Hampshire County Council

Item 13

Cabinet

24 July 2006

Ashburton Court Repair & Refurbishment Project - Project Appraisal

Report by the Director of Property, Business and Regulatory Services

How the conclusion in this report fits with the Corporate Strategy

This scheme will impact on the delivery of the following Corporate Aims.

Aim 2 - stewardship of the environment - by providing a repaired and refurbished building that is more sustainable and significantly more energy efficient.

Aim 5 - improving services - by providing accommodation that provides a flexible working environment and enables improved service delivery.

1

Summary

1.1

This report provides Members with information on the recommended approach associated with the repair and refurbishment of Ashburton Court. Approval is sought to this project appraisal and for the submission of a planning application for determination under the Regulation 3 procedures by the Regulatory Committee of the County Council. The submission is targeted for the end of July 2006. This report sets out the key issues associated with this major complex project and clarifies the response and approach to its design and implementation at this important stage.

1.2

Summary of Options

Of the three options (repair, refurbish or re-provide), best value comes from the one that best meets existing and future liabilities and provides the greatest value for the lowest cost. The refurbishment option not only meets the liability, it reduces the running costs, it increases significantly the efficiency of use (by higher utilisation levels and additional space - 200 more staff to use the facility) and it provides new facilities (such as a 200 seat auditorium). It also allows the County Council to vacate some high- cost leased accommodation, the cost of which recurs every year on the revenue budget. The re-provision option is, in real terms, likely to provide the same benefits but at almost twice the cost. No real feasibility work was done on this option as it was considered to be unaffordable. The other alternative of leasing the equivalent accommodation would be significantly higher than the refurbishment option and provide no asset at the end of any given lease period.

1.3

There are elements of the project's scope which are the subject of negotiation with Winchester City Council. These relate, in particular, to the car park structure, cladding and repairs associated with areas that are the subject of a lease agreement between the two authorities. Progress, and ultimately conclusion of these negotiations will be reported to the Buildings, Land and Procurement Panel and the Executive Member for Policy and Resources at the appropriate time.

1.4

The Ashburton Court project was approved by the County Council and added to the Policy & Resources Capital Programme in February 2006 at a cost of £40.166 million, including fees, and other associated costs.

1.5

Accelerated Programme

Due to the accelerated pre-contract programme to secure an early start on site, minimise tender price inflation, achieve maximum certainty of cost and in order to achieve key dates and milestones there are a number of items which are not included in this project appraisal. These have not been completed and will be considered by the Buildings, Land and Procurement Panel and approved by the Executive Member for Policy and Resources at future meetings. These include a detailed whole-life cost exercise, energy costs, conclusion of the fire risk assessment and final details relating to the relocation of staff to alternative accommodation to fit with the construction programme and completion date of the end of 2008. No contract will be let for the principal works until such time as all the necessary County Council and other approvals have been obtained.

2

Current Situation

2.1

Ashburton Court was constructed in the 1960's and consists of two multi-storey office blocks above four decks of car parking (two of which are on a long lease to Winchester City Council for public car parking). Two departments, Environment and IT Services, currently occupy the office accommodation along with corporate facilities for restaurant, conference and meeting rooms in Ashburton Court East. The basement of the building includes some storage accommodation as well as facilities for Emergency Planning (including an area leased to the Hampshire Fire and Rescue Service) and the principal boiler and plant room.

2.2

The building is now some 40 years old and has given good service with limited expenditure on its fabric and services over that time. However, typical of a building of its age and design, it has now reached the point where major repair and refurbishment is necessary. Doing nothing is not an option. There is a very significant financial liability irrespective of the scope of the proposed project. Further details about the maintenance legacy, liabilities and financial plan are given later in the report.

2.3

Existing Building Issues

2.3.1

Many elements of the building are at or nearing the end of their useful life and there are considerable shortcomings in the nature of the existing accommodation. Principally, these can be summarised as:

· The car park structure and external cladding have major defects which require early action, including replacement of waterproofing membranes, repair to the concrete structure which is cracking and has suffered damage from water ingress, and the complete replacement of the precast concrete fin cladding on the street frontage due to failing fixings.

· Mechanical and electrical services, roof coverings, lifts, windows, internal lighting, ceilings and finishes require replacement in the short term.

