To consider and provide a recommendation to Cabinet on the proposals set out in the attached report.
Minutes:
William Benson, Chief Executive introduced the report which included the following points:
· This was a joint project with Kent County Council since 2015 – Successful funding applications received from Arts Council England for just under £900,000 and just under £4.3m from National Heritage Lottery Fund.
· Tender exercise undertaken which had resulted in appointment of Wilmott Dixon Interiors to undertake the second stage tender – who in turn tendered the work packages to their supply chain, final sum submitted of £12.1m (excess of the original estimated cost of £8.4m as at September 2018). To try and mitigate some of the excess costs, additional work was undertaken (as detailed in the report), with the outcome of a final shortfall of just under £1.6m.
· To manage the shortfall, it was proposed to seek additional contributions from partners – Kent County Council had agreed an additional sum of £400,000, TWBC would also seek to match that sum. A further request would be made to the National Heritage Lottery Fund with the outcome expected early 2020. Total fundraising was expected to raise between £1m to £1.5m.
· Further tender for the interpretation of the collection – ensure collection was displayed in an enticing and appropriate manner internally.
· Museum decant was complete, Adult Education decant was almost complete, library service scheduled to move to Royal Victoria Place Shopping Centre on 11 November 2019.
· Activity Plan underway which would continue to grow as building was developed.
Discussion included the following points:
· Further clarification was requested regarding where/why costs had risen. Contract ‘bundling’ accounted for some additional costs – lower costs were achieved by separating materials into individual component parts.
· The procurement process had now been completed and an extensive survey of the building had been undertaken. Contingency was also included within the budget with some provisional sums also captured to take account of any issues that might arise. As such, the budget was as robust as it was possible to be – the price was a compliant price as far as the contract was concerned.
· There were a number of mitigating factors that resulted in the cost increase from £8.4m to £12.1m that included currency fluctuations and an increase in construction, product and material costs. To ensure that revised costs submitted were appropriate, the Project Board commissioned a validation exercise of the figures that had been received. The exercise confirmed that the costs were broadly in line with current prices.
· In considering the overall funding, a benchmark was established to determine the extent of value engineering that would be acceptable so that there was no detrimental effect to the project as whole. Excessive value engineering would contravene the conditions as set out by the National Heritage Lottery Fund putting their funding contribution at risk.
· Further cost reductions could result in the delivery of an entirely different project.
· The funding gap was reconfirmed at just under £1.6m. This took into account the cost increases that were included in the report.
· Although there were no detailed costs available if the scheme was to be cancelled, an estimate of £1.5m was given as the figure needed to return the building to a usable state. The money given by the National Heritage Lottery Fund and Arts Council England would have to be returned, with the consequence that it was unlikely they would be willing to provide funding in the future.
· A request was made to postpone the project until after the January sales.
· The timeframe for the start of works would see hoarding in place in January 2020, followed by demolition works – not likely to start until after the end of the January sales. The work would be wholly contained within an island site, with no road closures and no pavement closures on the ‘shops side’ of Monson Road. A delay to the start of the project which would result in a detrimental effect towards the end of the project around Christmas 2021.
· During the demolition phase the hoarding would mean the entire pavement on the ‘adult education building’ side of Monson Road would be out of commission. Once the demolition process had been completed part of the pavement would be re-opened allowing for pedestrian access.
· There would be no closure of Monson Road.
· Confirmation that there would be continuous engagement with all interested parties (traders, service users, staff, public etc.). Should there be any detrimental disruption the Council would direct traders to the appropriate process to seek any relevant reductions in Business Rates.
· With regard to the additional funding requests that are as yet unconfirmed, the Report made clear that the source and the requested amount had been identified and this met with the Council’s finance procedure rules.
The decision was made taking the exempt information set out in the agenda as read.
RESOLVED – That the recommendations set out in the report be supported.
Supporting documents: