Agenda item

The Committee considered the undernoted report:

 

“1.0      Purpose of report

 

1.1        The Capital Programme is a rolling programme of investment which either improves existing Council facilities or provides new facilities. This report provides an update on –

 

·      Capital programme - Recent highlights since June 2013

·      proposed recommendations for movement between the Capital Programme stages

·      proposed new Stage 1 - Emerging Projects

·      projects requiring additional resources

 

2.0        Relevant Background Information

 

            Capital Programme – Highlights since June 2013

 

2.1        There has been significant movement on the Capital Programme since the last update report to Committee in June. Many projects have progressed both on the ground and also in the necessary preparatory work required to deliver them. A number of projects have been completed including the –

 

-     the £3million new Mary Peter’s Track has been officially opened

-     the £4m upgrades of Dunville and Woodvale Parks which were part-funded by DSD;

-     a new £470,000 3G pitch at the Hammer Complex which was part funded by SportNI;

-     the £200,000 John Luke Bridge in Clement Wilson Park which opened earlier this month

 

2.2        Work is also well underway on –

 

-     Phase 1 of the Connswater Community Greenway project

 

-     the relocation of the Belfast Welcome Centre which is due to open in November

 

-     the three strands of the Super-Connected Belfast project (voucher scheme, wireless and Wi-Fi).  A two-month pilot of the voucher scheme is now underway which will help provide grants to SMEs and third-sector enterprises to enable them to access superfast connections. The full voucher scheme is expected to launch in November

 

            Preparatory work is also well advanced for a wide range of projects including new pitches and changing facilities under Phase 1 of the Pitches Strategy, the new pavilion at Suffolk and the new pitch at Marrowbone. Corporate Communications are working closely with the Property & Projects Department and client departments to ensure that the media opportunities around each of these projects is maximised. 

2.3        Pictures of the above projects are attached at Appendix A so Members can see both the completed projects and the work which is underway. The Property & Projects Department is also happy to arrange site visits for Members/Party Groups to be undertaken to any of the projects including capital programme projects or any of the LIF projects which the Council has contributed to.

 

            Girdwood Hub – Update

 

2.4        Members are aware that the Council has applied for Peace III funding for the development of a Community Hub at Girdwood. Members are asked to note that notification has been received from SEUPB that Peace III funding for the delivery of the Girdwood Hub has been approved and that a letter of offer will follow. This is a significant investment in North Belfast. Work is continuing on the Hub project including working closely with the Hub Forum.  It is anticipated that work will start on the ground in January 2014.

 

            Rolling Capital Programme 2013/14 onwards

 

2.5        Members have agreed that all capital projects must go through a Stage process where decisions on which projects progress are taken by SP&R. This provides assurance as to the level of financial control and will allow Members to properly consider the opportunity costs of approving one capital project over another capital project. Importantly it will also enable Members to focus on delivering the projects which can have maximum benefits and investment return for the city and local areas.

 

2.6        Members are aware that the Capital Programme (as agreed by Committee on 22nd March 2013) has been reconfigured to reflect the 3 approval stages as agreed –

 

·         Committed projects (Stage 3) - projects which have completed a Full Business Case (FBC) and where approval has been obtained by SP&R to proceed to tender. There are 4 Tiers under this Stage including -

·         Project which are completed (Stage 3 - Tier 3);

·         Projects which are at construction stage (Stage 3 – Tier 2);

·         Projects at tender preparation stage (Stage 3 – Tier 1) or

·         Schemes at risk (Stage 3 – Tier 0) – which are normally schemes seeking external funding and are still awaiting letters of offer (LOO) (i.e. ERDF applications) but that need to be progressed to tender preparation stage in order to meet tight funding deadlines or projects which have outstanding project issues to resolve.  Members are asked to note that no construction contracts will be awarded on these projects until a LOO is in place or that any other outstanding issues have been resolved

 

·         Uncommitted projects (Stage 2) –projects where a Strategic Outline Case (SOC) has been agreed by Committee and work on the project is being progressed through the development of an Outline Business Case (OBC), but they have not yet been developed to a stage where permission could be sought from SP&R to proceed to tender. 

