To approve an increase in capital expenditure to deliver a joint customer services hub at Blueschool House.

THAT:

(a) £50k be allocated from the ICT revenue reserve to provide sufficient ICT

equipment at Blueschool House;

(b) £200k be allocated from the earmarked economy, communities and corporate

revenue reserve to support the increased costs;

(c) having regard to the continued revenue benefits identified in the revised

business case, a further £720k be approved to deliver a joint customer

services hub at Blueschool House, bringing the total estimated cost to £1.92m;

(d) the audit and governance committee be asked to identify and recommend

improvement actions to strengthen property capital project management and

control.

On 2 June 2016, the cabinet member contracts and assets approved the

establishment of a joint customer services hub at Blueschool House in Hereford. The

project involved DWP co-locating with council staff, generating a revenue income for

the council resulting in a reduction in the net premises costs for the council.

As investigative and refurbishment works have progressed it has become apparent

that the original capital estimate for the project is insufficient to deliver the full scope

of requirements. Value engineering exercises are ongoing to ensure best value is

achieved, however the current project estimates total £1.92m (an increase of £970k

relative to the original estimate).

Not to approve the increased capital budget. This is not recommended as significant

work has already been undertaken, further work would in any event be required to

reinstate the building to a useable standard, and expenditure to date would become

abortive. This would result in unbudgeted revenue budget pressures from the abortive costs and the non-delivery of the revenue saving project. It would also have

operational implications for both the council and the Department for Work and

Pensions (DWP) who will be co-locating to the refurbished Blueschool House.

Additionally there may be further costs incurred as a result of early termination of a

contract.

Not to invest in appropriate ICT at Blueschool House. This is not recommended as

existing ICT infrastructure is limited in terms of efficiency and flexibility. The ICT

investment will facilitate improved working practices including agile working.