Agenda Item No
A MATTER WHICH THE CHAIRMAN HAS DECIDED IS URGENT BY REASON OF THE NEED TO PROGRESS THE PROCUREMENT PROCESS IN ORDER TO MEET THE DELIVERY TIMETABLE
The Vale of Glamorgan Council
Cabinet Meeting: 30 June, 2014
Report of the Cabinet Member for Children's Services
Update on the Implementation of the Llantwit Learning Community
Purpose of the Report
1. To inform Members of the position in respect of the implementation of the Llantwit Learning Community and to seek approval to progress procurement related activity in advance of Welsh Government approval of grant funding for the scheme, if the primary school amalgamation is approved.
1. That the Cabinet approves that the tender documents be based on Option 1( At Risk)
2. Cabinet approves the issue of a tender for the scheme and commencement of associated engagement with schools.
3. That the cabinet approve that a report is brought back to Cabinet once the tenders have been evaluated.
4. That the Cabinet recommends to Council the potential shortfall in funding be financed as set out in paragraph 18.
Reasons for the Recommendations
1. To proceed with Option 1 as set out in the timeline in Appendix A.
2. To enable the tender process to be undertaken.
3. To consider tenders received.
4. To ensure funding of the scheme.
2. At the Cabinet meeting of 16th November 2011 (Cabinet Minute C1523 refers) the Vale's Band A programme of projects was reported and approved for submission to the Welsh Government (WG) based on 50% grant support from the Welsh Government.
3. The submission of the Band A programme of projects was successful and in December 2011 a Conditional Offer was received from the Welsh Government (subject to the approval of business cases for each scheme and statutory approvals where applicable) for £10.48 Million of Welsh Government grant support towards the total cost of £20.96 Million, which will transform and enhance various schools in Llantwit Major and Barry. The availability of Welsh Government funding would be subject to prior approval of business cases for projects over £5m and business justification cases for projects under £5m.
4. The Llantwit Learning Community scheme was previously reported to cabinet on 18th November 2013 (minute C2081).
5. Following the submission of Band A of the Vale's School Investment Programme, the schemes have been further developed in consultation with Members and the Welsh Government and the Programme now includes:
Ysgol Gymraeg Nant Talwg (new 210 place primary school building).
Ysgol Gymraeg Dewi Sant (new 210 place primary school building).
Oak Field Primary and Ysgol Gymraeg Gwaun y Nant (new 210 place school building for Oak Field, extension and remodelling of Gwaun y Nant).
Llantwit Learning Community (new 420 place primary school, refurbishment of comprehensive school main block and new build to replace other buildings).
Relevant Issues and Options
6. Proposals for projects that are under £5 million total funding investment need to be submitted to WG as a Business Justification Case (BJC). These submissions require the inclusion of five cases which are dealt with in more detail in higher cost projects, these are: strategic case, economic case, commercial case, financial case and management case. BJC's are usually assessed and determined by the WG within 3-4 months of submission. BJC's have been submitted and approved for Ysgol Gymraeg Nant Talwg; Ysgol Gymraeg Dewi Sant and Oak Field / Ysgol Gymraeg Gwaun y Nant. Ysgol Gymraeg Nant Talwg is on course to open in September 2014. It is expected that the new buildings for Ysgol Gymraeg Dewi Sant and Oak Field Primary School will open in September 2015.
7. All projects with more than £5 million total funding investment are required to follow the Better Business Case (BBC), using the five case model, for business case submission. This is a three stage process including: Strategic Outline Case (SOC), Outline Business Case (OBC) and Full Business Case (FBC). This is an iterative process with information becoming more accurate and definitive as the business case moves through each stage.
8. A Strategic Outline Case for the Llantwit Learning Community has been submitted to WG and it is expected that it will be assessed in the near future. Approval of the SOC would enable the Council to move to the OBC stage. Subject to formal WG approval a joint OBC/FBC will be submitted. Full approval will not be given until the BBC has progressed through all stages. The FBC must be submitted by December of the year preceding the financial year in which funding is required. In the case of Llantwit Learning Community the FBC must be submitted before December 2014 to draw down funding from April 2015. It is expected that full approval for the grant funding will be received during February/March 2015.
9. The timing of the approval of the grant funding presents a number of risks in relation to the delivery of the Llantwit Learning Community. Appendix A shows two options in respect of the timeline for implementing the scheme. For both options it will be necessary to have carried out the tender process prior to completion of the FBC. This is to ensure the FBC includes a realistic contract price.
10. The timeline for Option 1, the 'at risk' option, would see the preferred contractor being appointed before approval of the Full Business Case. The contractor would be appointed on a 2 stage basis, with the construction phase only being entered into on full approval of the FBC by WG. Estimated costs of £300,000 would be incurred on design and development work prior to approval of the grant so that the planning application can be prepared and submitted in April 2015 with the aim of starting on site in September 2015. This option would enable the new/refurbished secondary school to open in September 2017 and the 420 place primary school building to open in September 2016.