· Outdated and inflexible office accommodation which does not meet the requirements of a modern office, the environment of which suffers from overheating, poor ventilation and disturbance from traffic noise.

· Very high energy use due to heat loss through the fabric, poorly functioning services distribution and controls, together with inefficient central plant systems.

· An aggressive visual appearance which is not sympathetic to its setting in the heart of an historic town. Unrelenting use of concrete cladding and the scale and mass of the building means that it stands out both in the local streets and in distant views as an eyesore and contrasts with the work the County Council has done elsewhere to promote the high- quality design of its buildings.

2.4

After considering the options of:

(i) essential repairs only

(ii) repair and refurbishment

(iii) total redevelopment

it is considered that a major repair and refurbishment project offers the best value option to the County Council in the medium to long term. This option would enable the essential repairs and replacement of building elements to be dovetailed with alterations within one concurrent contract that will provide efficient offices and other corporate facilities for another generation. The estimated liability for the building is at least £15 million over the next five years.

2.5

The other options were not considered value for money or affordable in the case of a complete new build replacement.

3

Opportunities

3.1

The opportunities that would be created if the repair and refurbishment option is undertaken, are as follows:

· Investment in a core freehold building which is sound in asset management terms.

· Major efficiency gains by intensifying the use of the office accommodation and increasing space on the site within the current envelope, thereby raising the capacity of the building by 25% more workstations accommodating 200 additional staff.

· Refurbishing the office accommodation to create more flexible spaces and install a modern IT infrastructure which will release opportunities for further efficiency and intensification of use over time.

· Overcoming the shortcomings of the current building and creating a healthier workplace by providing a responsive heating and ventilation system and dealing with intrusive noise disturbance.

· Providing facilities for Members, staff and visitors that benefit a wider audience.

· Surrender of existing leased accommodation elsewhere in the City and around the County and consolidation into freehold buildings, reducing rental and running costs.

· Significantly reduced energy and operating costs by installing modern efficient plant and services together with a highly insulated envelope.

· Relocating the IT Suite out of the existing inappropriate, cramped and poorly serviced accommodation in Elizabeth II Court into modern, flexibly organised and significantly risk reduced space with the provision of appropriate emergency back up and environmental control.

· Transform the visual appearance by recladding the building and the car park below, together with introducing landscaped courtyards at the upper podium level.

4

Sustainable Development

4.1

This project enables the County Council to demonstrate leadership in sustainable development and put into practice the ambition contained within policies and corporate objectives.

4.2

Sustainability has been part of the brief of this development from the start and all parties involved in the project, including the project design team and occupiers, are committed to maximising opportunities to introduce relevant and meaningful strategies that will impact in the widest sense. The following is a list of the key themes which are being implemented on this project:

· Reducing operating energy consumption by around half of the existing by replacing the envelope with modern, highly insulated materials; installing efficient plant, heating, lighting and ventilation systems; reducing solar gain and overheating in summer; recycling waste heat from mechanical plant servicing the IT Suite that is currently discarded.

· Natural ventilation using advanced engineering methods without noise intrusion and overheating, leading to significantly less energy consumption than an equivalent current standard, mechanically ventilated and cooled office building.

· Recycling of demolition materials, like the concrete cladding, into other projects in Hampshire and elsewhere.

· Re-using the concrete frame means that substantially less energy is used to construct the building than an equivalent new building.

· Maximising off-site prefabrication to reduce waste, control quality and reduce construction time.

· Enhance biodiversity in an inner city site by the introduction of landscaped courtyards.

· Overall an improved office environment with up to date technology.

4.3

As a result of the County Council's ambition to take a lead on sustainable development, The Carbon Trust (a Government sponsored organisation) is sponsoring the project as a case study to demonstrate and evaluate reductions in carbon emissions that will result from the project. The Trust is providing professional expertise, together with a financial contribution to the fees of the design team, to develop this project as an exemplar in carbon reduction.

5

Scope of Works

5.1

The scope of the proposed refurbishment, including the additional accommodation and major repairs is as follows:

· Strip the existing buildings above the podium level back to the concrete frame and remove all cladding, roofing, services, internal walls, fixtures and fittings. This will include the removal of all asbestos based materials which are substantial given the age of the building. Asbestos is present in underslab insulation, fire barriers, seals around windows, pipework insulation and many other areas. Its removal will be undertaken in a controlled environment in full accordance with current legislation and best practice. Demolition will also include the removal of all high level bridge links currently joining Ashburton Court East, West and Elizabeth II Court.

