Archived decisions

Contact: Andrew Smith Ext: 7826

1. Summary

1.1 The following decisions are sought:

1) That the additions to the programme of capital repairs, including those financed from the New Deal for Schools Condition Fund, be approved.

2) That £58,000 of the additional funds relating to storm damage be allocated to revenue repairs.

3) That the capital and major repairs programme for 2002/03 be developed and submitted to the Executive Member for Policy and Resources in March 2002 for approval.

2. Reasons (s)

2.1 To enable the repair works to progress.

3. Other options considered and rejected

3.1 Not applicable.

4. Conflicts of interest declared by the decision-maker or a member or officer consulted

4.1 Not applicable

5. Dispensation granted by the Standards Committee

5.1 Not applicable

6. Reason (s) for the matter being dealt with if urgent

6.1 Not applicable

Approved by:....................................... Date of decision:.......................

Councillor T K Thornber

Contact: Andrew Smith Ext: 7826

1. Introduction

1.1 The strategy for the Built Estate, which is approved each year, sets out for the County Council the major programmes of work in relation to repairs and maintenance liabilities. The strategy sets out clear objectives to:

· provide day to day maintenance and breakdown operations from the Revenue Maintenance budget;

· establish planned programmes of work to meet major liabilities from the Capital Repairs budget; and

· for the first time this year, a new capital allocation for repairs, direct from the DfES, to meet liabilities identified in the Asset Management Plan for Education buildings.

1.2 The liabilities associated with the County Council's Built Estate have been identified to be in excess of £300 million over the next five years. While it is not anticipated that the Council could ever match this liability, it does put a premium on ensuring that a comprehensive programme exists which provides maximum impact and value for money.

1.2 For the purposes of presentation and budget control the report has been separated into three sections:

1.3

· Capital repairs

· Revenue repairs and maintenance

· New Deal for Schools (Condition Allocation

1.4 In practice there is significant overlap, considerable constraints on the budgets, not least because of the volume of delegated expenditure to schools (some 70% of the revenue budget) and the New Deal Condition allocation which is available for expenditure on schools only.

2. Part 1 - Capital Repairs - Progress Report, Additions to the Programme and matters for approval

2.1 This section of the report relates to Capital Repairs. Capital Repairs are of

two types: replacement of major components and major repairs of existing

plant, fabric and components.

Capital Repairs

	£000
Replacement:	5.3	Appendix 1
Major Repairs:	8.4	Appendix 2

2.2 In addition, where government sponsored initiatives relate to repairs then these

are added to the above totals (which exclude fees). Any relevant carry

forwards relating to previous years are included in the totals above. The carry

forward relating to NDS4 capital repairs is discussed below.

2.3 In total, £2.508m of the previous year's New Deal for Schools money (NDS4) was carried forward to 2001/02: £2.264 of this is available for works, the balance relates to fees. To date, £844,000 (37%) of this money has been committed. The remaining allocation will be committed by the end of the financial year.

2.4 Appendices 1 and 2 show the current level of commitments against capital repairs. Major repairs include external redecoration, structural maintenance and the replacement of minor engineering elements. The level of commitment on major repairs is in line with the usual pattern for this stage in the year. The most significant areas of commitment relate to repairs being undertaken at the same time as capital projects, thus ensuring better value for money in respect of both the capital works and the major repairs. The other level of high financial commitment is against engineering repairs. Further means are being sought to use this budget in order to reduce the recurring pressures on the revenue budget.

2.5 Appendix 3 identifies a range of other projects for addition to the programme of capital repairs. The relatively low level of commitments on replacement capital repairs projects is not uncommon as there is a longer lead-time associated with the design and implementation of these schemes and as with all capital projects, work has only to be started in the financial year. It should also be noted that in order to accommodate schools' expectations and time scales on projects they are funding from delegated budgets, traditional landlord's programmes are being delayed.

3. Revenue Repairs and Maintenance - Progress Report; engineering arrangements and new Service Level Agreement with Schools

3.1 The level of commitment on revenue repair and maintenance is high at 78%: a breakdown is attached at appendix 4. Some of this is explained by engineering term maintenance contracts, where orders are placed substantially in advance of the service being provided. However, there is significant financial pressure which is causing the budget to be managed even more rigorously than normal, with only inescapable expenditure being incurred. This allocation covers all reactive and servicing expenditure and unplanned work such as vandalism.