 

·         Emerging proposals (Stage 1) –proposals which require completion of an SOC before they could be considered further by SP&R Committee.

 

3.0        KEY ISSUES

 

            Capital Programme – Proposed movements - Projects recommended to move up a Stage 

 

            Proposed movements from ‘Stage 2 – Uncommitted’ to ‘Stage 3 – Committed’

 

3.1        It is proposed that the projects outlined in Table 1 below are advanced from Stage 2 – Uncommitted to Stage 3 – Committed. Members are asked to note that the costs cited are pre-tender estimates only. These costs will be challenged and assessed at the tender preparation stage and any significant changes will be brought back to Committee. 

 

Project	Project overview	Proposed Stage	Estimated Gross Cost	Estimated Net cost
Tropical Ravine	Redevelopment of the Tropical Ravine in the Botanic Gardens. Heritage Lottery Funding of £2,232,000 has been applied for. This project will remain ‘at risk’ until a LOO is received.	Stage 3 (Tier 0)	£3,732,000	£1,500,000
Olympia regeneration	Regeneration of the Olympia Leisure Centre. Members will be aware that £19m towards this project was agreed at SP&R in June as part of the overall Leisure Transformation Programme.	Stage 3 (Tier 0)	£21,600,000	£19,000,000
Half Moon Lake	To support the evolution of the Half Moon Lake through improved access and to provide for a safe learning environment for the many school, community and local interest groups who enjoy this unique environmental asset located within a dense urban environment.	Stage 3 (Tier 1)	£200,000	£200,000
Drumglass Park	To further develop Drumglass Park in order to fully exploit its role and function in the economic and tourism fabric of the Lisburn Road.  This is proposed through civic realm improvements and public art installation which will facilitate enhanced usage by local people and visitors.	Stage 3 (Tier 1)	£421,875	£421,875
			£25,953,875	£21,121,875

 

            Specific project issues

 

3.2        Tropical Ravine - Members will be aware that the Tropical Ravine project is the subject of a Heritage Lottery Fund application. This was submitted at the start of August and it anticipated that a decision will be made by the HLF committee by the end of the year. However in order to meeting funding timescales it is necessary for this project to proceed to tender preparation stage.  As outlined above however no construction contracts will be awarded on the Tropical Ravine project until a LOO is in place. The HLF had previously awarded the Council £115,000 towards developing up the project up to RIBA Stage D.  Given the tight timescales for funding, the Council would like to continue to work at risk on this project to bring it up to RIBA Stage E in order to progress it to a level where it is ready to commence as soon as possible after a Letter of Offer is received from HLF. To facilitate this it is recommended that £60,000 is allocated at risk to this project.  Members are asked to note that these costs will be recovered if a Letter of Offer is received.

 

3.3         Olympia Regeneration – Members will be aware that the SPR Committee, at its meeting in June, agreed a £105m capital expenditure affordability limit for the leisure transformation programme. This included £38m towards the Olympia and Andersonstown schemes under Phase 1. At this meeting Members were also brought a detailed report on the Integrated Stadia regenerations and as part of this Members were made aware that there was a very tight timescale for the delivery of Olympia. Since this time officers have been continuing to work closely with DCAL, the IFA and Linfield in order to ensure successful development and delivery of the project. As a result a number of issues have now been successfully resolved including the overall programme of works and the procurement strategy.

 

3.4         However there are a number of outstanding issues to be resolved including –

 

·         Confirmation in writing from DCAL of its £2.75million contribution to the project

·         Detailed land agreements with Linfield FC being resolved

·         Maintenance and management agreements with Linfield FC being formally agreed

·         Subleases and licenses with the IFA being agreed

·         a mutually beneficial community benefits partnership with the IFA being agreed

 

              Members are therefore asked to note that the Council will continue to progress work at risk on this project in order to meet the tight programme timescale but that no construction contracts will be awarded until all outstanding issues have been satisfactorily resolved.

