Minutes:
The Chair welcomed attendees to the meeting and provided an outline of
how the call-in would proceed.
The Chair confirmed that the subject of the call-in was the decision
made by the Executive on 27 October 2020 – ‘Future Office Accommodation
Update’.
The Mayor and the Director of Regeneration and Culture were in
attendance at the meeting to explain the reasons and rationale behind the
report, and the decision that was made.
Councillor Bell, the proposer of the call-in, and one of the supporting
Members, Councillor Hubbard, were in attendance to explain why the decision had
been called-in and what should be reviewed.
In terms of the procedure to be followed at the meeting, a copy was
shown at Appendix 2 of the submitted report.
The Councillor proposing the call-in (Councillor Bell) would be afforded
15 minutes to present his case, which would include any statements from
witnesses. At the end of the
presentation, the Mayor would have the opportunity to question the proposing
Councillor for five minutes, which could include input from officers from the
relevant service area.
The Mayor/service area would then have 15 minutes to provide the reasons
for the decision, after which the proposing Councillor would have the
opportunity to question the Mayor/service area for five minutes.
The Overview and Scrutiny Board (OSB) would then be given the
opportunity to ask the proposing Councillor and the Mayor/service area
questions. Following this, the proposer
and the Mayor would each be given five minutes to present a closing submission.
Following debate by the OSB Members, a vote would be undertaken as to
whether OSB Members felt that the decision should be referred back to the
Executive for reconsideration.
The Chair invited Councillor Bell to present his case to OSB, and
explain why the decision had been called-in.
Councillor Hubbard would be sharing the 15 minute time allocation with
Councillor Bell.
Councillor Bell made the following comments as part of the presentation:
1.
Why the cost may be over £150,000;
2.
What the exact cost would be;
3.
What the money was required for;
4.
What the money would be spent on or how;
5.
What would be achieved on the spend; and
6.
No alternatives to spending £150,000 were provided. No options exploring other ways of achieving
the aim stipulated in the report were provided.
In terms of the value for money aspect, Councillor Hubbard was invited
to speak in favour of the call-in and made the following points:
At this point in the meeting, the Chair invited the Mayor to pose
factual questions to the call-in proposers, of which there were none.
The Chair invited the Mayor to present the case for the Executive; the
following comments were made:
At this point in the meeting, the Chair invited Councillor Bell to pose
any factual questions to the Mayor.
Councillor Bell commented on the unknown state of affairs at the present
time; owing to COVID-19 the requirements of office accommodation could not be
determined. It was hoped that when the
COVID-19 situation did improve, the requirements around office space would
become clearer, and it would therefore be prudent to pause this work until that
time. To undertake research/evaluative
work now would not provide value for money.
Reference was made to the current condition of the Civic Centre, and to
the proposed move to Centre North East.
It was queried why Council staff were not being used to undertake the
process of evaluating new offices, rather than appointing external consultants. In response, the Mayor advised that Council
staff would potentially be used for some of the work. It was reiterated that expenditure of up to
£100,000 was anticipated, although £150,000 was being requested in order to
accommodate increased spends. It was
recognised that the Civic Centre was no longer fit for purpose, and reference
made to research that demonstrated that working in good buildings increased
productivity. Consideration was given to
the potential cost to Council Tax payers over the last 20 years in maintaining
an environmentally inefficient building, but also in terms of staff
absence. It was indicated that a move
was unavoidable, and to delay commencing this process would be inappropriate. It was explained that this money would need
to be spent regardless of when the project commenced, and to delay the process
for a significant period of time was therefore unnecessary. It was indicated that some of the work could
be completed in-house by Council employees, but elements requiring more
specialist knowledge would require input from external sources.
At this point in the meeting, the Chair invited OSB Members to ask questions of
both Councillor Bell and the Mayor.
A Member requested clarification on how the £100,000 (potentially up to
£150,000) would be spent. In response,
the Mayor explained that when developing a building for circa. £40m, between
£4-6m would be spent on consultation, which included cost consultants,
architects, planners, designers, etc.
This spend would be part of the £40m total. It was indicated that in order to ensure a
building fit for purpose, to achieve value for money for the Council and
Council Tax payers, and to achieve the highest staff productivity, this money needed
to be spent in procuring the best advice from the most appropriate
sources. The Mayor highlighted that he
had neither priced any consultant nor negotiated any contracts with any
consultants, and there was no particular work or building currently in
mind. This procurement work would be undertaken
by Council officers.
