Agenda and minutes
Resources and Governance Scrutiny Committee - Thursday, 8th November, 2018 2.00 pm
Venue: Council Ante Chamber, Level 2, Town Hall Extension
Contact: Michael Williamson
To approve as a correct record the minutes of the meeting held on 11 October 2018
The Committee agreed the minutes of the meeting held on 11 October as a correct record.
Report of the Strategic Director (Development) and City Treasurer
This is the Executive report which updates Members on the progress with the delivery of The Factory Arts Centre, including the terms for the Notice to Proceed to construction of the main works under the executed Management Contract for the delivery of The Factory and progress with the redevelopment of St John’s.
The Committee considered a report of the Strategic Director (Development) and the City Treasurer, which updated Members on the progress with the delivery of The Factory Arts Centre, including the terms for the Notice to Proceed to construction of the main works under the executed Management Contract for the delivery of The Factory and progress with the redevelopment of St John’s.
The Leader referred to the main points and themes within the report which included:-
· In line with other key cultural institutions in Manchester, The Factory committed to increasing the positive social impact of culture in the city;
· The Factory Project and the transformation of St John’s offered a strategic opportunity to create and attract over 6,000 jobs to the city with new technological, digital and creative businesses attracted by the facilities, the high quality public realm and the wider place-making benefits being developed in St John’s;
· The existing total Capital Budget for The Factory construction was £111.65 million;
· The Council had previously committed £21.6million to the capital costs of the project;
· £78.05million had been secured from HM Treasury, following the approval of the 5-case business case in January 2017 and the project had also secured stage one approval for a £7million Arts Lottery Grant in June 2017;
· The original budget was set in 2015, based on benchmark costs, to secure government funding packages. This was prior to any detailed site investigations or design work;
· A review of all project costs and potential risks to bring to light any issues that may impact on costs during the construction phase had taken place and had concluded that to deliver the vision and long-term benefits to Manchester and the wider cultural ecology, the project costs needed to increase;
· During the review period serious consideration was given by the Strategic Board to reduce the size of the building as a way to achieve the original budget, however, this would have further delayed the opening date, and the amount of shrinkage required would have fundamentally undermined and devalued the integrity and concept of what The Factory would be;
· As the original budget was set in 2015, it did not take into account the higher rates of construction inflation experienced since then and land values in the City had also risen significantly during this period;
· The original project budget also did not take into account the longer design and construction periods necessitated by the complexity of the design, the unique challenges posed by the site and the need to resolve these before commencing permanent works;
· As such, budget increase of £18.97million, funded by capital receipts and a Manchester Mortgage Corporation dividend, providing a total capital budget of £130.62million was proposed;
· A virement of £4.3million from the Sustaining Key Initiatives Capital Budget was also requested to fund £1.286million land acquisition costs;
· To date over 90% cost certainty has been reached; and
· A fundraising committee has been established, chaired by Sir Howard Bernstein, with a target of raising a minimum £5 million to support the increase in ... view the full minutes text for item 58.
Report of the Strategic Director (Development)
This report provides information on the 2017/18 financial year’s activity in relation to S106 Agreements and specifically on associated financial obligations. It also sets out the legislative framework for negotiating S106 agreements, an update on CIL and viability, the latter a key factor in the planning process.
The Committee considered a report of the Head of Planning, Building Control and Licensing, which provided information on the 2017/18 financial year’s activity in relation to S106 Agreements and specifically on associated financial obligations. The report also set out the legislative framework for negotiating S106 agreements, and updates on the Community Infrastructure Levy (CIL) and viability assessments.
The Head of Planning, Building Control and Licensing referred to the main points and themes within the report, which included:-
· During 2017/18 year, 19 S106 agreements were signed. Of these 5 related to deeds of variation of previously signed agreements as the associated schemes had been subject to amendment;
· During the same period £999,895 was received following triggers being met from existing agreements;
· No refunds had been made during this period in relation to any financial obligation, however, there were two cases where the financial obligation was now required and these were being pursued.
· There was currently £6million held through received S106 contributions. Of this around £550,000 was awaiting to be reserved to projects;
· Details of income received against principle areas of spend since 2015/16;
· Since the concept of ‘viability’ was introduced into the NPPF, developers had sought to use viability assessments to help demonstrate why certain S106 requirements would make a scheme economically unviable;
· Viability assessments now played an important part in the planning process, however, as developers had submitted information on a confidential basis due to commercially sensitive information, assessments had until very recently not been in the public domain;
· Where a viability assessment supported a contribution through the S106 process, agreements would now include a reconciliation clause requiring a further viability test. This would allow the Council to share in any uplift and for this to increase the contributions from the original obligation; and
· The Council continued to not implement CIL in Manchester at the current time due to the concerns the approach could have on development in the wake of the down turn in the economy. It was also considered that a review of CIL and its impact should take place alongside that of the local plan (the Core Strategy).
The report also contained a breakdown of S106 agreements on a ward by ward basis.
