Meeting documents

ITEM EX15

EXECUTIVE – 11 DECEMBER 2001

REPAIR AND MAINTENANCE OF BUILDINGS : PROPOSED

REVENUE BUDGET 2002

Report by Director of Environmental Services

1. This annual report:

1. reports on implementation of the County Council’s new property information database and the completion of assessed need surveys;
2. explains future arrangements for the repair and maintenance of the County Council’s Homes for Older People;
3. sets out a proposed apportionment between services for the available repair and maintenance budget;
4. explains how the current national shortage of skilled construction personnel is affecting the delivery of repair and maintenance services to County Council premises and what action is being taken in mitigation.
   
   

Assessed Need

2. Recording and collating assessed need survey data is taking much longer this year than in previous years as survey data for primary, secondary and special schools is being recorded (for the first time) on the County Council’s new ‘Genesis’ property information system. Historic survey data has to be transferred to the new system.
3. As a result, it will not be possible to produce an accurate assessment of the total assessed need for repairs to County Council buildings for 2002/03 before February 2002.
4. Preliminary indications are that there is unlikely to be a significant increase and that the final figure will be similar to that reported last year.
5. The assessed need for schools delegated repairs for 2001/02 was £21.2m.

Base Budget Provision

6. The total base budget for 2001/02 is £5,778,100 including funds proposed to be delegated for non-structural repairs to Social Services, Cultural Services and Environmental Services (Highway Depots) properties.
7. The base budget has been adjusted for inflation of 2.4% as advised by the County Treasurer and the effects of the 2001/02 Policy and Budget Plans.
8. The proportion of the budget available for programmed repairs has been apportioned between services in accordance with highest priority assessed need (using last year’s assessed need data). Any adjustments to the apportionment necessary to reflect results of 2002/03 surveys will be reported to a future meeting of the Executive.
9. Annex 1 is a statement showing the base budget provision.



  Transfer of Homes for Older People to the Oxfordshire Care Partnership

10. With effect from 1 April 2002 it is intended that the Oxfordshire Care Partnership (OCP) will be responsible for the repair and maintenance of all of the County Council’s Homes for Older People. The cost of repairing and maintaining the homes will be re-charged to the County Council by OCP.
11. It is therefore likely that a proportion of the non-delegated repair and maintenance budget equivalent to the potential provision for repairs to Homes for Older People in 2002/03 (£316,200) will be transferred to Social Services to cover these costs.
12. Annex 2 is a statement showing the proportion of the repair and maintenance budget that may be transferred.
13. Annex 3 (dowload as .rtf file) summarises the proposed allocation of the remaining base revenue budget by service, based (for the time being) on the previous committee programme areas.

Combined Assessed Need Statement and Proposed Programme of Repairs

14. A copy of the 2002/03 Combined Assessed Need Statement and Proposed Programme of Repairs will be placed in the Members’ Resource Centre as soon as it is available early in 2002. Relevant extracts from it will be passed to programme departments for comment.

New Deal for Schools Initiative (NDS) Condition Improvement Grant

15. As mentioned in last year’s annual report, following appraisal of the Schools Asset Management Plan, the Council was awarded a grant of £10.4m over three years (2001-02 to 2003-04) for ‘Condition Improvements’ to school buildings. A substantial proportion of this money will be spent on replacement of HORSA buildings. The balance of the grant, approximately £4.48m, will be spent on highest priority (LEA responsibility) repairs to school buildings. This grant provision is welcome and should help to mitigate any potential increase in the backlog of repairs to schools.
16. During the current financial year, repairs to the value of £1.03m have been funded from the grant.

‘Raising Our Performance’

17. Raising Our Performance, the County Council's Strategic Action Plan refers to the serious consequences of under investment in the Council's buildings. The Action Plan includes development of a four year building improvement programme to improve working conditions for councillors and staff.
18. The internal condition of buildings has deteriorated because it has been essential to rigorously prioritise repairs and ensure that available funds have been used to carry out the essential works needed to keep buildings safe, structurally sound and open for business. There is an accumulated backlog of high priority maintenance. Improvements to working conditions is a priority but there will be very limited room within the existing budget to do anything other than continue to deal with the very highest priority needs. An effective programme to improve working conditions would need additional funding over the four years.

