Hampshire County Council

Buildings, Land and Procurement Panel Item

3 October 2006

Revenue and Capital Repairs 2006/07 - six monthly review

Report by the Director of Property, Business and Regulatory Services

1

Introduction

1.1

This report updates Members on the current financial position for revenue and capital repairs and the New Deal for Schools (NDS) condition funding. In particular it:

· Confirms that the NDS condition funding programme for 2005/06 has been delivered in line with Government targets

· Confirms that the change in the way the Government provides support for the NDS programme will mean the full 2007/08 allocation will not be affordable for the County Council

· Proposes a more realistic fee charge to the current and future capital repairs programmes

· Brings forward proposals for the next phase of fire precautions at Elderly Persons' Homes (EPHs)

· Recommends additions to the NDS and capital repairs programme.

1.2

The allocation of resources for repairs/improvements to the Council's estate, including fire safety, will enhance the quality of the Built Estate and improve the safety of building users.

2

Revenue Repairs

2.1

Appendix 1 shows the level of commitment to date against the revenue repairs and maintenance budget is 80% of the £14.13m available with 41.1% of the financial year having elapsed. As in previous years this is explained in part by the inclusion of £3.1m of budgets which are delegated with no buy-back arrangement and therefore treated as 100% committed. The remaining £11m shows a commitment of 74%. This is still a high proportion of the budget but the figure also includes the full-year commitments under the engineering term maintenance contracts of £6.2m. Excluding these figures the remainder of the budget shows a commitment of 39.6%.

2.2

At this relatively early stage in the year the overall position is in line with expectations and, with the winter maintenance contingency provision still intact, the outturn is expected to be contained at cash limit.

3

Capital Repairs

3.1

New Deal for Schools (NDS)

The County Council's 2005/06 NDS allocation was:

2005/06

£'000

Works

9,861

Fees

1,479

Total

11,340

3.2

The conditions of the Government grant requires the 2005/06 programme to be completed by 31 August 2006, in effect creating a 17 month financial year. This has been achieved, delivering over £11m of projects to schools.

3.3

The allocations for 2006/07 and 2007/08 are as follows:

2006/07

2007/08

£'000

£'000

Works

10,957

11,116

Fees

1,644

1,667

Total

12,601

12,784

Work has already started on the 2006/07 programme approved at the Panel meeting on 4 April 2006 and commitments of £7.5m have already been made.

3.4

Members will be aware that the Government has changed the way in which it provides support for the NDS programme from 100% capital grant until 2005/06 to a combination of capital grant and supported borrowing from 2006/07. For 2006/07 this support has been provided as 60% supported borrowing and 40% capital grant - in 2007/08 this will move to 70% supported borrowing and 30% capital grant. Supported borrowing normally means that the Government provides additional revenue grant to meet in full the loan charges incurred in servicing the borrowing. However, the County Council's low grant settlement means it is significantly below the minimum floor level for grant increases and any supported borrowing allocation would only have the effect of moving the County Council closer to the floor level at which grant increases can be received.

3.5

For 2006/07 the County Council decided to continue its policy of taking up in full all supported borrowing approvals but this will no longer be affordable in 2007/08 and it is expected that only 80% of the total allocation will be available. The revised 2007/08 position, assuming a 80% take-up, is shown in the table below.

80%

2007/08

£'000

Works

8,910

Fees

1,337

Total

10,247

3.6

The Capital Repairs budget for 2006/07 is £15.5m, of which £10.2m is ring-fenced for school repairs. This figure has been increased by the value of the 2005/06 carry forward of £1.2m and the virement of the 2005/06 Advantageous Land balance of £0.5m as recommended by the Panel at its meeting on 6 June 2006. Proposals to allocate this money to address the highest strategic risk such as fire precautions in older persons homes and condition liabilities in the education estate were approved at the Panel meeting on 6 June. Further details of the proposal to upgrade the precautions at EPHs are given below. Commitments to date against these key risk areas (47.8% after allowing for full-year commitments) are broadly in line with expectations.

3.7

Fire and Arson remains the highest risk identified in the Property Services Strategic Risk Assessment (SRA) and EPHs are the highest risk category of buildings. Detailed surveys have been completed on all the County Council's EPHs and significant progress made in addressing the improvements identified. A further phase of improvements is proposed.

3.8

For homes which are not part of the proposals for reprovision or the ENHANCE programme, risk assessments have highlighted that the first priority for further investment should focus on ensuring all homes have modern fire alarms and emergency lighting provision.

