ITEM CMDF2
DETAILED PROJECT APPRAISAL
Name of Scheme: Better Offices Programme – Southern area hub.
Start Year: 2007/08
Basis of Estimate: Capital Cost estimates produced by Mouchel Parkman. Heads of terms agreed with landlord.
1. INTRODUCTION
On the 16 January 2007, the Cabinet approved the business case for the Review of Property Assets (now the Better Offices Programme) and resolved to:
(a) agree the funding required to implement the programme, subject to a project appraisal for the necessary expenditure being approved by the Cabinet; (b) authorise officers to pursue negotiations for the acquisition of Units 3 and 4, Foxcombe Court, Abingdon.
These negotiations did not come to fruition and as a result, the Better Offices Programme Board agreed that terms should be agreed on alternative premises as near to Foxcombe Court as possible.
This project approval relates to the acquisition of ground floor accommodation in the southern area, in order to consolidate 3 existing Council offices in Abingdon and Wallingford and to ease some of the existing pressures at Foxcombe Court.
As a consequence, other Council properties will be vacated and sold by March 2008. Legal commitment will need to be in place by 31st December 2007, for the project and subsequent disposals to proceed in accordance with the project timescales.
Part of the southern area proposals include temporarily leasing offices in Wallingford whilst the Youth Centre is being redeveloped. These premises have been identified and terms agreed, within the Better Offices Programme budget.
2. DESCRIPTION OF PROJECT
The project involves entering into a lease to take 5,900 sq ft of ground floor accommodation in the south of the County. The lease will be for 10 years and will provide for a tenant’s option to break at years 3 and 7, to link in with the lease expiry on Units 3 & 4 Foxcombe Court and also the County Council’s lease expiry on its existing accommodation at Foxcombe Court.
The proposed accommodation has recently been refurbished and will only require a minimal fit out.
This project approval includes the capital costs of the Council’s fitting out works and equipping the new accommodation, including new ICT as appropriate and new furniture throughout.
The accommodation will provide space for 100 staff adopting modern workstyles from the CYP&F and S&CS directorates currently based in 5 council owned or leased properties. Within that figure of 100, there will also be accommodation for approximately 20 staff from Foxcombe Court to relieve some of the current pressure on space.
The proposals will enable the disposal of Champion House, Abingdon and 61a High Street, Wallingford.
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. The proposals will enable the introduction of modern work-style in the re-provided offices, leading to a more efficient use of space and allowing staff to work more flexibly.
The proposal includes sharing offices with Partners such as Right Employment, PCAMHS (Primary Children and Adolescents Mental Health Service) and Oxford Education Business Partnership. The BOP budget allows for a recharge to these occupiers to cover rent and service charge.
There will be benefits in terms of the County Council’s Future First objectives, due to the reduction in the number of offices and the disposal of some older buildings.
This project will contribute to the E&E Directorate priority of “Improving the Performance of our Property” by providing open plan accommodation that will be fully utilised by the adoption of modern workstyles. Improved access to buildings will support Disability Equality.
The project also contributes toward the Asset Management Plan key property objective of having 90% of property fit for purpose by 2015.
The provision of this new hub 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 consolidation of offices in the south is a major component in the re-organisation of the Council’s office accommodation. The creation of hub offices around the county was approved by the Council’s Executive in 2004 and will contribute significantly to achieving the adopted success criteria for a smaller, but better quality, flexible portfolio that will improve service delivery and is fit for purpose.
Acquisition of this additional space will enable the sharing of meeting rooms and facilities at Foxcombe Court.
5. OTHER OPTIONS CONSIDERED
An option appraisal has been carried out and options considered included:
1. Do minimum work to or refurbish existing buildings. Rejected as the objectives and benefits of the programme would not be achieved. 2. Acquire Units 3 & 4 Foxcombe Court. Rejected as a deal could not be agreed. Involved relocation of an existing tenant. 3. Relocating staff from 61a High Street, Wallingford into Champion House, Abingdon. Rejected as the objectives and benefits of the programme would not be achieved to the same extent as the preferred option. However, this is a fall back option should the additional accommodation not be secured. 4. Relocating staff from 61a High Street, Wallingford and Champion House into The Charter. Rejected as the accommodation is not of adequate size. 5. Hypothetical options of building a
new building on Council or third party owned land were discounted as
impractical and too expensive. The acquisition of this additional accommodation provides an opportunity to consolidate staff into a modern building in one location. It also provides an opportunity to release pressure from the existing space at Foxcombe Court.
6. LINKS TO THE COUNCIL’S
ASSET MANAGEMENT PLAN This project contributes toward the following key property objectives, as set out in the Asset Management Plan:
· for 90% of the Council’s property to be fit for purpose by 2015; · improvements to the condition of the Council’s property and a reduction in the maintenance backlog to a sustainable level; · improvements in office accommodation and the introduction of modern workstyle across the County by implementing the Review of Property Assets; · improving access to our buildings
for people with disabilities 7. FINANCIAL IMPLICATIONS
The financial case for the overall Better Offices Programme was 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. All estimated capital receipts within the BOP programme are currently being revalued and a report will be provided prior to the meeting outlining any changes.
The estimated capital costs of the Southern area office acquisition are £278,530. This amount is within the BOP budget for these costs. There is estimated to be on-going annual revenue costs of £127,285 from 2013, with fluctuations prior to that as properties are disposed of and staff relocation costs are incurred. The existing revenue cost of affected buildings that will be disposed of is £28,000 (rates and utility costs from Champion House and 61a High Street). There is an overall revenue cost to the BOP budget of £100,000 within the Southern area office project, mainly due to the increase in rent as a result of the disposal of two freehold properties. This is within the BOP budget finances.
However, as the 2 year capital contribution from the original Foxcombe deal is no longer available, the total impact on the BOP budget is an increase on total cost over 25 years of £975,000.
A contingency figure of 10% of all capital expenditure has been included in the programmes Business Case, which will be used across the programme.
information relating to the financial or business affairs of any particular person (including the authority holding that information).
NEIL MONAGHAN SUE SCANE Head of Property Head of Finance & Procurement
RICHARD DUDDING Director for Environment & Economy
Contact Officer: Mark Tailby Property Services (01865 816012) October 2007
November 2007
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