A Member sought clarification from Councillor Bell as to whether he
would be prepared to have £100,000, or up to £150,000, spent at a future time,
when there was more certainty around the need for office space. In response, Councillor Bell made reference
to his previous enquiry of the Mayor around the utilisation of in-house Council
employees to undertake research/evaluative work. It was felt that Council employees could be
used; £150,000 to be spent on consultants for option appraisal purposes was a
lot of money. It was indicated that the
requirements around office space were unknown at present and that a pause in
proceedings would be preferred (so as to avoid the need of revisiting option
appraisal work post-COVID-19). It was
felt that in-house staff should be used wherever possible in order to save on
cost; expenditure of £150,000 did not offer value for money. The Mayor clarified that the purpose of this
work was not to guesstimate staff levels at a specific point in the future, but
was instead concerned with establishing the most appropriate design for a
building (its shape, locality, facilities, etc.), and then scale up from
there. This was the beginning of a three
year process and plans could be adjusted as the project developed. Essentially, the money needed to be spent,
and could not be saved through delaying the start of the project.
A Member made reference to the Civic Centre and queried whether a survey
had been completed as to its current condition and potential lifespan. In response, the Mayor advised that
consultants will have reviewed the building in the past. The Director of Regeneration and Culture
provided details of the work carried-out to date, together with potential next
steps. A lot of examination work around
the different options available had been undertaken previously, which had
included completion of relevant surveys and consideration of the future
maintenance liability of the Civic Centre.
This was then compared against various options, including new builds,
and this was how the decision regarding a potential move to Centre North East
was reached. As the Council would no
longer be moving to Centre North East, further work was now required. Details were provided in relation to the
comparative analysis work undertaken in respect of different accommodation
options. In terms of the previous work
carried-out in respect of the Civic Centre, this would be revisited again
because things will have changed. This
would be a key factor in any options appraisal work carried out. The Mayor felt that the Civic Centre was no
longer fit for office use, unless the same amount of money for a new build the
same size was spent on it. Mention was
made of alternative uses; the Council had been advised that the building could
potentially be converted for residential use.
In response to a supplementary question, the Director of Regeneration
and Culture confirmed that the previous report regarding the Civic Centre could
be provided. There was no categorical
lifespan determined, but that report would be circulated to all Members of the
Board for information.
A Member referred to a previous report prepared in respect of the Civic
Centre, which suggested that expenditure of £1.7m was required for immediate
maintenance improvements to make it fit for purpose. Further, almost half of the total maintenance
improvements required to make it a suitable building for staff would need to be
spent in the first five years, and would cost £6.4m. Consideration was given to the current
condition of the building, with reference being made to the presence of
asbestos, a lack of disabled toilet facilities, a lack of fire escape refuge
space, and poor air conditioning/heating systems. It was queried why an assessment of how long
the delay might be with the £150,000 being spent was not included in the
report, and why financial details regarding the upkeep of the Civic Centre for
the time taken to reach the end of this project were not included in the
report. In response, the Mayor acknowledged
that it was possible that more information could have been included in the
report in terms of timescale/delay information, although it was felt clear that
if plans for development of a building were in progress, then this was at an
early stage. Construction of a new
building would take between one and five years, and therefore it would be a few
years before Council staff could move in.
The Member accepted this view, but commented that in reports such as
this, it was important to ensure that as much detail as possible was included,
and that the terms and language contained within these were clear and
appropriate.
A Member referred to the comments made regarding staff productivity and
highlighted that Council staff would now be working in the Civic Centre for
potentially three or four more years. In
reference to the condition of the building, it was queried what message would
be conveyed to staff in this regard. In
response, the Mayor felt that the decision to halt the move from Civic Centre
into the new building was 100% correct, as it had created jobs in the Town
Centre and ensured that public finances had been cared for. It was explained that Council staff were
important, but Middlesbrough as an entirety needed to be cared for. The fit out for the building for Council
staff would potentially have been £2-3m plus, and whether it would have been
suitable for the Council’s requirements was unknown. It was highlighted that Council staff
deserved a good building to work in; the message to staff would be that the
most intelligent, welcoming, friendly, social and affordable building, with
excellent green credentials and longevity, which the whole of Middlesbrough
could be proud of, would be provided.
A short discussion took place regarding Council staff, many of whom were
committed and hardworking, and who deserved a positive environment in which to
work. The Mayor highlighted that he
needed to decide what to do in the best interests of both staff and the whole
of Middlesbrough.
