The report of the Deputy Chief Executive and City Treasurer is now enclosed.

The Committee considered a report of the Deputy Chief Executive and City Treasurer, which provided an update on the progress with the Our Town hall project to date, including the intention to issue a Notice to Proceed (NTP) into the main construction phase of the Works.

The Deputy Leader briefly outlined the report, which contained the following key points and themes:-

·                The current status of the project, including activity to date, and the governance and procedures that were in place to manage the project through the construction period and into project completion;

·                The Council had engaged Lendlease as its Management Contractor to manage the project, procure the works, advise on risk and to contract with works package contractors who had the primary responsibility for undertaking the works;

·                The contract with the Management Contractor required that before the Council issued the NTP it had to satisfy itself that a number of key documents and dates had been agreed with the Management Contractor, including the supplemental particulars, project cost plan, date of completion, and the preliminaries cost schedule. These documents were now agreed, and as such the project was ready to progress into the construction period;

·                The Council’s Internal Audit team had reviewed the procurement process in the run-in to NTP and were satisfied that a transparent and robust process had been applied to secure the completion of RIBA stage 4;

·                The budget would become more defined by Notice to Proceed and as the various works packages were procured. However, the Council would not have cost certainty until the final account was agreed under the Management Contract; and

·                The appetite within the insurance market to cover construction risk, particularly heritage buildings, has reduced significantly in the wake of recent fires and although a range of insurers had committed to provide 100% cover for the various insurable risks, some aspects of final terms and the formal placement of cover was to be finalised and it was possible that the final terms of the insurance policies would require amendments to the Management Contract.

Some of the key points that arose from the Committees discussion were:-

·                Clarification was sought on the level of engagement that had been undertaken with insurance companies;

·                What incentives were in place for the Management Contractor to  control preliminary costs;

·                How advanced were the operational needs of the project and where these detailed in RIBA Stage 4;

·                Were there any KPI’s going to be included for the Project to address climate change;

·                Was there any detail that could be shared in relation the monitoring framework is being developed between Unite and Lendlease to ensure that this and the Unite Charter was appropriately reflected throughout the project supply chain and an assurance was sought that Trade Union representatives would being given access to the site during the course of construction; and

·                Could information be provided on how many of the apprentices currently employed on the project were Manchester residents.

The Committee was advised that there had been a large amount of engagement with Insurers to date.  It was acknowledged that heritage buildings often presented some significant fire risks due to the nature of the construction material used, especially within their roofing structures.  As such

potential insurers and brokers had been on site to view first-hand the building and the fire and flood plans and general insurance mitigation.  Consequently Insurers were now satisfied with the proposals as to how the Council and the Management Contractor were managing these risks and a set of terms for insuring the building during its construction phase.

The Our Town Hall Project Director informed the Committee that at the original point of tender with Lendlease, their preliminary and staffing costs were tendered in competition and rates were put forward which now formed the basis of the contract pricing.  What had changed since then was there was now a detailed programme of works and a detailed pricing strategy which meant that the Council could now ascertain that staffing levels were appropriate and various preliminaries associated with packages of work were procured in an open manner.  In terms of the larger elements of the preliminary works that supported the packages of work, had been procured and had cost assurety against them.  In regards to future monitoring, there was a team of professional advisors that worked alongside the project team, who valued all of the works and certified that all of the works provided value for money.

The Our Town hall Project Director provided a brief overview of the RIBA process and  explained that RIBA stage 4 was the final design stage before construction commenced.  To inform the design of the project had required a large amount of internal and external consultation with stakeholders, including the Facilities Management and Operations team, who had commented that the proposed design for the building worked from an operational perspective. It was also reported that there was a “soft landings” programme as part of the project, which would ensure that at the point the Council moved back in to the building, there was a team of aftercare engineers and constructors to make sure the building worked for its occupiers.

The Committee was advised that there were KPI’s within the construction contract that referred to addressing climate changes, such as ensuring the waste output during the construction period was significantly lower than what it would have been.  In terms of the building post refurbishment, significant improvements would be made in energy consumption which would translate into reductions in carbon load per head of occupancy.  The Committee was asked to take account that the building was a Grade 1 listed building and this meant that it would not be possible to take certain steps to mitigate it carbon emissions, that could be applied to non listed buildings.

The Our Town Hall Project Director advised that there had been several meetings between Lendlease and Unite, to develop an agreed criteria for monitoring works on site, such as compliance with minimum standards of working conditions.

Decisions

The Committee notes

(1)          That on the basis of the Tranche 1 Works Packages procured to date (60% by value), and the level of design readiness to procure the balancing Tranche 2 (40%) packages, the project is suitably advanced for the Council to commit to construct, noting the arrangements that are in place to manage the risk of cost and programme overrun in the Tranche 2 Works Packages.

(2)          That a date for completion of 22 December 2023 has been agreed with the Management Contractor.

(3)          The project cost plan (for Construction) is reported in the press excluded report that accompanies this report.

(4)          That subject to approval by the Deputy Chief Executive and City Treasurer in consultation with the Deputy Leader and the Executive Member for Finance and Human Resources to these terms, a Notice to Proceed will be issued to the Management Contractor (Lendlease) and construction will commence on site in March 2020.