11. It was originally intended that the new primary school building would open in September 2017. Option 1 is favourable in terms of reducing the risk associated with potential failure of the Llantilltud Fawr Primary School building. A report on this agenda proposes that Eagleswell and Llanilltud Fawr Primary Schools amalgamate from September 2015 on separate sites. If approved, advancing the opening date of the new primary school building would reduce the challenge of managing the two schools over separate sites. The estimated £210k annual revenue savings from the amalgamation of the schools on the Llantwit Learning Community site would be generated a year earlier than originally planned.
12. In Option 2: the 'FBC approved' option, the contractor would be appointed in February 2015 following approval of the FBC. This reduces the risk of expenditure being incurred in the absence of approved grant funding but would result in the opening date for the Primary school being extended to April 2017. The reason for the delay in occupying the new building are programming issues, which require a school move of this nature to occur at a suitable holiday period, so as not to have a detrimental effect on the education of the children.
13. With both options 1 and 2 it is necessary to start engaging with all schools included in the scheme to carry out educational visioning work to ensure the educational needs of the schools are included in the brief to put out to tender. This work will cost an estimated £10,000 which could be met from the School Investment Reserve pending WG approval of the FBC.
14. By selecting Option 1 the merged primary schools will be relocated into a single new building a year earlier (September 2016) and the Eagleswell site become vacant.
15. The council will competitively tender and select a contractor under the South East Wales Schools Capital Programme (SEWSCAP) framework. This reduces the procurement process as the contractors have already gone through a rigorous OJEU selection process. This will require the contractors to submit tender prices and take part in a template design competition process.
16. The contract form will be NEC 3 option C with design. This will facilitate early contractor involvement together with a collaborative approach in order to reduce risk and to deliver the greatest benefits to the scheme. The council will contractually require the contractor to maximise local skills, training and employment to a similar level as Penarth Learning Community.
Resource Implications (Financial and Employment)
17. Grant funding of £6.238M has been approved in principle by the Welsh Government. This was based on 50% of the estimated £12.476M cost of the original scheme which comprised the refurbishment of the comprehensive school only. The WG grant funding available to the Council for Band A is fixed at £10.48M (paragraph 3 refers). Following discussion with Welsh Government officials regarding additional grant funding for Ysgol Dewi Sant a positive indication was given that it would be awarded but the £743,000 additional funding was allocated from the Vale's overall grant funding envelope of £10.48M. This has reduced the grant funding available within the envelope for the Llantwit Learning Community by £743k to £5.495M.
18. The scheme is included in the capital programme at a cost of £22.10m and at that time it was assumed WG grant of £11.05m would be received. This represents a shortfall of £5.555m from the figure in the preceding paragraph. The cost of the scheme has been revised and has reduced to £19.75m. The net shortfall can be met as follows:
Llantwit Learning Community Funding shortfall
Contribution from the capital receipt for the Sale of Ysgol Maes Dyfan
Although negotiations are in progress with the successful bidder there is no contractual commitment at this time. There is a risk that this could fall through.
School Investment Reserve
Reduces funding for other schemes
To be met from the individual schools budget (ISB) as a result of revenue savings generated by the scheme. This could potentially place further pressure on the ISB.
Total Additional Funding
19. Estimated costs of £310,000 would be incurred on visioning work with the schools and design and development work with the risk of the FBC not being approved. This risk relates not only to approval of the additional grant funding requested but also to the grant funding which has been approved in principle.
Sustainability and Climate Change Implications
20. The Welsh Government requires sustainability and climate change issues to be addressed in the business case submission for grant funding.
Legal Implications (to Include Human Rights Implications)
21. The Council has a duty pursuant to Section 123 of the Local Government Act 1972 to secure the best consideration reasonably obtainable on the sale of the Eagleswell site.
Crime and Disorder Implications
22. There are no crime and disorder implications.
Equal Opportunities Implications (to include Welsh Language issues)
23. There are no equal opportunities implications arising from this matter.
24. Implementation of the School Investment Programme is a corporate objective (LS1) and contributes to Objective 2 of the Learning and Skills Service Plan (2014/18): to meet the needs of all learners by providing a range of suitable and accessible learning opportunities and facilities.
Policy Framework and Budget
25. The School Investment Programme is a matter for Executive Decision.
Consultation (including Ward Member Consultation)
26. Not applicable
Relevant Scrutiny Committee
27. Corporate Resources
Paula Ham, Head of Strategy, Community Learning & Resources
Sian Davies, Managing Director
Jane Wade, OM Property
Jennifer Hill, Director of Learning and Skills