· Undertake major repairs to the concrete structure of the car park, lay new waterproof surfaces to prevent further harmful water ingress and remove the concrete fin cladding at low level.

· Construct a new envelope to the building by recladding the external walls of both the offices and the car park below. The street facing facades to include a red brick facing, more in keeping with the local setting.

· Cut back the top floor of Ashburton Court West and North to reduce the scale and apparent bulk of the building from street level. The accommodation reduction is more than compensated by infilling under the buildings at podium level.

· Close the top deck car park and re-provide the car parking capacity elsewhere (refer to later section in the report for details of car parking solutions). Fill in under the building footprint at podium level with additional office and other accommodation including the IT Suite, meeting rooms, catering kitchen and fitness/changing facilities.

· Construct new single storey pavilion buildings on the podium level containing a replacement reception, 200 seat conference room, restaurant/café and circulation spaces linking the buildings together internally.

· Remodel the entrance to Elizabeth II Court to accommodate ramped access and undertake alterations to the existing staircase and lift to facilitate access from Elizabeth II Court into the new reception at the podium level. The intention is to create a new central reception which is more welcoming, spacious and accessible than currently.

· Adaptation of the delivery arrangements off Tower Street following the closure of vehicular access to the top podium level.

6

Design Proposals

6.1

It is proposed that a number of strands will be brought together into a cohesive design which responds to the opportunities referred to earlier in the report. By recladding the building, facing it with brick on the street elevations and cutting back the top floors to Ashburton Court North and West, the visual impact is transformed and the building will fit more sensitively into its setting. By introducing a deeply modelled external façade comprising vertical bays rather than the existing strident uncompromising horizontal concrete facade, the visual bulk of the building is reduced. This also provides shading from the solar gain. Good levels of daylight will be provided so there can be a subsequent reduction in artificial lighting and thus, energy consumption, where appropriate.

6.2

Replacing the existing conference and restaurant facilities on the podium level means that they can be located next to reception and function together in a more flexible and appropriate way.

6.3

The IT Suite will be located on the podium level to the north where it is more secure and can take advantage of the higher floor-to-floor levels compared to office floors above.

6.4

A new ramped access to the podium level for pedestrians from Sussex Street will be provided connecting to the new reception facilities. The main visitor entrance and front door will continue to be from the High Street via Elizabeth II Court. Access will also be provided from Sussex Street for visitors and staff approaching from the north and the railway station. There will be opportunities for security controlled, managed access and egress for staff at other locations around the perimeter.

6.5

Two new landscaped courtyards will be constructed at podium level. These will be different in character and provide opportunities to spill out from the café and conference facilities in good weather, together with somewhere for Members and staff to take a break. They will also provide good views from the upper level courtyard facing offices.

6.6

An engineered natural ventilation system will function by drawing air in from the courtyard elevations which are noise free, across the open office environment and rise up through new concealed ducts on the street façade. Roof level devices will use wind and air movement to provide suction that drives the ventilation. The proposal has been tested by both computer simulation and wind tunnel models to ensure it will function as designed. The system will operate automatically without the need for staff to open windows. However, opening windows will still be provided so that staff can have local control should they wish. Particular areas of the building like the IT Suite, conference and meeting rooms will have mechanical ventilation and cooling as required in order to maintain comfort conditions where natural ventilation is not possible.

6.7

A Fire Risk Assessment has been undertaken in conjunction with Hampshire Fire and Rescue Service and the risk to most of the building is low and a sprinkler system will not be incorporated. In the case of high risk areas like the IT Suite and potentially the kitchen, purpose designed fire suppression systems will be installed to eliminate the risk of fire spreading within and to other neighbouring areas.

6.8

A thorough Access Audit has been undertaken and the refurbished buildings will be brought up to current best practice standard for users with disabilities. New ramps will be constructed to replace stairs and steep inclines and facilitate direct access for wheelchair and non-ambulant users to Elizabeth II Court and Ashburton Court. Lifts will be replaced with fully compliant accessible lifts which will operate in the event of emergency escape. All areas in the offices will be accessible with new toilet provision. The complete refurbishment will enable all spaces, finishes and furniture to be designed in accordance with current best practice.