 

3.5         Members are asked to note that the Director of Finance & Resources has confirmed that the projects outlined in Table 1 at 3.1 above are within the affordability limits of the Council on the proviso that no construction contracts for the Tropical Ravine or Olympia regeneration are let until a Letter of Offer is in place (Tropical Ravine) and all outstanding issues have been agreed (Olympia).

 

              Proposed movements from Stage 1 – Emerging Projects to Stage 2 – Uncommitted

 

3.6         It is proposed that the projects outlined in Table 2 below are advanced from Stage 1 – Emerging Projects to Stage 2 – Uncommitted. A Strategic Outline Case has been completed for each of these which has examined (i) Background to the project; (2) Feasibility; (3) Affordability; (4) Deliverability and Sustainability.  Members are asked to note that at SOC level the affordability of a project is only examined at a very high level and this is tested and challenged further during Stages 2 and 3.

 

Project	Project overview	Proposed Stage
Capping Works – North Foreshore	Part of the North Foreshore Infrastructure Project. To progress capping works on 2 sites (the Cleantech site; the AD Site 1).  Committee have previously agreed to market both sites and agreed in August the preferred bidder in respect of the Cleantech site. The capping work is required in order to enable development work to be undertaken.	Stage 2
Commercial Waste Bin Weighing system	The procurement of bin weighing hardware, to be installed on 8 waste refuse collection vehicles, as well as a software management system from which reports can be generated on the tonnage of waste collected.	Stage 2
Council Accommodation	To inform the development of a longer term strategy for the Council’s accommodation needs. This will build on the initial baseline already undertaken by CIFPA.	Stage 2

 

            Specific project issues

 

3.7        Council accommodation – Clarendon House - Members will recall that they were informed at the SP&R meeting in June of the potential availability to purchase Clarendon House and it was agreed that this property should be included as an option in the Council’s Corporate Accommodation Strategy and work around an economic appraisal has been commenced on this basis.  It was agreed that a further report would be brought back to Committee in the event of developments in relation to this disposal. 

 

3.8        Members are now advised that an offer has been received by the agents which may precipitate conclusion of the sale by a specified deadline before completion of the Council’s economic appraisal. In order to retain Clarendon House as a live option in the Corporate Accommodation Strategy approval is sought to bid on Clarendon House (if required) on a without prejudice basis and on the condition that any bid would be subject to the outcome of the economic appraisal and dependent upon further discussion with the Director of Finance & Resources regarding affordability of funding with a further report to be brought back to this Committee to consider acquisition.

 

            Projects recommended to be added to the Capital Programme

 

3.9        It is proposed that the following projects are added as Stage 1 – Emerging Projects. These projects will all require the completion of an SOC before they are progressed. Members will acknowledge that there is increasing demand on the Council to deliver projects within increasingly scarce financial resources. Members will also be aware that the Council is commencing an ambitious leisure transformation programme. Due to the scale of investment required this will have implications on future project delivery and will necessitate prioritisation of projects under the capital programme.  Members are therefore asked to take this into consideration when making investment decisions around projects.

 

