Report of the Deputy Chief Executive and City Treasurer attached

This report provides an to update on the delivery of The Factory project, including: construction progress; securing the projected social value outcomes identified to be delivered collaboratively through the design team, contractors and the operator, and through Factory Academy; and the finance and fundraising position.

The Committee considered a report of the Deputy Chief Executive and City Treasurer, which provided an update on the delivery of The Factory project, including: Construction progress, securing projected social value outcomes identified to be delivered collaboratively through the design team, contractors and the operator, the Factory Academy, and the finance and fundraising position.

Key points and themes in the report included:

• The report notes the construction programme and the current completion estimate of February 2023 whereby MIF will take occupation of the building subject to the handover and commissioning plan
• Progress on site remains good although the project did suffer some supply chain and cost issues
• 81% cost certainty is expected by the end of July 2021 with this rising to 90% by March 2022
• The Council is currently negotiating the terms of an agreement for lease with MIF and the operator’s agreement
• Capital fundraising has been constrained by the pandemic but outreach work has remained positive
• Social value outcomes continue to make significant progress.

Some of the key points that arose from the Committee’s discussions were:

• The committee were glad to see that Covid-19 kickstart funding was coming to support the project and to see the reach-out by the project to a diverse audience;
• The committee sought further details on job opportunities and the impact of the project to improve Manchester’s economic diversity especially given the deprivation in some wards;
• Clarity was sought on the opportunities for local people in the construction programme with only 7% local spend being in Manchester v 58% for the Town Hall;
• The committee queried the outreach opportunities of the Factory to arts organisations within Manchester wards outside the City Centre such as the Miner’s Community Arts Centre. Outreach had been observed as communities were now becoming part of MIF family, the example were given of the children’s choir at a recent event coming from North Manchester schools and the BECTU union newsletter article on the Old Granada Studios which gave an indication of the potential impact of the project and opportunities that Manchester had to offer for the sector;
• In respect of the commercial naming rights there was a requirement for a robust due diligence process on any potential branding partner in accordance with best practice and the ethical procurement policy;
• The Committee sought clarity as to the future impact of The Factory on revenue spend and noted that as the budget quoted in the report had altered it would be good to summarise the development of the budget over the project’s course; and
• Further details were sought on the agreement around the Unite Construction Charter.

The Leader introduced the project and set out the context in that the last time Factory was raised at Committee it was in a far more difficult position than at present. Discussions were going well regarding both the Factory Academy and the long term use of the premises with the agreement for lease and operator agreement being progressed. Some Members and residents have had the opportunity to look inside and the recent Arcadia event and tours were well-received with the building regarded as magnificent.

In relation to outreach, MIF would contribute to the city’s cultural offering as demonstrated by recent performances and the Factory Academy would offer a similar degree of impact; potentially impacting upon 1000s of jobs for the cultural industry. Partners at MCDA/Arbeta/Screen Manchester were also working to provide production support in the city. The Council was looking to expand Space Studios in the future and the investment in Factory confirms to DCMS/ACE that MCC were prepared to invest alongside partners into the Arts industry. Arts organisations in Manchester had done well due to the maintenance of support, coupled with a relaxation of grant conditions by the Council that were unachievable the Council recognised the role of small organisations and the support required.

Mongoose are a MIF contract but do have a track-record of delivery in relation to external sponsorship and marketing. There was to be joint accountability from the Council and MIF in terms of the naming with an Ethics Policy being developed to set out the scope of the branding.

On the issue of local construction spend, the Town Hall project didn’t require major steelwork which came from elsewhere in Greater Manchester and as such there were material differences between the two projects. The Director of Capital Programmes stated that the original KPIs on jobs were set out in the Laing O’Rourke procurement and the supply of works is based upon Manchester jobs/training. Conversations were continuing around the Unite Construction Charter and would be revitalised.

The Deputy Chief Executive stated that the project team had done well to source complex parts of building from Greater Manchester and continued to work with Angela Harrington for Manchester residents to benefit.

Decisions

1. To note the report; and
2. Potential future reports on revenue spend to be incurred by the Council on both the Factory and Civic Quarter Heat Network.