Construction Industry Skill Shortage

19. An increasing number of local and national building and building services contractors have expressed their concern to officers about the acute shortage of skilled trades personnel that currently exists with in the construction industry.
20. The Construction Industry Training Board research paper ‘Construction Employment and Training Forecast 2001-2005’ (January 2001) predicts skill shortages particularly in the South East of England for the next four years (if the general level of employment is maintained and recruitment to the industry falls below the forecast annual requirement of 74,000). ‘Skill shortages will appear most acute in the largest occupations, such as carpenters & joiners, bricklayers, plumbers and electricians because of the sheer numbers involved. Geographically, the problem will be worse in the southern regions, where unemployment is below the national average while construction activity is expected to increase at a faster rate than in the rest of the country’.
21. Locally the skill shortage is evidenced by the failure of an increasing number of contractors to respond to tender invitations, complete repairs within agreed time scales and submit accounts promptly.
22. Action is being taken to mitigate the effects of the skill shortage. Following consultation with a representative group of contractors that the Council employs regularly, preparations are being made to re-let all Measured Term Contracts.
23. Measured Term Contracts effectively operate as ‘call-off’ contracts and building and engineering repair work is priced against schedules of pre-determined rates or unit costs. The contracts are of maximum three years duration.
24. The new contracts will be let initially for a period of three years, with provision for extension by one-year increments to a maximum of five years. Extension of the contracts will depend on the quality of service provided by contractors during the first three years. Contractor performance will be measured against a number of performance indicators and the contract conditions will allow the Council to determine any contract (without detriment) if the quality of services provided isn’t acceptable.
25. It is intended that repair work will generally be priced on a ‘labour plus materials’ basis rather than against a schedule of rates. Costs of higher value projects will be subject to negotiation. All of the new contracts will be in place by 1 April next year.
26. The new contracts will:

• Set clearly defined performance targets for contractors
• Simplify the pricing of work
• Allow longer-term ‘partnerships’ to be established

27. Benefits to the Council should include:

• Improved labour availability
• A more responsive and reliable service

28. It is intended that the new contracts will embrace the ethos of reform for the construction industry, set out in Sir John Egan’s 1998 report ‘Rethinking Construction’.



Delegated Non-Structural Repair and Maintenance

29. It is proposed that the proportion of the budget delegated for non-structural repair for Cultural Services, Social Services and Environmental Services (Highway Depots) remains at 15% of the respective budget for each of these services for the forthcoming financial year.

Consultation

30. In previous years the Operations Sub-Committee referred relevant parts of the Schedule of Assessed Need and Proposed Programme of Repairs and Maintenance of County Council Buildings to programme committees for their comments.
31. It is proposed that this year and in future years, relevant parts of the Assessed Need Statement and Proposed Programme of Repairs will be passed to Council departments for their comments. The Executive are asked to consider whether they wish to receive a formal report of any comments made or whether comments should be fed back to individual portfolio holders. Minor alterations to the proposed programme of repairs are often necessary, but they rarely affect the apportionment of the repair and maintenance budget between services.

Financial Implications

32. As a result of under-funding repairs and maintenance, the Council continues to spend a disproportionate amount on relatively expensive reactive repairs. WS Atkins have been instructed to complete all work in the 2001/02 repair and maintenance programme (in previous years programmed maintenance has been deferred in order to fund urgent works in excess of budget provision). It is likely that an overspend on urgent works of approximately £1m will occur this financial year if all needs are met. This will be managed within existing budgets this year. However significant additional base budget funding is essential to avoid this happening in future years.



Environmental and Staff Implications

33. Some of the key environmental and staff implications that result from under-investment in our buildings are highlighted in ‘Raising Our Performance’ (scruffy buildings affect performance, undermine morale and make an adverse statement about the County Council as an organisation).

RECOMMENDATIONS

34. The Executive is RECOMMENDED to:

1. note the predicted budget provision and calculate allocations set out in Annexes 1-3 of the report;
2. agree that the proportion of the budget delegated for non-structural repairs to Cultural Services, Social Services and Environmental Services (Highway Depots only) remains at 15% of the respective budget allocation;
3. agree that the Schedules of Assessed Need and Programme be prepared and circulated direct to Council departments;
4. decide whether comments on the Schedules and Programme should be referred either to:

1. the relevant Executive Members; or
2. a future meeting of the Executive.

DAVID YOUNG
Director of Environmental Services

Background papers: Nil

Contact Officer: Greg Lowe Tel: Oxford 815532

December 2001