Agenda item

The Executive Member for Education, the Executive Member for Environment and Finance & Governance, the Director of Education and Partnerships and the Director of Finance submitted a report for the Executive’s consideration. The purpose of the report was to set out the case for the proposal to dispose of the Council’s freehold interest in land at Middlehaven, in order to facilitate the delivery of a new secondary free school in Middlesbrough.

Middlesbrough Council had a statutory duty to ensure there were sufficient school places. The proposed school planned to form a central pillar of the Council’s approach to planning secondary school provision as, without it, there would be insufficient places to meet the rising demand.

To meet rising demand for places, the DfE had proposed opening the school in temporary accommodation in the first instance, allowing for due diligence, design, procurement and delivery of the new school to take place by the academic year 2021/22.

It had been identified that further detailed investigations of the site were required and that a remediation strategy would need to be devised for what was emerging as an increasingly complex site. The timescales subsequently slipped to 2023/24 to allow that work to take place, with plans to provide more substantial temporary accommodation for the school for the first three years of operation.

Early DfE estimates of the cost of remediating the site to the standard required, at approximately £6.9m, raised concerns that the scheme was becoming unaffordable. Alongside the cost of preparing a temporary site, the estimated project costs escalated considerably and drew ministerial attention.

The DfE had proposed the cost of remediation be shared with Middlesbrough Council. It was agreed in principal that the cost should be deducted from the value of the site, and that should be the final price paid by the DfE. In the event that the remediation costs were greater than the site value, the additional cost was to be shared equally by the DfE and Middlesbrough Council up to a maximum cap of £1.7m each.  The Council would only agree to pay the costs of remediation that the DfE could evidence, was required to build the school.

Following more detailed site investigations, the DfE had revised the indicative remediation costings to £4.33m. Under the mechanism agreed, that would mean a Council contribution of £1.55m over and above the value of the site, which was below the cap of £1.7m.

The Council was currently checking those costs and the remediation strategy that underpinned them. Alternative approaches to the remediation were also being investigated with a view to reducing the costs and timescales involved. Further information on the remediation of the site was detailed at paragraphs 8 to 16 of the submitted report.

OPTIONS

Re-use for operational purposes - No Council operational service requirement had been identified.

Other uses - Although the site was capable of being used for other purposes, future use for the development of a secondary school was preferred. Use of the subject land for any other purpose would have left the Outwood Academy Riverside with no site on which to develop a permanent school building.

Do nothing - The property would have remained in its present state. Whilst the subject land would have been retained for potential Council use in the future, the liability and responsibility for maintaining and holding the property would have remained with the Council in the interim.

ORDERED

1.      That the sale of the subject land to the DfE, for the sum of £1,211,596 (plus fees), be approved to enable the construction of a new secondary school to be used as the permanent location for Outwood Academy Riverside.

2.      That capital funds up to the sale value of the land, plus a further sum of up to £1.7m, be utilised to assist the DfE in remediating the site subject to the DfE providing robust evidence of the costs.

REASON

To meet the Council’s requirements to generate capital receipts and bring a vacant, unused parcel of land into far more beneficial use in the future.

Disposal would facilitate the construction of the Riverside Outwood Academy, creating additional secondary school capacity to assist the Council in its statutory duty to ensure there were sufficient places to meet rising demand.

Without an appropriate site on which to permanently locate the new school, its continued operation would not be possible. The school was currently operating out of temporary accommodation until the new building was completed, and would otherwise reach full capacity by 2022/23 and be unable to accept any more pupils.

The proposal supported delivery of the Council’s Medium Term Financial Plan.