To advise Members on the project management and financial controls in place for Capital Schemes.

The Committee considered a report on the project management and financial controls in place for capital schemes managed by Asset Management and Property Services (AMPS).

In discussion the following principal points were made:

·         Members expressed concern that there had been significant overspends on some capital schemes. This undermined the efforts being made across the organisation to control costs.  It was asked whether the Council’s approach was satisfactory and if lessons were being learned from mistakes that had occurred.

The Property Operations Manager explained some of the circumstances that could lead to overspends and outlined some additional controls that had been put in place.  He estimated that over the last twelve months 75-80% of schemes had been on time and on budget.  This compared favourably benchmarked against authorities in the West Midlands.

In reply to questions the Director of Resources commented that there had been occasions where AMPS had not had sufficient clarity from the Directorate sponsoring a scheme as to their requirements.  Many of the large schemes were sponsored by the Children and Young People’s Directorate and work was being carried out with the interim Director to implement a more consistent framework.  The AMPS was learning lessons both from schemes that had not gone as planned, such as the Riverside School development, and those that had gone particularly well.

·         A Member suggested that public sector schemes cost substantially more than they would if they were undertaken in the private sector.  It was questioned whether the Council was obtaining value for money.

The Director agreed that, although the costs charged by Amey PLC under the contract with them which ran until 2013 were monitored, there was scope for stronger challenge in some instances to ensure that, to the benefit of both the Council and of Amey, it could be demonstrated that value for money was being achieved. 

He noted that a limited number of firms based in the County were equipped to undertake the larger capital schemes.  Work with colleagues in the West Midlands was being undertaken to develop a framework to secure value for money from the larger contractors who could undertake such schemes.

·         That the transparency required of public bodies also contributed to higher costs because contractors had an indication from published documents of how much money was available for particular schemes.

·         The practice of acquiring insurance bonds for certain schemes was discussed. It was noted that these cost some £25-30k to arrange and many authorities did not use such bonds. However, in the case of the Riverside School, taking out a bond had resulted in a saving of some £600k.

·         Briefing notes were requested on the control exercised over consultants with particular reference to the Ross flood alleviation scheme and the scope for schools to undertake small schemes themselves.

·         It was requested that safe routes to schools should be incorporated into all new school build projects.

RESOLVED:

That    (a)        that the report be noted; and

(b)            briefing notes be provided on the control exercised over consultants with particular reference to the Ross flood alleviation scheme and the scope for schools to undertake small schemes themselves.