DETAILED PROJECT APPRAISAL – R1/1
Name of Scheme: Better Offices Programme – New East
Oxford office.
Start Year: 2007/08
Basis of Estimate: Cost estimates produced by Mouchel
Parkman reflecting, in the case of rent, negotiations with the landlord.
1.
INTRODUCTION
On
(a)
agree the
funding to implement the programme, subject to a project appraisal for the
necessary capital expenditure being approved by the Cabinet ; and,
(b)
authorise
officers to pursue negotiations for the acquisition new offices in
This Project Appraisal
relates to the acquisition of an office building in Cowley,
Approval is needed to enable the project to remain
within programme and for the necessary Agreement to Lease to complete by
2.
DESCRIPTION
OF PROJECT
The project involves the acquisition by a 15 year
leasehold interest in the whole of a modern detached three storey office building in Cowley,
This project appraisal includes the property related
revenue and capital costs of fitting out works and equipping the accommodation
with ICT and furniture. The accommodation would house up to 393 staff adopting
modern workstyles from Social & Community Services and Children Young
People & Families currently based in 11 council owned or leased properties.
3.
POLICY
CONTEXT
The provision of suitable office accommodation makes
a significant contribution to the provision of high quality services and
therefore the project will support the Corporate Objective of providing Value
for Money, and the strategic priority of improving our services. Improved environmental performance will
contribute to the objectives of the Future First Project. It will contribute to “Improving the
Performance of our Property” by providing accommodation, which will be open
plan and fully utilised by the adoption of modern workstyles, and improved
accessibility of buildings will support Disability Equality.
The project aligns with the E&E Directorate Plan
and Property Service Plan objectives, one of which is to ‘Improve the
Performance of our Property’. This is defined as providing a more efficient and
effective property portfolio that secures better value from the assets, and
enhances service delivery.
The project also contributes to the corporate Asset
Management Plan objective of making 90% of Property Fit for Purpose by
2015. The provision of this new office
is also directly linked to the Council’s Values (CHOICE), specifically
providing a Customer Focus and assisting in the delivery of more efficient and
effective services with greater team integration within and between services.
4.
JUSTIFICATION
FOR THE PROJECT
The creation of a new hub office in
5.
OTHER
OPTIONS CONSIDERED
Options considered for the east
Do minimum work to existing buildings. (Rejected as
the objectives and benefits of the programme would not be achieved and there is
a strong risk of losing at least one key leased in building.)
Retaining and refurbishing Macclesfield House.
(Unsuitable location for peripatetic staff use and a significant capital
receipt for the project).
The extension and refurbishment of an existing leased
in building on
Leasing in a new building on a Oxford Business or
Science parks. (These options are too expensive and the
Leasing in second hand modern buildings outside the
ring road. This is an unsuitable location in terms of service delivery.
Hypothetical options of building a new building on
Council or third party owned land were discounted as impractical and too
expensive with no obvious land availability in the right location.
6.
FINANCIAL
IMPLICATIONS Please see (exempt) Resource
Appraisal
Exempt Information: The Annex contains information considered to
be exempt within Paragraph 3 of Schedule 12A to the Local Government Act 1972
(Information relating to the financial or business affairs of any particular
person, including the authority holding that information), namely, the
estimated value of property in respect of which a sale is in contemplation; and
it is further considered that in all the circumstances of the case, the public
interest in maintaining the exemption outweighs the public interest in
disclosing the information, in that otherwise the position of the Council in
negotiations in respect of that sale would be likely to be prejudiced.
It is recommended on those grounds that the
public be excluded from the meeting during the consideration of the resource
appraisal since it is likely that if they were present during those items there
would be a disclosure of that exempt information.
The financial case for the Better Offices Programme
was reported to and approved by Cabinet in January 2007.
Capital receipts from disposals are pooled within the
financial planning for the overall programme, and not allocated to individual
projects.
The estimated capital costs of the east Oxford office
acquisition are £1,633,714, with an estimated annual revenue cost of £544,800
from 2009, with fluctuations prior to that as the rent free period for the new
office runs, properties are disposed of and staff relocation costs are
incurred. The existing revenue cost of affected buildings that will be disposed
of is £318,255. There is an overall revenue cost increase of approximately
£226,550 within the east
A contingency figure of 10% of all capital
expenditure has been included in the programme’s Business Case, which will be
managed separately. Whilst this contingency
is not needed at this stage, there are certain elements of expenditure (e.g.
fit out and IT Costs) which cannot be fixed until the landlord has finalised
his specification for refurbishment of the property.
Separate negotiations are taking place with a nearby
landowner to rent an additional 20 car parking spaces. If successful this would add a further £8,000
per annum to the revenue budget which would be within the approved business
case.
The detailed cost estimates are set out on the
separate sheet attached which is exempt due to commercial confidentiality.
NEIL MONAGHAN SUE
SCANE
Head of Property Head
of Finance & Procurement
Environment & Economy Corporate Core
RICHARD DUDDING
Director for Environment & Economy
Contact Officer: Mark Tailby, Team Leader, Strategic
Asset Management, Property Services, Tel: (01865) 816012
June
2007
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