A Member agreed with the view that it would be prudent to delay spending
the money until the situation with COVID-19 had improved. It was queried how the £150,000 would be
spent. In response, the Director of
Regeneration and Culture explained that the reason why there was no information
detailing this in the report was because it largely depended upon what
potential options were pursued. If, for
example, refurbishment options were shortlisted, this would require expenditure
on testing the condition of the pre-existing building (such as checking the
structure and foundations, operation of the lifts, etc.). Alternatively, if examining the option for a
new build, the money would be spent on such aspects as design for mechanical
engineering. Therefore, a breakdown of
spends could not be provided until the work to narrow down the options had been
completed. Expenditure on external
consultancy services would only be made when it was necessary to evaluate
specific projects, once the options had been narrowed down.
A Member queried insurance cover in relation to external advice being
sought, in particular, whether the Council would be covered if poor
advice/practice resulted in significant financial expenditure for the
Council. Supplementary to this, it was
also queried whether, if this were not the case, would it be more appropriate
to spend the money on in-house training to ensure receipt of a full and factual
internal report. In response, the Mayor
confirmed that anybody providing professional services were legally required
to, and almost certainly would have, professional indemnity insurance in place,
which would allow for any large financial claims to be made against the
providers’ insurers. In terms of
training Council staff to undertake the work, it was felt that this could
happen, but as these skills were so specialised and used so infrequently, it
was not felt to be a viable option for a Local Authority of Middlesbrough’s
size to do.
In response to an enquiry regarding the maximum period of time that this
expenditure could be delayed for, the Mayor advised that nothing could be
gained in delaying this decision, as the money would need to be spent
regardless, whether in six months’ time or two years’ time. To delay this would also mean a delay to
staff moving to a more pleasant and environmentally efficient building. Consideration was given to the timeframe as
to when in-house work would be undertaken, when external consultancy work would
commence, and what tasks would be involved.
A Member referred to value for money and queried Councillor Bell’s
perspective on this. In response,
Councillor Bell indicated that this was about ensuring that the residents of
Middlesbrough received value for money in respect of their Council Tax payments
and, on this occasion, it was felt that this was not being achieved. The COVID-19 pandemic currently continued,
and it was felt that, to ensure value for money, this decision/expenditure
should be halted until it was known exactly how many Council employees would be
moved into offices, working from hubs, and working from home.
In response to an enquiry regarding major capital investment projects
and engagement in a full and detailed viability study as a starting point to
ensure successful delivery, the Mayor indicated that it was critical that,
prior to engagement in any significant project, supreme confidence in doing the
right thing was a necessity. This
included risk awareness, consultation with stakeholders, etc. Regarding viability, it was important to look
at a project carefully, seek advice from experts, seek challenge from other
people, and work out whether it was a good and sensible thing to do.
A Member made reference to the Mayor’s previous comments regarding
potential conversion of the Civic Centre for residential use, and queried
whether further details could be provided regarding this. In response, the Mayor advised that
Middlesbrough Council had not commissioned or solicited any work. Two private developers had independently
approached Council officers and suggested that they would be interested in
converting the Civic Centre. They had
undertaken their own work and studies, looked up plans and believed there was
some viability there.
A short discussion ensued regarding Council staff. The Mayor reiterated the view that many were
committed and hardworking and deserved a positive environment in which to work.
At this point in the meeting, the Chair invited the Mayor to present a
closing submission. The following points
were made:
At this point in the meeting, the Chair invited Councillor Bell to
present a closing submission. The
following points were made:
At this point in the meeting, the Chair invited the OSB Members to
debate the information provided. The
following points were made:
At this point in the meeting, the Chair advised the OSB Members that a
vote on whether to refer the decision back to the Executive would be
undertaken. The decision to refer the decision
back to the Executive was unanimous.
The Board was of the view that the original report
to the Executive did not contain the sufficient level of detail required to
make an informed decision, and therefore as part of its referral, the Board
proposed the following recommendations to assist the Executive:
ORDERED:
1. That the Executive decision of 27 October 2020 regarding the
‘Future Office Accommodation Update’ be referred back to the decision maker for
reconsideration; and
2. That the Executive held regard for the following recommendations
when reconsidering the decision:
·
That the report be revised to include further clarity, for example,
about where the funds citied would be spent; and
·
That additional contextual information be provided in the report, as
this would be beneficial to explain the background of the original proposal and
subsequent decision.
Supporting documents: