Agenda item

That the Housing Services Manager – Development to present a report to the Council Housebuilding Cabinet Committee regarding the Phase 3 scheme budget for the Council House Building Programme to be noted and presented to the Cabinet in line with the Terms of Reference of the Council House Building Cabinet Committee.

Decision:

(1)        That the contents of this Phase 3 scheme budget for the Council House Building Programme be noted and presented to the Cabinet in line with the Terms of Reference of the Council House Building Cabinet Committee.

Rochelle Hoyte, Service Manager, Housing Development presented a report to the Cabinet Committee and advised that at the last Council House Building Cabinet Committee meeting it was requested that a view of the schemes budgeting was presented to the committee.

Phase 3

Bluemans End

Stewards Green Road

London Road

Parklands, Coopersale

Springfield and Centre Avenue

*The final account here remains unresolved due to waterlogging issue at the properties which was being resolved.

Centre Drive

Cyril Hawkins Close / Queens Road

*Still to be agreed at the end of the defects period 2023.

She advised that lessons had been learnt on how schemes going forward would be assessed financially. The introduction of ProVal was a huge asset to the development team, providing much more opportunity to consider varying costs and scheme viability before progressing schemes.

Contingencies were now reviewed on a case by case basis rather than the presumed 5-10% of a contract sum. Careful consideration was being made for the constraints identified as being recurring problems within sites. This included contamination, foundations, drainage, boundaries and ground water.

Officers also noted that some of the additions to the contract sum could have been avoided and officers would need to ensure that the lessons learned were not repeated for Phase 5 and beyond.

Councillor J Philip advised he requested this piece of work and thanked the officer for bringing to this meeting.  He asked if the new technique could be applied to the work in progress on Phase 4 which would give some indication about what we were likely to see and that would then give us a comparison of whether ProVal would give the Council the confidence that they were moving in the right direction.

Councillor A Patel stated that what had been highlighted in the report was the additional cost to the Council and asked how much of that cost was borne by the contractor as when the contractors submit their tenders they should make allowances for drainage, soil contamination etc, and were our contracts too weak to enforce upon them to build, according to the costs that they had been procured at.

He then stated that it was clear there were fundamental areas where mistakes were being made in not anticipating the actual costs and that the Council needed to sharpen up on the costs going forward.

R Hoyte agreed with Councillor Patel and advised that part of what she had done within the Framework Agreement item was to highlight that there were some noticed areas with structural engineers which was used through the current framework that we have. The previous contractor tendered for the drawings that were supplied and those drawings were not suitable for the development so they then had to be changed which meant there was additional costs which the Council had to take on because it wasn’t what the contractor had originally tendered for.

Councillor Patel stated that on that basis did the Council go for costs against the architect that designed the scheme.

R Hoyte advised that the Council was in the process of doing that now.

Councillor N Avey suggested that our legal services were not making the contracts as tight as they should be and asked who negotiated on behalf of the Council for these contracts with contractors and architects.

R Hoyte advised that as a part of the framework that we currently have they were already pre negotiated so the terms were generally the same, but each time the actual site changed there would be some differences based on that site. This was one of the biggest reasons why she wanted to go outside of the framework to give the Council the best opportunity to improve on this situation, the current framework only had one architect on it and there was no way to demonstrate any differences if there was only one architect. The architect then had his sub-contractors and that was where the process fell down as the sub-contractors have not been performing well and that was largely where the variation of cost had come from.

Councillor Patel asked if this situation was likely to happen on Phase 4.

R Hoyte advised that on Phase 4 there were two schemes that were over budget and that was due to contamination and the foundations, however, the Council have Section 106 contributions that were available to cover the costs. She advised that she would prepare a budget for Phase 4 as she had done on Phase 3 and stated that the rest of the schemes were all on budget.

Councillor D Wixley stated that on a development in Debden it included 1 bungalow and wondered if the Council House Building Programme as a whole how many bungalows were being built as they were beneficial to some people.

R Hoyte advised that she would come back to Councillor Wixley with the total number of bungalows that were proposed.

Decision:

(1)        That the contents of this Phase 3 scheme budget for the Council House Building Programme be noted and presented to the Cabinet in line with the Terms of Reference of the Council House Building Cabinet Committee.

Reason for Decision:

Set out in its Terms of Reference, the Council House Building Cabinet Committee was to monitor and report to the Council, on an annual basis, progress and expenditure concerning the Council House Building Programme. The report set out the progress made since reported at the last meeting on the 16 March 2021.

Other Options Considered and Rejected:

This report covers the scheme budgets of Phase 3 and was for noting purposes only. There were no other options for action.