7

Project Team

7.1

A project team has been assembled to provide the required expertise and quality to support the County Council in delivering the project. Senior Managers from Property, Business and Regulatory Services are taking lead roles in the management, design, planning and delivery of this complex project.

7.2

The project team has been assembled as follows:

· Project Managers, MACE, have been selected through open tender, interview and rigorous analysis on the basis of their track record and ability in managing the delivery of ambitious, high-quality projects, in particular major office developments and refurbishments for `blue chip' companies like British Airways, Royal Bank of Scotland, Wessex Water and many others. They are considered one of the top progressive professional companies in the Country and have very significant resources and skills.

· Architects, Bennetts Associates and Services Engineers, Ernest Griffiths & Son were also selected through an open tender arrangement. It was considered appropriate to select a partnership of architect and services engineer who have worked together on projects of this nature and could demonstrate leadership in major sustainable office design and environmental engineering. External architects were selected to complement the skills of the in-house teams who are more familiar with other building types. Bennetts Associates have won many prestigious awards and commissions and are currently `Architect of the Year' as voted by Building Design. They are also recognised leaders in sustainable design and have implemented projects which set benchmarks in low energy.

· Structural engineers and cost consultants have been selected from the County Council's existing partnering arrangements.

· A range of specialist advisors have been employed to support the project team on planning matters, ecology, catering, acoustics, thermal computer modelling and landscape.

· One of the County Council's Framework Contractors, HBG, has been appointed to work with the project team from the start of the design to support and advise on programme, logistics, procurement and buildability. This builds on current collaborative working initiatives to involve the industry early in major projects and benefit from their expertise, ownership and access to sub-contractor involvement to reduce risks and give greater cost certainty. HBG has successfully completed many major projects for the County Council, including three of the Enhance new build projects and John Hanson Community School.

8

Temporary Catering Arrangements

8.1

During the refurbishment works, the Castle Restaurant in Ashburton Court East will close. HC3S will make arrangements to continue to provide catering services for meetings around the Castle complex. Member functions and events will continue to be catered for by alternative arrangements to supply hot and cold food as required. All catering staff will be deployed during the contract period and it is proposed that HC3S will provide catering facilities on site to the Contractor's operatives using kitchen facilities situated within the Contractor's temporary site.

Details of the catering proposals are contained in Appendix 1.

9

Communication Strategy

9.1

A Communications Strategy has been produced by Corporate Communications and the Director of Property, Business and Regulatory Services, which covers both internal and external arrangements. Its objective is to aid the process for securing planning permission; engage and consult with the public, staff and other interested parties; ensure the cost of the project are explained, and set in the correct context; explain why the refurbishment is necessary; and to promote the positive opportunities the project presents.

9.2

Pre-Application Consultations

Public consultation prior to the submission of the planning application was completed between 29 June 2006 and 10 July 2006 (inclusive). An exhibition was mounted in the Information Centre in Winchester, with public opening evenings in the Conference Room of Ashburton Court on 03 and 06 July 2006. Letters were sent to local residents informing them of the events. The exhibition was also available for staff to view in the Castle Restaurant with a presentations to staff. Both the staff and public have been invited to comment on the proposals and their responses will be used to inform the preparation of detailed design proposals, the proposed mitigation measures and the management of the construction contract. Details of the responses will accompany the planning application and are summarised in Section 10.

9.3

Dedicated Website

9.3.1

A website on Hantsnet, accessible to members and staff, was launched on Wednesday 28 June 2006. The website gives details of the proposals for Ashburton Court, latest news, associated issues relating to car parking and catering, along with a question and answer section. A dedicated e-mail address has also been set up for staff to raise any issues/queries.

9.4

It is proposed to have a Members' update on issues such as car parking, catering and meeting rooms etc. throughout the project.

9.5

Liaison with Winchester City Council

9.5.1

A regular monthly meeting has been set up with Officers from Winchester City Council to brief them on issues which have a direct impact on their elements of the project, in particular car parking repairs, operational impact on the public car park, adjacent streets and Park and Ride.