3.9

To date the EPHS at Addenbrooke, Gosport; Cooper Beeches, Andover and Thurlston House, Fleet have received upgrading to the alarm and emergency lighting provision. However, eight homes still require this investment including: Stocklands, Calmore; Linden House, Lymington; Cherry Orchard, Andover; Newman Bassett, Basingstoke; Nightingale Lodge, Romsey; Cornerways, Kings Worthy; Bulmer House, Petersfield and Cranleigh Paddock, Lyndhurst.

4

Next Phase of Fire Precaution Improvements

4.1

It is proposed that in seven of the eight homes requiring modern standard fire alarms and emergency lighting these improvements are undertaken this year. Such improvements at these seven homes are estimated to cost £750,000 and can be contained within the current budget provision. Two alternatives are proposed for Stocklands due to the current consultation on future provision:

· A risk assessment of the outstanding structural fire precaution improvements required should closure be confirmed and programmed within two years has been undertaken. Under such circumstances a relatively small package of works, estimated to cost £17k, is proposed.

· Alternatively, should the home remain operational beyond October 2008, it is recommended the fire alarm and emergency lighting be upgraded as proposed for the other seven sites.

4.2

The implementation of the above works will utilise the experience and arrangements agreed with contractors for previous work of a similar nature, and establish a competitive price for the early contracts, and a platform to negotiate the remainder.

5

Fees

5.1

The Capital Repairs budget funds both the programme of works and the professional fees associated with the programme. The percentage currently allocated to fees is 6.4%. This was set in 2005/06 when the previously separate allocations for traditional and major repairs were combined (the fee level for traditional capital repairs was previously 12%). The figure is very low in comparison to other programmes e.g. NDS which attracts fees of 15% and capital programme schemes (16.5%) and it is becoming clear that the initial fee level of 6.4% is insufficient to cover the work required to deliver the programme. It is therefore proposed to increase this percentage to 12% in 2006/07, with the balance between the original and proposed fee to be funded from the contingency to minimise the impact on the programme already agreed for the year. Future years' programmes would be prepared after allowing for the higher fee percentage.

6

Additions to the Capital Repairs and NDS programmes

6.1

It is proposed to add the following to the programme to be funded from NDS and Capital Repairs:

Up to £100,000

Bridgemary School, Gosport - windows to Humanities Block

Mill Chase School, Bordon - ROSLA Block roof and water tanks

Noadswood School, Dibden Purlieu - extension to proposed flat roofing works

Portchester School - window replacement

Fryern Junior School , Chandlers Ford - roofing repairs

Bidbury Junior School, Bedhampton, Havant - roofing repairs

Manor Infant School, Farnborough - roofing repairs

Barncroft Infant School, Havant - external decorations (NDS)

Barncroft Junior School, Havant - external decorations (NDS)

Grange Junior School, Gosport - external decorations (NDS)

£100,000 to £200,000

Oak Meadow Primary School, Fareham - boiler replacement (NDS)

Testwood Foundation School, Totton - window replacement, SCOLA panel replacement and roof repairs (NDS)

Over £250,000

Winkelbury Junior School, Basingstoke - SCOLA recladding and roofing repairs

Recommendation

That the Buildings, Land and Procurement Panel advise the Executive Member for Policy and Resources that approval be given to:

1.

The proposed change in professional fee allocation within the capital repairs programme.

2.

The proposed additions to the Capital Repairs/NDS programmes as detailed in paragraph 6.1.

3.

New fire alarms and upgraded emergency lighting are installed at Linden House, Lymington; Cherry Orchard, Andover; Newman Bassett, Basingstoke; Nightingale Lodge, Romsey; Cornerways, Kings Worthy; Bulmer House, Petersfield and Cranleigh Paddock, Lyndhurst.

4.

Either a risk assessed set of minor improvements to the structural fire precaution measures at Stocklands be progressed or the fire alarm and emergency lighting is upgraded subject to the decision on future provision.

LINK(S) TO CORPORATE STRATEGY

Yes

No

Hampshire safer and more secure for all

_

Maximising well-being

_

Enhancing our quality of place

_

Budget

£'000

Commitment

£'000

%

Non-Education Services

Redecorations

554

15

2.7

Engineering servicing and repairs

1,716

1,721

100.3

Minor structural repairs

796

488

61.3

Asbestos testing

42

12

28.6

Vandalism reinstatement

111

91

82

Sub-total

3,219

2,327

72.3

Contingency

387

0

0

Delegated to schools

Delegation under LMS scheme

2,273

2,273

100

Delegation under fair funding:

Community Schools

7,059

5,747

81.4

Foundation Schools

658

658

100

Sub-total

9,990

8,678

86.9

Other Allocations

Strategic consultants

401

238

59.4

Non functional buildings

106

12

11.3

Gypsy and Traveller Sites

27

0

0

Sub-total

534

250

46.8

Total

14,130

11,255

79.7