Proposed Project	Overview	Proposed through
Grove Wellbeing Centre - Provision of Pool Seating.	Members will be aware that when the new Grove was opened it was agreed that priority for the use for the pool would be for recreational swimming, rather than for the use of swimming clubs. Therefore the centre’s design had not incorporated spectator seating which would enable gala events to be held at the venue. Since this time, one of the main swimming clubs which had previously used the pool at old Grove LC has consistently lobbied the Council to make provision for spectator seating and it was agreed by the Parks & Leisure Committee at its meeting in June that this project be referred to the SP&R Committee for consideration as an emerging project under the Capital Programme. Members are asked to note that the Council is commencing an ambitious leisure transformation programme.  As part of this, the requirements of swimming clubs, insofar as they relate to swimming galas, will be considered as part of this programme. It is also likely that this proposal will necessitate significant capital and structural works to be carried out.	Parks & Leisure Committee
City Hall – Memorabilia and Displays	Members will be aware an EQIA on Memorabilia was carried out last year and the outcomes reported to Committee in Nov 12. Following this an independent consultant was commissioned to undertake work in relation to the next steps for displays, the findings of which were presented to the Joint Diversity Group on 1 March.  Party Group briefings were subsequently held in April and May. Members will be aware that City Hall works (including the East Wing and grounds, Changing Places toilet & parenting room) is already an Emerging capital project.  However the displays and memorabilia element is not currently included on this list and as a result no funding has been set aside to undertake this work. The Joint Diversity Group, at its meeting on 6th Sept, therefore agreed that the displays & memorabilia element be referred to the SP&R Committee as an Emerging Project as part of the overall City Hall project and that a composite SOC for all elements of the City Hall works be developed.  This SOC will also take into account a number of other emerging issues in relation to the city Hall including the Council’s corporate accommodation strategy, the impact of local government reform and transfer of functions	Joint Diversity Group of Party Group Leaders & Centenaries Working Group

 

3.10      City Hall – Memorabilia and displays – Members are asked to note that if they agree to add this project to the Emerging Project list that it is proposed that a business case will be presented to the SP&R Committee in January which will include setting out proposals/ options for physical works to the City Hall to create more space for the representation of symbols/artefacts and the creation of exhibition space.  As part of this it is recommended that Members agree that independent consultants are engaged to help develop proposals around the presentation of items at the same time as consideration is being given to the physical environment, subject to the agreement of a specification of principles which will be brought back to the Joint Diversity Group in October. Members are asked also to note that an action plan on progressing this work will be taken to the next meeting of the Joint Diversity Group and that the Group will be kept up to date of progress on the development of the SOC in relation to displays and memorabilia between now and January.

 

            Projects requiring additional resources and/or approval to go to tender

 

3.11      Fleet Replacement Programme – Members will know that the Council needs to run and maintain a substantial fleet in order to deliver its services. A fleet replacement programme is currently a Stage 3 project on the Capital Programme, however Members may recall that a recent external consultancy review of the Council’s Fleet Management recommended a significant reduction in the size of fleet and that a comprehensive fleet replacement policy and programme should be developed. The Council’s fleet replacement policy has now been updated.  This has been informed by the previous Council policy, industry approach and standards, extended life as recommended by the VFM Fleet Review and is underpinned by comprehensive out of life assessments.  Members are asked to approve this. Building on this a detailed costed programme for fleet replacement for the next 6 years will be developed. 

 

3.12      In the interim however, some vehicles have reached the end of their operating life and have had to be removed from service. This has had the effect of creating some temporary shortages in specific types of assets (i.e. street-cleansing and refuse-collection assets). In order to address these shortages, it is proposed to lease a number of vehicles on an interim basis while the vehicle replacement programme is developed and signed off. This approach will allow any temporary shortages to be managed but without acquiring any new assets, as this could make the task of implementing significant fleet reductions more difficult in the longer term.  In order to facilitate this, Committee is asked to approve an additional net capital expenditure of up to £125,000 to cover leasing costs during the current financial year.  Approval is also sought to initiate the necessary procurement processes (including the invitation of tenders and/or the use of appropriate ‘framework’ arrangements if available) for the leasing of assets, and for the delegation of subsequent evaluation and award processes to the Director of Property & Projects.

 

3.13      Vehicle GPS and Route Optimisation – A key recommendation of the Fleet Management  Review was the implementation of a GPS fleet tracking system in order to improve utilisation, planning and efficiency of the council fleet assets. It was also envisaged at this time that the GPS system would also provide the required technology to permit ‘route optimisation’ assessments to be undertaken across our fleet in order to maximise routes and ensure that fleet assets are being used optimally in terms of the number, distribution, scale and scope. 