9.6

All external communications to press, public and other interested parties is being channelled through the Director of Property, Business and Regulatory Services and the Leader of the County Council. Press briefings are being arranged at appropriate stages of the project programme to explain the County Council's approach and to ensure key information is provided on the reasons for, and context behind, the project.

9.7

Local County Council and City Council Members have been briefed on the project proposals and they were asked for any comments or views they may have.

9.8

A Communication Officer dedicated to the project has been identified in the Property Services Team and is working with Corporate Communications and nominated representatives in the departments affected - particularly IT Services and Environment.

9.9

Staff and User Involvement

9.9.1

A Corporate Client Group has been established with representatives from IT Services, Environment, Chief Executives, Human Resources and the Project Team, including the Project Manager and Architect. This is the forum where operational and briefing matters are debated and agreed. This also forms the communication channel for information to departments and staff about on-going work.

9.10

Questionnaires and Utilisation Studies

9.10.1

A questionnaire has been sent to staff in the existing building to gather information, views and perceptions about working in Ashburton Court. The results of this are currently being evaluated and will be shared with managers and staff of the departments affected. These, together with utilisation studies of existing office space, will inform the development of the design, communication strategy and brief for future working patterns that take advantage of the refurbished buildings services and facilities.

10

Outcome of Pre-Application Consultations

10.1

The responses received by 11 July 2006 were as follows:

a. From Members of the Public:

- 11 telephone response

- 17 written responses

- 5 e-mails

b. From Staff:

- 10 written responses

- 43 e-mails

10.2

These contained a mix of general and specific comments which have been extracted and categorised into the following:

Public Responses:

a. 12 specific expressions of support for the proposals were received,
including comments on:

- improved appearance

- retention of the County Council in Winchester

- retention of public car parking

- better value than repairing option

- need for measures to minimise disruption

b. 2 specific expressions of opposition to the proposals were received
and contained comments relating to:

- cost

- preference for demolition and total redevelopment

c. Further information was sought on a range of issues including:

- would compulsory purchase be required of any adjoining property?

- what protection would be provided to local residents from impact of works?

- will existing recycling facilities be re-provided?

- impact on surrounding residential properties

- availability of overnight parking

- how will noise be minimised

- will any trees in Sussex Street or Tower Street be lost?

d. Comments proposing changes to the current design scheme included:

- vary the roof line to break horizontal emphasis

- retain and extend the public car parking

- Park and Ride measures should be extended for public as well as County Council

- provide flexible accommodation that can be used by the public

- retain and extend tree planting

10.3

Staff Responses:

a. 12 specific expressions of support for the proposals were received, including comments on:

- visually a greater improvement

- sustainability agenda reflected well and will contribute to a good environmental profile for the project

b. 6 specific expressions of opposition, including comments on:

- need to demolish

- absence of solar panels

- should spend the money on the elderly

- further destruction of flower meadow at Bar End

- new façade will become as despised as existing

- the relevance of consultation

c. Clarification was sought on a range of issues, including:

- provision of secure storage for bicycles and motorcycles

- will existing re-cycling facilities be re-provided/extended?

- will solar panels and grey water systems be provided?

- will sufficient window space and natural lighting be provided?

- could seating be provided in the courtyard?

- detailed operational issues for office users such as equipment stores

- fire evacuation/fire fighting arrangements

- will energy saving lighting/power circuits be provided?

10.4

d. Comments from staff proposing changes to the current design
scheme, included:

- preference for air conditioning to be provided

- provide adequate meeting rooms

- remove narrow stairwells to car park

- more energy saving measures

- secure motorcycle parking to be provided

- pedestrian access to corners of the building to be provided

- more substantial planting to courtyard areas

The comments received will be considered for inclusion in the design proposals as they are worked up in detail. Information on the responses received to the pre-application consultation will accompany the detailed planning application.

11

Consultation with local County Council Members

11.1

Both local Members, Councillors Mrs Pam Peskett and Mrs Phrynette Dickens, have been informed of the proposals. Councillor Mrs Peskett has expressed her support of the proposed scheme, provided an adequate strategy is drawn up regarding a Travel Plan and long-term parking provision. Councillor Mrs Dickens has not commented on the proposals, owing to her membership of the Regulatory Committee which will consider the planning application when submitted.