Some of the key points that arose during the Committees discussions were:-
· There appeared to be little progress made with the delivery of S106 agreements form last year’s report and what could be done to ensure developers were delivering their agreed requirements;
· Why had neighbouring Local Authorities outperformed Manchester in S106 income received given the volume of development in Manchester;
· Was a 17% level of affordable housing in the Piccadilly Ward deemed an appropriate level;
· Was it possible for further S106 income to be spent on alleygating schemes;
· What progress had been made following the Council motion in March 2018 to require developers to provide greater transparency of viability assessments in relation to affordable housing;
· Could there be an update on the proposed new supplementary planning document (SPD) in relation to viability assessments;
· Had ... view the full minutes text for item 59.
Report of the Strategic Director (Development)
This report provides an update on the progress of the Manchester Civic Quarter Heat Network project (the “CQHN”) and the actions required to enable contract closure and commencement of the construction phase.
The Committee considered a report of the Strategic Director (Development), which provided an update on the progress of the Manchester Civic Quarter Heat Network project (the “CQHN”) and the actions required to enable contract closure and commencement of the construction phase.
The Strategic Director (Development) briefly referred to the main points and themes within the report.
The Committee expressed their satisfaction with the proposals within the project
The Committee notes:-
(1) the progress that has been made to date;
(2) the delegations agreed at the Executive meeting of 21 March 2018
(3) the remaining actions required to enable contract closure and construction and operation to commence as agreed and delegated at the Executive of 21 March 2018; and
(4) that the actions are targeted for completion in November with the aim of entering into contract with Vital Energi in December.
Report of the Strategic Director (Development)
This report covers property activity from April 2017 until March 2018. It reviews activity in Development and Investment, the Heritage Estate and the Operational Estate. The report also provides information about the strategy and initiatives to bring Heritage buildings back in to use.
The Committee considered a report of the Strategic Director (Development), which informed Members of property activity from April 2017 until March 2018. The report also reviewed activity in Development and Investment, the Heritage Estate and the Operational Estate. In line with the request of the Neighbourhoods Scrutiny Committee in October 2015, the report also provided information about the strategy and initiatives to bring Heritage buildings back in to use.
The Head of Corporate Estate and Facilities referred to the main points and themes within the report, which included:-
· The delivery and operation of the Council’ Digital assets which included The Sharp Project, Space Studios Manchester and One Central Park;
· The on-going development of Manchester Airport and Enterprise Zone;
· The development of City Centre schemes involving Council assets which included Spinning fields, First Street, Jacksons Row/Bootle Street, St Johns, Heron House and Mayfield Regeneration Area;
· Work with Strategic Housing, Planning and other partners to deliver the Council’s objectives for Housing;
· Involvement in a range of initiatives to improve the quality and offer in district centres;
· Property input in relation to leisure, sport and education provision;
· The management of a programme of strategic acquisitions
· Income from the Council’s investment estate, particularly from its property interests in the Airport
· The management of the Council’s non-operational (investment) estate and transactional work;
· The provision of strategic and practical advice and support to both the management and future use of historic assets, including identifying investment for their upkeep and restoration; and
· Corporate landlord overview and delivery of the 2017/18 Asset Management Programme.
Some of the key points that arose from the Committees discussions were:-
· Could Officers provide an update on the progress that had been made with the mapping exercise of assets across the city;
· Was the information available on CPAD published in real time;
· Would Councillors have access to the information on the Council’s investment estate via CPAD;
· Clarification on who managed the Jacobs contract for the management of the Council’s non-operational (investment) estate and transactional work and what social value was derived from this contract;
· Why did the Council not undertake regular Conservation Area Appraisals as part of its Heritage assets;
· Was it anticipated that the security demands of the Town Hall would be increased when it reopens;
· What level of affordable housing would be provided as part of the developments at Angel Meadows and Toxteth Street;
· Clarification was sought as to what was meant by the re-provision of all existing social housing tenants within the Beswick area as part of the Eastlands Regeneration Framework;
· It was commented that a total of £28.4m of capital receipts were received in the year 2017/18 yet the Council was considering selling further assets to fund the increased cost of the Factory Project;
· Had the Council secure tenants at the Space Studios development and was the asset owned by the Council; and
· Was the scheme on the former Stagecoach site fully approved.
The Strategic Director (Development) advised that the mapping exercise of all Council assets had been completed ... view the full minutes text for item 61.
Appointment to the Ethical Procurement and Contract Monitoring Sub Group
The Committee are requested to agree the appointment of Councillor Reid to the membership of the Ethical Procurement and Contract Monitoring Sub Group.
The Committee was asked to agree that Councillor Reid be appointed to the Ethical Procurement and Contract Management Sub Group.
The Committee agrees that Councillor Reid is appointed to the Ethical Procurement and Contract Management Sub Group
Report of the Governance and Scrutiny Support Unit
This report provides the Committee with details of key decisions that fall within the Committee’s remit and an update on actions resulting from the Committee’s recommendations. The report also includes the Committee’s work programme, which the Committee is asked to amend as appropriate and agree.
The Committee considered a report of the Governance and Scrutiny Support Unit which contained key decisions within the Committee’s remit and responses to previous recommendations was submitted for comment. Members were also invited to agree the Committee’s future work programme.
A request was made that either an update be provided at the next meeting in relation to the Outstanding Recommendation from the Committee’s meeting in January 2018 or if an update was not possible, that this item be removed to the list of Outstanding Recommendations.
(1) Notes the report; and
(2) Agrees the future work programmes of the Committee for the remainder of the Municipal Year.