3.2 The bulk of the revenue budget is delegated to schools who buy-back the Council's Services. A new five year Service Level Agreement has recently been sent to schools. Currently 100% of Community and Aided Schools buy-back the service. Once again, high levels of buy-back are anticipated. Such levels of buy back are strategically important to the County Council's continued management of the built estate as a corporate resource. A copy of the Executive Summary from the Service Level Agreement is attached as Appendix 5.

3.3 After removing the amounts set aside for delegation and `buy back' only some £3 million is available for maintenance of the total non-education estate. The largest liability outside of schools is in the Social Services non residential sector.

3.4 Two factors that have added to the pressure on the budget are:

· inflation

· the need to "repay" last year's revenue overspend of £58,000

Inflation on repairs is running at nearly 5% whereas the budget received an inflation allocation of 2.5%. The difference (or shortfall) is £200,000 in this year alone and some £500,000 since LGR. This is adding to the considerable pressures on the revenue budget. Additionally, partly as a result of last year's exceptional weather, the revenue budget was overspent by £58,000 and this year's cash limit has been reduced by that amount by way of "repayment". Policy and Resources set aside £500,000 for the costs associated with storm and flood damage: £300,000 for Education and £200,000 for Policy and Resources. It is proposed that £58,000 of this sum be used to reinstate the budget to its original approved level.

4. New Engineering arrangements

4.1 New engineering term maintenance contracts, covering the County Council's estate came into effect on 1 November 2001. Early indications are that the new arrangements are already working well. The contracts include simplified arrangements for financial administration, and bring a greater degree of certainty about the costs of the contracts. Improved customer service and management control have also been incorporated. These contracts account for over 60% of the revenue repairs budget, and their impact on the scope for other repairs will need to be closely monitored.

4.2 This work forms the major element of the buy-back arrangement with schools referred to earlier in the report, and is key to ensuring that the Council's services continue to remain operational with buildings safe to occupy. Schools in particular enjoy the assurance that their health and safety liabilities, which for engineering matters are considerable, are effectively discharged through these arrangements.

4.3 Prior to forming the new contracts the costs were benchmarked against a range of RICS and DfES indicators. Additionally an independent consultant was commissioned to review the contract conditions and specifically value for money aspects of the arrangements. The County Council's costs in relation to the benchmark costs were lower and in some cases significantly so.

4.4 The estimated value of these contracts over the next five years is £20m

5. Customer feedback

5.1 The department has had mechanisms in place to monitor customer feedback for many years. All correspondence is recorded; the quality and timeliness of responses is also monitored. Overall the department receives excellent feedback from its customers. The graph attached as appendix 6 indicates that 84% of clients rated the service as either excellent or good. While these results are pleasing, an improvement target of 2% a year has recently been established. A telephone survey covering 25% of all primary schools is currently being undertaken with the aim of understanding more fully schools' priorities and where improvements to the service need to be planned.

5.2 Complaints are an important source of management information and the department has robust systems in place to capture, respond and learn from complaints. Complaints broadly fall into one of three categories: poor communication, poor performance of Contractors and building defects.

6. Part 3 - New Deal for Schools (Condition) Allocation 2001/2 - Progress Report

6.1 Last year the DfES introduced the first of three years of specific allocations for Capital Repairs at Schools. The County Council's allocation was based on the Asset Management Plan submitted to the DfES. The plan identified over a five year period one of the largest repair liabilities in England. The DfES responded by awarding the County Council with an allocation reported to be the highest in England in relation to repair needs.

6.2 While the allocation is very good news it should be noted that the total repair and maintenance liabilities identified in the Asset Management Plan for Education buildings is over £230m for the next five years. Notwithstanding the significant additional resources available from the Government, it remains the case that because of existing liabilities the buildings in three years time will be in poorer condition than they are now. The NDS condition funding for the current year is £4.108m including fees.

6.3 The programme in appendix 7 comes to a total of £3.22m (excluding fees). Any further allocation in relation to this year will allow another tranche of capital repairs projects to be brought forward. Further information will be available at the meeting.

7. Temporary Buildings

7.1 The number of temporary buildings currently on County Council sites is 223.

Since the beginning of April 9 buildings have been removed and 10 added. The new sitings relate to capital projects and will be removed in due course.