12

Parking Solutions

12.1

The current Headquarters car parking facilities will be affected by the project. The development of the top deck (currently the largest car park) for accommodation and other ancillary spaces, will take approximately 40% of the capacity permanently out of use. Plans have been developed to compensate for this loss with the construction of a new Park and Ride on land owned by the County Council at Bar End, adjacent to the City's existing Park and Ride. Construction began in June with completion due in September. This new capacity means that all permit holders can be accommodated and that, overall, the total capacity will remain unaffected, although a significant proportion will no longer be in the centre of the office complex. Departments will shortly be given their new permit allocations and will be asked to decide how they should be distributed among the existing permit holders.

12.2

Members' parking will remain available at Headquarters. However, the capacity to accommodate visitors will be severely limited; blue badge-holding visitors with disabilities will be given priority by arrangement.

12.3

There is likely to be some intermittent disruption for staff who continue to park at Headquarters arising from the effects of the contracting operations. The implications are currently being quantified.

12.4

As part of the strategy to reduce inconvenience, and mitigate the impact, staff will be encouraged to make greater use of alternative transport options including public transport and `pool cars' for business visits. Staff in the departments directly affected by the refurbishment works will be moved to alternative accommodation both in Winchester and elsewhere. Their car parking arrangements will be modified to suit when the details of decanting arrangements are finalised.

12.5

During the course of the project, further work will be done in order to develop a long term sustainable strategy for parking at Headquarters. The conclusions emerging from this exercise will be reported to Members in due course.

13

Statutory Planning Process and Consultations

13.1

Planning approval for the proposed works to Ashburton Court will need to be secured through the submission of a detailed planning application which will need to be determined by the County Council's Regulatory Committee under the Regulation 3 procedures. The required pre-application consultations are described above and the results of which will shape the final form of the proposals before their submission for planning consent.

13.2

Environmental Impact Assessment

13.2.1

Major developments are covered by the Environmental Impact Assessment (EIA) Regulations and although it is not expected, the proposed refurbishment will require an EIA. An application for a screening direction has been made to the Government Office for the South East in order to avoid possible delays or challenge after the submission of a planning application.

13.3

Role of Winchester City Council as the Local Planning Authority

13.3.1

Winchester City Council will be formally consulted under the Regulation 3 procedures and its response will take into account in any representations made for or against the proposals. The Winchester District Local Plan contains policies which seek to restrict the growth of office floor space in central Winchester but it also contains exceptions which could be applied to the County Council's proposals.

13.4

It is anticipated that the planning application will be submitted at the end of July following the receipt of the EIA screening opinion.

13.5

A referral to the Minister (with possible `call in') or delay in securing a decision on the Listed Building application relating to the works to Elizabeth II Court, could cause delays to the programme.

14

Negotiations with Leaseholders

14.1

Negotiations are underway with the holders of leases of areas within Ashburton Court regarding the design of the proposed works and the impact on their lease holdings:

i) Winchester City Council who lease the two middle decks of car parking and public conveniences on Tower Street which are held on a 200 year peppercorn lease with 160 years unexpired

ii) Hampshire Fire and Rescue Service who have a licence for the use of three rooms within the Emergency Planning area, which is located in the basement, and also for aerials erected on the roof of the building

iii) Scottish and Southern Electricity have the lease of a sub-station site in the North West corner of the building.

14.2

The negotiations with Winchester City Council will include the apportionment of costs of necessary repairs as well as agreeing working arrangements to minimise the impact of the proposed works on the continuing operation of the car park. It is anticipated that the Hampshire Fire and Rescue Service requirement will be re-provided in conjunction with the revised facilities for Emergency Planning. The Scottish and Southern Electricity sub-station will continue to be required for the supply which it provides to the County Council's headquarters complex and negotiations are underway regarding any variation of the lease terms as part of the renewal of mains services to the building.

15

Project Strategy and Implementation

15.1

As noted in Section 7 above, the project team has been picked on the basis of their track record, their experience of working collaboratively and representing the very best professional skills. The team, including the Framework Contractor (HBG), have been challenged to achieve best practice through the project arrangements. The major framework has been operating within Hampshire County Council for three years and provides the opportunity for integrated working and the joint management of risk, which is particularly relevant for a project of this nature. Ashburton Court will pick up from the successful Enhance programme, in which HBG were significantly involved, and will be a demonstration project for integrated working.

