Meeting documents

Cabinet
Tuesday, 17 October 2006

CA171006-07

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Division(s): All

ITEM CA7

CABINET - 17 OCTOBER 2006

REVIEW OF PROPERTY ASSETS OFFICE RE-ORGANISATIONS

Report by Head of Property

Introduction

  1. On 20 December 2005 the Cabinet agreed to postpone work on the Review of Property Assets office re-organisations to allow an assessment of the impact of the Shared Services Centre and the Realignment of Directorates. This has now largely been undertaken.

  2. The Review of Property Assets commenced three years ago and involved a review of all the Council’s property with the objectives of making better use of property and specifically achieving a smaller but better quality portfolio, by releasing and reinvesting value from the Council’s assets. Making Better Use of Property was a strategic priority and is now a Resources Directorate priority. The proposals set out in this report would deliver improved and more flexible working environments for staff and improve the delivery of services and ease of management by reducing the number of office locations.

    3. The Strategy

  3. The Strategy is proposed to be undertaken in two phases: 2006 to 2009 and post 2009. The second phase is intended only to illustrate possible long term direction and does not form part of the proposals being recommended to Cabinet for approval. The costs of this phase are not included in the financial appraisal.

  4. Under the first phase many of the Council’s poor quality or unsuitable offices would be disposed, including Macclesfield House; Yarnton House; Tyndale House, Oxford; Shotover View and 61a High Street, Wallingford. The replacement accommodation would provide better quality, more suitable, more flexible and more efficient offices and allow the co-location of staff and partners where appropriate. This very much supports our broader work on organisational development where we are concerned with making the entire organisation fit for purpose, improving its performance and flexibility and readiness to meet future challenges.

  5. The proposals can be split in to the north, Oxford area and south of the county. There remains uncertainty around some of the proposals and where it is significant they are identified below.

    6. North

  6. The strategy for 2006 - 2009 is largely the same as previously approved by Cabinet.

    7. Banbury - 6 offices consolidated in to 1 new office for approximately 290 staff. A site has been identified but availability is not certain. There is a limited availability of offices of this size in appropriate locations in Banbury and therefore it may be necessary to consolidate in to 2 offices, one of which could be an upgraded Calthorpe House. A decision on this will be made at the Review of Assets Programme Board Meeting on 19th October.

    Witney – 2 leased properties surrendered and consolidated in to an existing office at Mount House by making more efficient use of that property (completed)

    Bicester – Upgrade one existing office (including co-location of NHS staff) and relocate a second office at Old Place Yard to the town centre redevelopment (with the library which will also be relocated).

    Chipping Norton – Retain a small resource base. 

    Post 2009 it may be possible and desirable to achieve further consolidation in Witney and Bicester, to achieve one main office base in each town.

    Oxford Area

  7. The previously approved strategy excluded central offices and proposed the consolidation of 6 other offices in Oxford in to 1 new office in east Oxford. The situation changed with the need to provide accommodation for the Shared Services Centre.

  8. The proposals for 2006 – 2009 assume a Shared Services Centre is located at Unipart House.

    • Speedwell House – Environment & Economy remain.

    • County Hall - CYP&F staff from Macclesfield House and possibly Clarendon House and most S&CS staff from Yarnton House move to County Hall occupying the space vacated by Shared Service Centre staff. Other staff and Councillors currently in County Hall remain.

    • Clarendon House – ICT remain

    • Macclesfield House – disposed of (that part occupied by the Registration Service may be retained if it is not possible to secure alternative premises). The feasibility of moving the Registration Service to County Hall is currently being considered.

    • Cricket Road Centre – An option appraisal has been carried out and has concluded that in both financial and property terms the preferred option is to dispose of part of the site and invest in the reminder to provide a good quality and effectively used asset. This proposal would require support of the landowner which is currently being sought. Early indications are that this may not be forthcoming in which case alternative options will need to be considered.

