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ITEM CA16
DRAFT
CABINET
– 19 JULY 2005
MANAGEMENT
OF CAPITAL PROJECTS
The Cornmarket
Street Reconstruction Scheme Oxford City Council & Oxfordshire County
Council Joint Scrutiny Review Joint Response of the Two Councils
Introduction
- The Joint Scrutiny
Review reported in February 2005. The final recommendation of the Review
was for the two authorities to produce a joint response to the report,
including an action plan, for consideration by the end of July 2005.
This paper represents the joint response with the action plan attached
(download as .doc file).
Overview
- The review is
welcomed as providing an explanation as to why the scheme took so long
to complete and cost more than originally estimated. The independent
review was thorough and fair and all the recommendations have been accepted.
- Both the Councils
were very concerned about the delays and the increased costs incurred
by the project. A number of reasons were identified for things going
wrong, among them being an insufficient evaluation of potential risks,
unforeseeable events, and time pressures to start the works on site.
Both Councils are determined to ensure that the recommendations are
fully implemented and that their project management disciplines include
processes designed to prevent the problems which occurred on the Cornmarket
scheme.
- Cornmarket has
been a complex project. Both Councils have been involved in making decisions
on particular but different aspects of the scheme. The project has also
involved Council staff, specialist advisors and the firms contracted
to design, manage and build the scheme. It has been recognised in the
review that there was no negligence or dereliction of duty and that
no one individual was to blame.
- It should not
be forgotten that there were some good practices carried out during
the project. The transfer of the contract after the initial contractor
went into receivership and the decision to go to mediation to avoid
legal expenses are highlighted in the report. There have also been some
good outcomes from the scheme. Cornmarket has been considerably improved
and the underground services are now in much better order. Indeed, throughout
the period of the project, the street was never closed and its businesses
continued to operate.
- There are examples
of good project management in each authority. Within the City Council
the Ferry Sports Centre was completed on time and below the estimated
cost. Within the County Council Marcham Road, Abingdon, and Saxton Road
Home Zone, also in Abingdon, were large and difficult transport projects
delivered to time and budget. The re-organisation of City Schools was
a major and complex programme of works across all of the schools in
the City that was completed on programme and on budget.
Action
Plan
- A significant
proportion of the problems with the scheme emphasised the need for good
project management disciplines.
- With regard to
the County Council’s project management for transport schemes, much
of what is called for in the recommendations is already set out in the
Transport Schemes Project Manual. This heightened emphasis on project
management resulted from a Best Value Review of construction procurement
which reported in 2002. That Review also included property construction
and their project management arrangements also include similar requirements
to those used in transport schemes.
- With regard to
the City Council’s Capital Programme, many of the recommendations on
project management are in place. The Council has embraced Prince 2 principles,
instigated Project Boards to monitor major capital projects and involved
developers early in collaboration to identify, share and mitigate risks.
Regular updates have been provided to the Executive Board on the overall
programme and individual projects. The City Council has also benefited
greatly from appointing external project managers who brought specialist
knowledge, experience of the construction industry, design and project
management assistance.
- As a consequence
of the improvements to working practices that have already taken place
following the scheme, the action plan (attached) identifies what is
already in place that addresses the recommendation, with a separate
section identifying what further action is outstanding/required.
- Clearly the action
plan needs to be implemented. Performance indicators for construction
time, cost and satisfaction for both transport and property schemes
are already in place as part of both Council’s contracts with their
suppliers. Reporting on performance as part of regular monitoring arrangements
will provide evidence as to the success of the measures already in place
and the further measures (as set out in the action plan) yet to be implemented.
Conclusion
- The independent
Joint Scrutiny report is welcomed as an explanation of the delays and
increased costs. Both Councils sincerely regret the problems that occurred
during the Cornmarket project, and recognise that the delivery of this
key project fell far short of what the public of Oxford and Oxfordshire
deserve. The lessons learnt during this project, and the welcome report
from the Independent Scrutiny Panel, have helped to identify what went
wrong and how to put it right. Both Councils are determined to resolve
the failings highlighted by the review and implement the action plan
to address the recommendations in the report.
KEITH
MITCHELL
Leader Leader
ALEX HOLLINGSWORTH
Oxfordshire
County Council Oxford City Council
July
2005
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