppliers will be available and orders can be raised as soon as the capital provision is agreed. However no contracts will be awarded until all outstanding issues have been resolved and the project is confirmed as being within affordability limits by the Director of Finance and Resources.
3.11 Members are also asked to note that all the specifications will, on foot of a further HBC recommendation, be validated through the use of an independent, external ‘critical friend’ before any tenders are invited. This is intended to ensure that technical criteria are appropriate in the light of prevailing market trends, that competition is encouraged through the use of open specifications and that any mandatory features specified do not unduly distort or deter competition. Tenders will also be sought on both an outright purchase and leased basis in order to ensure that all options are explored in terms of value for money.
4.0 Capital Programme – Next steps Proposed temporary moratorium
4.3 It is proposed that Members consider placing a temporary moratorium on any new projects being added to the current Capital Programme until March 2014. There are also a number of benefits to doing this –
- Members are aware that the Council is currently trying to deliver a major physical programme under its Investment Programme with over 70 projects on the Capital Programme, 19 emerging BIF projects and nearly 70 LIF projects – many of these projects are major both in terms of their scope and size and are also up against tight timescales in terms of their delivery due to external funding deadline. The ongoing addition of new Emerging projects is impacting on the progress of delivery of agreed schemes. Members are asked to note that delivery on the ground of projects was limited in 2102 due to time taken to put the necessary resources in place. The pace of delivery has increased significantly in 2013 however there will be even more project at the ‘on the ground’ stage in 2014/15 as letters of offer are received and other projects with outstanding issues are resolved (e.g. the Pitches Strategy). Consequently the level of expenditure, risk and effort will also increase significantly. Placing a temporary moratorium on any new projects on the Capital Programme will allow officers to concentrate on the successful delivery of the projects currently on the Programme
- Members are also aware that the Council is embarking on a once in a lifetime, challenging leisure transformation programme which will have associated financial and officer resource implications
- Members will also acknowledge that the implications of the Social Investment Fund are currently unknown due to the ongoing delays in agreeing projects. However if decisions on these projects are taken in the coming months this may have associated implications for the Council who is the proposed delivery agent for many of the capital projects across the Belfast zones. The projects again have tight timescales for delivery and many are major in scope and scale
- As highlighted there are limited resources available and an increasing demand on the Council to deliver more projects under all its capital streams. Members have already agreed the need for the development of area plans and also the ongoing need to take the requirements of the city centre into consideration. This is all within the context of the emerging responsibility for community planning which the Council will assume under LGR. The development of such plans would help Members to use their civic leadership role and continue to best facilitate the shared political ambition by delivering those projects which will have maximum benefit at a local and city level. It will also help with prioritisation of projects as there is an opportunity cost of investing in one project over another. Imposing a temporary moratorium will give Members time to concentrate on the development of these plans and an opportunity to reflect on the outcomes that they wish to see for their areas and the wider city. As outlined in the ‘Area Working Group’ Update report which is also on the agenda for today a planning workshop was held with the Inner South NRP in October and it is intended to hold similar sessions in the coming months in Falls/Lower Divis and Andersonstown. The outcomes of workshops such as these, together with other masterplans which are being led by DSD and the various NRP plans which are already in place, can provide a nucleus for the development of area frameworks which in turn can help inform Members’ investment decisions.
- importantly a temporary moratorium at this stage will also allow the Council an opportunity to fully consider the impact of the new boundaries under Local Government Reform. This will necessitate a new Council Capital Programme from 2015 onwards which takes into account the extended Council area. Placing a hold on any additional new projects at this stage will allow the Council sufficient time to plan for this and for a new Capital Programme for the extended Council area in 2015 to be developed.
4.4 Members are asked to note that in this interim period there may be exceptions where work will need to be progressed on a capital project either for health and safety reasons or as a result of a statutory requirement. Committee will be advised of these exceptions as required.
5.0 Recommendations
5.1 Members are asked to –
· agree if they wish to progress the projects as outlined in Table 1 (3.1 above) to move from Stage 2 -Uncommitted to Stage 3 – Committed and agree that these projects are advanced to the invitation of tenders, to be awarded on the basis of most economically advantageous tenders received and full commitment to deliver
- Whiterock Community Corridor agree to move this to Stage 3 – Tier 0 (Schemes at risk). Members are asked to note that no construction contracts for this project will be let until all outstanding project issues have been resolved. Members are asked to note that £1.7m is the maximum amount available to this project and that potential avenues for external funding towards these costs are being explored
- Commercial Waste Bin Weighing System - agree to move this to Stage 3 – Tier 1. Members are asked to note that £200,000 is the maximum available to this project
· agree if they wish to progress the projects as outlined in Table 2 (3.4 above) to move from Stage 1 –Emerging Projects to Stage 2 – Uncommitted. Members are asked to note that at this stage this does not constitute a decision to invest in projects.
- MUGA Programme (New and refurbishment) – Members are asked to agree that up to £30,000 out of the Feasibility Fund be set aside to help with the development of this programme and further detail on the planned programme (new and refurbishments) will be brought back to Committee in the New Year
· approve an allocation of £150,000 ‘at risk’ towards the Creative Hub project prior to confirmation of funding in order to progress design work and ensure this project is ready for tender to meet the funding timescales.
· Fleet Replacement Programme – approve that this is advanced to the invitation of tenders, to be awarded on the basis of most economically advantageous tenders received
· consider placing a temporary moratorium on any new projects being added to the current Capital Programme until March 2014. This will allow officers the opportunity to concentrate on the successful delivery of the vast array of projects which are already on the capital programme and the other physical programmes including the Local Investment Fund, Belfast Investment Fund. As previously highlighted there is growing demand on the Council to deliver projects within increasingly scarce financial resources. Imposing a temporary moratorium will allow Members the opportunity to consider all projects and their overall prioritisation and to begin to and will help enable the Council to start to pre-plan for a new Capital Programme for the extended Council area in 2015. Members are asked to note that there may be exceptions to this and there may, in the interim period, be times where work will need to be progressed on a capital project either for health and safety reasons or as a result of a statutory requirement or for another reason. Committee will be advised of these exceptions as required. An update report on the Capital Financing strategy will be brought back to Committee in early 2014.”
The Committee adopted the recommendations.