 

3.14      However since this time, further work on the specification for the GPS/Route optimisation project has been carried out and it is now evident that a separate route optimisation system and support service will be required. The Council has also looked at how the systems can be future proofed to take into consideration the impact of local government reform and service convergence issues which has necessitated a number of additional modelling modules which have impacted the overall project costs. Committee is asked to approve an additional net capital expenditure of £150,000 towards this project. Approval is also sought to initiate the necessary procurement processes (including the invitation of tenders and/or the use of appropriate ‘framework’ arrangements if available) for this project, and for the delegation of subsequent evaluation and award processes to the Director of Property & Projects. Members are asked to note that a target cost contract will be put in place for this project to ensure that the costs stay within agreed limits. 

 

3.15      Members are asked to note that the Director of Finance & Resources has confirmed that the additional net capital expenditure for the Vehicle Replacement Programme and the GPS/Route Optimisation projects are within the affordability limits of the Council.

 

4.0        Recommendations

 

4.1        Members are asked to –

 

·      note the updates in relations to the Capital Programme as outlined in 2.1 and 2.2 above and that the Property & Projects Department is happy to arrange site visits for Members/ Party Groups to Council funded capital project (capital programme and LIF). 

·      note that the Council has received notification from SEUPB that Peace III funding  for the delivery of the Girdwood Hub has been approved and that a letter of offer will follow.  Work on this project is continuing and Members will be brought regular updates as required

·      agree if they wish to progress the projects as outlined in Table 1 (3.1 above) to move from Stage 2 -Uncommitted to Stage 3 – Committed in the capital programme and if so, agree that these projects are advanced to the invitation of tenders, to be awarded on the basis of most economically advantageous tenders received and full commitment to deliver. Members are asked to note no construction contracts for the Tropical Ravine or Olympia will be let until letters of offer are received, the terms and conditions are agreed or other outstanding issues in relation to projects are satisfactorily resolved

·      approve an allocation of £60,000 ‘at risk’ towards the Tropical Ravine project prior to confirmation of funding in order to progress design work and ensure this project is ready for tender to meet the funding timescales

·      agree if they wish to progress the projects as outlined in Table 2 (3.6 above) to move from Stage 1 –Emerging Projects to Stage 2 – Uncommitted in the capital programme

·      Council Accommodation - Clarendon House – agree that officers continue to progress discussions including making a bid (if required) on Clarendon House on the condition that any bid is on a without prejudice basis subject to the outcome of the economic appraisal and dependent upon further discussion with the Director of Finance & Resources regarding affordability of funding with a further report to be brought back to this Committee

·      agree if they wish the proposed new projects as outlined in Table 3 (3.9) to be added as Stage 1 – Emerging projects

·      note that if they agree the City Hall –Memorabilia and Displays as an emerging project that approval is given to engage independent consultants to help develop proposals around the presentation of items at the same time as consideration is being given to the physical environment, subject to the agreement of a specification of principles which will be brought back to the Joint Diversity Group in October

·      Fleet Replacement Programme – approve the additional net capital expenditure of £125,000 for the fleet replacement programme in order to lease a number of vehicles on an interim to address temporary shortages and agree that this is advanced to the invitation of tenders, to be awarded on the basis of most economically advantageous tenders received with authority delegated to the Director of Property & Projects

·      Members are also asked to approve the updated Fleet Replacement policy as attached in Appendix C and note that a detailed fleet replacement programme is being developed in consultation with Departments

·      Vehicle GPS and Route Optimisation - approve the additional net capital expenditure of up to £150,000 for the Vehicle GPS/Route Optimisation project and agree that this is advanced to the invitation of tenders, to be awarded on the basis of most economically advantageous tenders received with authority delegated to the Director of Property & Projects.”

 

            After discussion, the Committee adopted the recommendations and agreed that reports be submitted at a future meeting of the Voluntary Transition Committee providing details in relation to current and future Capital Projects which might be undertaken in the Castlereagh and Lisburn areas which were transferring to Belfast City Council; and on how that Committee could engage with the representatives from those areas.