    • Acquire a new east Oxford hub at Temple Cowley for S&CS and CYP&F staff from Tyndale House, Crown House, Early years staff from The Wheatley Centre, Shotover View, Yarnton House, Slade, Oxford Options, Learning Disability Trust staff from Wadham Court and City NHS Intermediate Care Team and dispose of/release the vacated sites.

  1. Post 2009 the intention is to re-provide central offices in a joint County and City Council Civic building as part of the West End development. This would allow for disposal of Speedwell House, County Hall and possibly the surrender of Clarendon House. The strategy is therefore consistent with the aspirations for the West End and allows for the early release of Macclesfield House which could assist West End objectives. There is also the possibility that the Rewley Road fire station could be relocated in the short to medium term thereby releasing that site for development by Oxford University in a way which would all contribute to the objectives of the West End project.

  2. The CYP&F Directorate has proposed a new office at Kidlington. This is inconsistent with the approved strategy but the directorate have been given an opportunity to make a case for this provision.

    3. South

  3. The strategy for 2006 - 2009 is largely as previously approved by Cabinet. Foxcombe Court, Abingdon has already been established as the main office in the south of the county.

    4. Abingdon - Move remaining staff from 61a High St, Wallingford to alternative accommodation at Wallingford (to be identified) and Champion House, Abingdon to allow disposal of The Clinic, Abingdon and 61a High Street, Wallingford.

  4. Post 2009 it may be possible to take further space at Foxcombe Court to allow further consolidations.

    5. Assessment of the Strategy

  5. The research undertaken for the Review of Assets has shown that the most effective way to meet the Review objectives (included at Annex 1) and sustain and improve service delivery is to consolidate offices in the main towns, but also ensure there are adequate smaller offices across the county to allow staff to work effectively and customers to access services where appropriate.

  6. The Cabinet has previously approved the arrangements in the north and south of the County and therefore the main area of change is in central Oxford. The proposals allow for consolidation and more effective use of central offices, and the disposal of Macclesfield House which has the poorest quality space, would be the most expensive to improve and is the most appropriate site to dispose of in terms of redevelopment potential.

  7. Consultation has been undertaken with CCMT, Directorate Management Teams and directorate property representatives, many of whom have been involved in collecting the information necessary to develop the strategy. Consultations show that there is broad support for the proposals but that further work will be required with service managers to confirm the assumptions on staff numbers and locations used to develop the strategy.

  8. The proposals would enable the introduction of modern work-style in the re-provided offices leading to a reduction in floor space of approximately 15% and allowing staff to work more flexibly. A target of 20% was originally aimed at, but this has not been possible to achieve, due to the fact that hot-desking is already taking place in some offices and as some offices have an under provision of facilities such as meeting rooms. Facilities such as hotdesks and network access will be provided to allow staff to work in offices other than those that are their normal place of work.

  9. The proposals include sharing offices with partners such as the Oxford Learning Disability Trust (to be located in a new east Oxford hub) and a National Health Service Intermediate Care Team in the Banbury hub. Consultations are currently underway with partners to identify if there are further opportunities available and contact will be maintained as the proposals develop.

  10. The strategy has been developed using whole life appraisal methods and this approach will be used to test variations on the strategy.

  11. There will be benefits in terms of the County Council’s Future First objectives, due to the reduction in number and size of offices and improvements to the environmental performance of a number of retained buildings.

    12. Financial Appraisal

  12. The Phase 1 proposals set out above would have capital costs currently estimated at approximately £11 million and capital receipts of circa £10m. The net cost (including borrowing costs and allowing for revenue savings) over 28 years would be £1.08 million or nearly £40,000 a year on average. The estimated level of additional investment that cannot be covered by capital receipts and revenue savings is therefore relatively modest for the scale of change and improvement that would be achieved. The Review of Property Assets Programme Board Meeting on 19th October will be considering a report on the financial position, including options for bridging the gap between capital costs & receipts and also of addressing cash flow issues.