7.2 Temporary buildings continue to be structurally inspected and assessed for condition on a regular basis. Following the most recent inspections the condition is as follows:

Good 97

Fair 52

Poor 33

Very Poor 41

The numbers of poor and very poor temporary buildings has increased by 16 to 74 since April. There are plans to demolish 23 of these buildings on completion of current major building projects.

8. Conclusion

8.1 The main financial pressure relates to the revenue maintenance budget. This has been the position for several years as pressure has increased, made worse more recently because of significant tender cost inflation. The budget will be managed up to the cash limit.

8.2 The most significant liabilities will impact on the capital repair allocations as witnessed by the repair liabilities in the Asset Management Plan. It would be inappropriate not to welcome the significant increase in capital made available for condition by the DfES. It remains a major function to complement this with a locally resourced capital programme, that delivers the maximum benefit to schools over the next few years and continues to address the significant maintenance liabilities the exist across the whole estate. The position in Hampshire follows the same pattern as was predicted by the Audit Commission in its study of maintenance need at schools. The attached graph at appendix 8, predicts a steeply rising maintenance need from the mid 1990s, which is not expected to peak until the end of this decade. This graph has become known as the maintenance `time bomb'.

8.3 The level of financial commitment is relatively low on capital budgets, and approval is sought to the schedules of projects in Appendices 3 and 4. Given the pressures on the revenue repairs budget the reinstatement of £58,000 to the budget from the provision for storm and flood damage is recommended.

8.4 The Director of Property, Business and Regulatory Services will develop the capital and major repairs programme for 2002/03 and 2003/04 in line with the Asset Management plan priorities and include the NDS Condition allocation. The programme for each year will be submitted to the Executive Member for Policy and Resources for approval.

Recommendations

1) That the additions to the programme of capital repairs, including those financed from the New Deal for Schools Condition Fund, be approved.

2) That £58,000 of the additional funds relating to storm damage be allocated to revenue repairs.

3) That the capital and major repairs programme for 2002/03 be developed and submitted to the Executive Member for Policy and Resources in March 2002 for approval.

List of appendices attached to this report

Appendix 1 - Commitments against capital repairs (replacement) programme and budget 2001/02

Appendix 2 - Commitments against capital repairs (major repairs) programme and budget 2001/02

Appendix 3 - Projects for addition to the capital repairs programme 2001/02

Appendix 4 Commitments against the revenue repair and maintenance budget allocations 2001/02

Appendix 5 - Executive Summary from Service Level Agreement with schools

Appendix 6 - Customer feedback analysis

Appendix 7 - NDS (Condition) programme 2001/02

Appendix 8 The Maintenance Time Bomb

Section 100D - Local Government Act 1972 - Background Papers:

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

NB the list excludes:

1. Published works.

2. Documents which disclose exempt or confidential information as defined in the Act.

File Location

None.

APPENDIX 1

POLICY & RESOURCES 2001/2

CAPITAL REPAIRS (REPLACEMENT)

Commitments (in £'000)

The above allocations relate to the replacement of major building components such as boilers, entire roofs and recladding of buildings and replacement engineering services that have reached the end of their design life.

APPENDIX 2

APPENDIX 3

Additions to Programme of Capital Repairs 2001/02

APPENDIX 4

APPENDIX 5

Executive Summary

Purpose

The SLA has been developed as a comprehensive package comprising repair and maintenance work and associated technical and professional support. The

package ensures:

· liabilities are managed for every school (irrespective of condition)

· economies of scale and purchasing power are maintained

· opportunities to integrate work and sources of funding are maximised

· access by schools to specialist services

· continuity of existing programmes

· one point of contact, 24 hours a day

· Governor's responsibilities for health and safety issues are met

2. Scope

The type of work covered by the SLA can be summarised as:

· maintenance and servicing of engineering plant, including health and safety aspects

· external redecoration and repairs

· structural and building fabric maintenance

· vandalism reinstatement

· asbestos removal

3. New Services

At the request of schools the following new services and developments are being introduced over the life of the SLA

· Health and safety auditing

· Contract Supervision (5 new staff appointed)

· Enhanced customer services

· Fire risk assessment

· Resourcing devolved capital projects

APPENDIX 6

APPENDIX 7

NDS Condition Fund Programme

The above amounts exclude fees.

APPENDIX 8