15.2

Master Programme

A master programme has been produced to achieve a completion date of the end of 2008, with a start on site of major construction activity planned for early 2007. This is enclosed at Appendix 2. A phased strategy is considered important both to manage the relocation of staff and also to respect the most effective working of construction activity through the existing blocks. It seeks to minimise the period of interface between staff and construction works. The programme reflects a balance between running too fast and taking too long which will incur time related costs from the contracting team, including the supply chains, and will also impact on the support costs, e.g staff relocation. The main work could commence in East Block, with the work to the North Block commencing four months later and the West Block following after a further month. Detailed consideration of the implications of this option would need to be discussed with the Director of Environment.

15.3

A detailed pre-contract programme has also been prepared to identify all the key activities and essential milestones for the project decisions and approvals . These include the investigation work required to inform the design and briefing process, the outline design strategy, the consultation and planning process, and the detailed design and procurement. The management of the site operations will be monitored through the Contractor's programme. The opportunity could also be taken to undertake advance works where this will help facilitate the construction programme, better inform the design process and address some inherent risks with the structure of the car park.

15.4

Enabling Works

The enabling work referred to above includes the construction of the County Council's Park and Ride facility at Bar End, the removal of limpet asbestos to the soffit of East Block, and the erection of protective hoardings prior to the removal of the fins to car park elevations once planning permission has been granted. The early fin removal provides further benefit when removing the main concrete cladding to the existing accommodation, which can be undertaken through a safer methodology, and also addresses the current risk of the condition of the car park as referred to in 14.3 above.

15.5

Due to costs, risk, safety and general operational reasons, consideration has been given to relocate all staff from West and North Blocks earlier in the programme. This is now the preferred option. While it may be more disruptive to the services, once staff are moved out entirely, benefits flow to the project which enables the Contractor to have possession of the whole site, plan and progress works more efficiently and complete the project earlier than if it were two consecutive phases. The risk of delays are reduced and the savings to the construction works will compensate for the need to provide increased decanting capacity.

15.6

The temporary relocation arrangements for staff will comprise the initial move for IT Services from East Block to Capital House in the Summer of 2006. The staff in North and West Blocks will be temporarily relocated to Capital House and other potential locations in Winchester, Eastleigh and elsewhere. Further temporary accommodation is currently being sought to house the remaining staff currently located in North and West Blocks. On the completion of East Block, the first group of staff can be relocated back.

15.7

It should be noted that there is still a risk to the project as the remaining temporary accommodation has not yet been secured. Officers are currently actively seeking suitable accommodation that would complete the necessary capacity. On completion of the project, Capital House will be disposed of and any temporary leased accommodation will either be re-used as part of the on-going corporate consolidation of offices or surrendered.

15.8

The Major Framework procedures provide the structure and opportunity to work collaboratively and manage risk. This will comprise regular workshops with the whole team and the contractor contributing to key design decisions including site set up, access etc. The agreement of production information, the basis of package documentation for tender, the selection of specialists and subcontractors to be invited to tender will all be openly discussed and agreed. The key packages will include demolition/asbestos removal, cladding, and the mechanical and electrical services. The management tools will include standard tracking schedules noting key dates, design responsibility, cost checking and reference to risk management.

16

Cost Appraisal/Value for Money

16.1

As noted in Section 2 of this report, there is a major maintenance legacy and "to do nothing" is not an option. If the County Council was not embarking on the proposed refurbishment works, then a programme of maintenance and repair works would be necessary.

16.2

A maintenance led programme would require moving staff out to address the removal of asbestos, the upgrading of services and the consequential replacement and improvement of the internal spaces and finishings. An Asset Management condition assessment has been produced identifying an approximate cost of £10 million for the maintenance works over the next five years, and this cost excludes fees, IT Suite, Furniture & Equipment related costs and temporary accommodation. It would also not provide the opportunity to relinquish currently held leasehold property and facilitate the rationalisation of buildings and provide for new reception and conference facilities.