  13. Some sensitivity analysis has been undertaken to test the financial impact of variations on the proposal. It is almost certain that variations to the strategy will be needed as further work is done, for example due to availability of new leased offices or to changes in directorate requirements. Some of these variations may increase costs and some would mean that overall savings could be made. It should also be noted that there are many assumptions at this stage that could result in costs being higher or lower than anticipated. Key variables include assumptions about rental costs, capital receipt estimates and estimates of refurbishment works and fit-out costs.

  14. Overall property revenue costs will fall although not by enough to cover borrowing costs. There would be significant revenue expenditure required if no change was proposed as some of the property is inadequate or will need re-providing due to leases expiring or buildings coming to the end of their useful lives.

  15. It has always been and remains the intention to make the proposals self financing if possible using revenue savings and capital receipts from those properties disposed of although it appears at this stage that this may not be possible. Approval for the Business Case will be sought from the Review of Assets Programme Board and the Capital Steering Group before approval is sought from Cabinet in January 2007.

  16. The Business Case for the Shared Services Centre does not include savings that may arise from staff releasing space in County Council offices. Any savings are uncertain and difficult to quantify. It has been recognised that there will be savings from vacated space but that they would help to achieve a wider reorganisation of offices. The financial appraisal for the Review of Assets assumes that the space vacated by Shared Service Centre staff is reused to help facilitate the office re-organisations and that the capital receipts from any consequent disposals and any revenue savings are used to help finance the Review of Assets. The Cabinet is requested to support this principle.

    17. Timescales

  17. The proposed timetable is set out below:

    18. Secure accommodation for the Shared Services Centre

    By October 2006

    Precise staff numbers and moves confirmed

    By December 2006

    Business Case approved by Cabinet

    January 2007

    Project Approvals to Cabinet

    By June 2007

    Southern Area re-organisations completed

    By end 2007

    Northern Area re-organisations completed

    By mid 2009

    City Area re-organisations completed

    By mid 2009

    Governance Arrangements

  18. A Programme Board has been established. This is made up of the Cabinet Member for Finance, the Cabinet Member for Change Management, the Director for Resources, representatives at Head of Service level from each directorate, an ICT and Finance representative and chaired by the Head of Property. The purpose of the Programme Board is to provide strategic leadership and decision making and to monitor progress against agreed programmes. The Board will report to the Change Management Board. Progress reports will be brought to the Cabinet which will include Project Appraisals, details of progress against timescales and financial monitoring. The project will be managed in accordance with the County Council’s Project Management Framework.

    19. Risks

  19. The key risks are that:

    • Uncertainty about the impact of the re-alignment may lead to changes in staff locations, numbers and the need for co-location

    • The financial appraisal is not reliable due to uncertainties around costs, capital receipts and revenue saving

    • Suitable buildings for consolidation in Banbury and east Oxford cannot be acquired

    • Funding is not available for any deficit meaning that part of the strategy cannot be implemented

    • Staff do not support the moves and the need to adopt modern work-styles

    • Service directorate requirements change during the project or have not been accurately assessed at this stage

  1. A risk assessment workshop will take place in October when all of the project risks will be identified and a risk register established.

  2. The overall programme and individual projects will be managed in accordance with the County Council Project Management Framework.

    3. RECOMMENDATIONS

  3. The Cabinet is RECOMMENDED to:

          1. endorse the updated office re-organisations strategy for the period 2006-2009 as set out in the report; and

          2. approve the principle that the space vacated by Shared Services Centre staff is used to help facilitate the office re-organisations in (a) above and that the capital receipts from disposals and revenue savings arising from the office reorganisations are used to contribute to the financing of the Review of Assets.

NEIL MONAGHAN
Head of Property

Background papers:
Cabinet Report on the Review of Property Assets dated 20 December 2005 – item CA7
Cabinet Report on the Review of Assets dated 19 July 2005 – item CA9

Contact Officer: Mark Tailby, Property Services, Resources Tel: (01865) 816012

October 2006

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