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

In a report to Executive in December 2018, it was noted that Lendlease had been selected as the preferred Management Contractor for the Our Town Hall (OTH) project (Minute Exe/18/120 refers).

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 Management Contractor would assume the financial and contractual burden associated with administering the works packages, but would not undertake any of the construction works itself. The Management Contractor was to be paid a fee for its services (split between the pre-construction period and the construction period) and be reimbursed the cost of its preliminaries and overheads.

The contract with the Management Contractor required that before the Council issued the Notice to Proceed (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. It was reported that these documents had been agreed

The original capital budget for the Town Hall project of £306.1m was approved by Executive on 8 February 2017 (Minute Exe/17/27 refers) as part of the Council’s Capital Programme. Since that time the project had been through various stages of design, with the budget re-based at RIBA Stage 3 within an overall capital envelope of £305.2m. The capital movement between the original budget at February 2017 and latest budget of £305.2m was made up of transfers from the capital budget to support costs which could not be capitalised. These included design team expenses, programme managements costs, communications and minor changes on planned preventive maintenance.

At the point of NTP, the forecast capital cost projection remained at £305.2m. This allowed for budgets set aside to address residual risk and which would incorporate the costs of inflation movements, changes in scope/design and general contingencies. The overall construction budget was £243.483m. This included the value of the project cost plan and contract to be entered into with the Management Contractor, costs incurred prior to the appointment of the Management Contractor, and an allocation for other specific costs and contingencies.

Following consideration of the proposal to issue the Notice to Proceed by the Resources and Governance Scrutiny Committee at its meeting on 24 February 2020 (Minute RGSC/20/17 refers) the Deputy Chief Executive and City Treasure had taken the key decision to approve Capital Expenditure of £243,483,000 to Our Town Hall Notice to proceed with the main contract.

Decisions

1.         To note 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 was 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.         To note that a date for completion of 22 December 2023 had been agreed with the Management Contractor.

3.         To note that the Decision to give Capital Expenditure (Construction) approval to Our Town Hall in the sum of £243.483m was made, and published 27 February 2020. This decision had been considered by the Resources and Governance Scrutiny Committee at its meeting on 24 February 2020, at which it endorsed the proposed recommendations. The Notice to proceed with the main construction works was to be issued to the Management Contractor (Lendlease) and construction would commence on site in March 2020.