16.3

Deployment of capital receipts into a major capital project such as this means that the County Council will secure long term benefits and remove the single largest maintenance liability of the built estate. By undertaking the repair and refurbishment, it will create an asset (rather than a liability) that has a future capital value or a potential income stream, should the space become surplus to requirements and become available for other uses.

16.4

For a relatively small increase in cost of around £10 million over and above a minimum repair option, there are significantly more benefits in terms of efficiency and value for money. Were the minimum repair option to be taken forward, benefits relating to the surrender of long term leases of other offices, more flexible offices and improved corporate facilities would not flow. A short term capital investment which reduces overheads leads to the opportunity for revenue savings to be reinvested into improving services year on year.

16.5

The financial plan is enclosed as confidential Appendix 3 and includes the funding strategy reported to Cabinet on 24 October 2005, a summary of which is included as confidential Appendix 4. All costs are based at November 2005. The plan notes the additional works not included within the approved financial envelope which require to be funded by departments, and the costs that will arise to be shared for contribution to the car park repairs, in accordance with the terms of the lease agreement.

16.6

Members will be aware that Capital House, Andover Road, Winchester, has been purchased to provide part of the temporary relocation strategy, and the intention is to dispose of this on completion of the project. The major capital receipts contribution is included in the financial plan attached in confidential Appendices 3 and 4.

16.7

As noted earlier, the opportunity will also be taken to relinquish leased accommodation around the County which is at, or nearing, the end of their terms. The refurbishment of Ashburton Court forms a major part of the office accommodation element of the Strategic Property Review.

16.8

The refurbishment cost for the accommodation, excluding the car park repairs, Park and Ride, IT Suite and FF&E, provides approximately 13,900m2 of accommodation at £1,750 m2. Excluding external works, demolition and asbestos removal, this equates to approximately £1,650 m2.
Typical benchmark new build costs for civic offices providing similar accommodation ranges in the order of £2,000 - £2,300 m2 excluding abnormals. The cost of providing a completely new development would be a minimum capital cost of £70 - £75 million due to the significance of the demolition and its effect on the adjoining infrastructure - roads, services etc increased decanting and other factors.

16.9

New furniture is to be provided to facilitate new ways of working and enable space efficiencies and the provision for additional staff through a combination of more office space and efficiencies. An element is to be funded by departments and will be the subject of discussion and agreement with the Director of Environment, the Head of IT Services and others when final decisions are made on who occupies the additional capacity created.

16.10

A risk register has been established. It will be refined as the cost plan develops, with key decisions being taken at the time of design development and procurement to jointly manage as much risk as possible pre-contract. During site operations, the project contingency will be managed on the basis of "ring fencing" sums for risk until resolved.

17

Building Economies

17.1

A whole-life costing exercise will be undertaken once the detailed design of the building has been completed. The financial analysis sets out the funding mechanism. This section reviews the building economic arguments in favour of the refurbishment option.

17.2

The funding regime using capital receipts and borrowing with the total being repaid by receipts - this allows the County Council to:

· meet its largest single maintenance liability

· reduce the annual revenue operating cost for office accommodation

· vacate relatively high-cost leased accommodation

· consider a major rationalisation of the other 60 or so offices across the county - hence providing potential income from further capital receipts.

17.3

As the receipts are generated from the Strategic Property Reviews, this allows the County Council to use `one off' receipts to have the maximum long-term benefit by reducing revenue costs over the life of the project.

17.4

The Property Reviews will generate significantly greater receipts than the cost of Ashburton Court, hence allowing support to other capital projects. This will also open up major opportunities to generate further receipts.

17.5

The other major benefit from this approach is that the increased number of workstations, and hence staff, will increase the utilisation of our headquarters. This allows a step change in efficiency and utilisation of space in headquarters. This in turn allows long-term reductions in office accommodation to be achieved, as less space is required to meet staff and service demand for new functions.

Recommendation(s)

1

That the project appraisal for Ashburton Court at an estimated cost of £40.166 million, inclusive of fees, be approved.

2

That approval be given to the submission of a planning application subject to a decision by Government Office South East on the Environmental Impact Assessment (EIA) Screening direction.

3

That future reports be submitted to the Buildings, Land and Procurement Panel for consideration and to the Executive Member Policy and Resources for decisions on a range of issues associated with the project.