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Novation of building works and profession services contracts from Brick by Brick for Fairfield Halls

Meeting: 17/08/2021 - Scrutiny & Overview Committee (Item 61)

61 CALL-IN: Novation of building works and profession services contracts from Brick by Brick for Fairfield Halls pdf icon PDF 171 KB

To consider and respond to the Call-In in accordance with the procedure set out in the Council’s Constitution.

Additional documents:

Minutes:

The Scrutiny & Overview Committee considered a call-in request of the key decisions set out in the ‘Novation of building works and professional services contracts from Brick by Brick for Fairfield Halls’ Cabinet report. The decisions taken in this report were made by the Cabinet at its meeting held on 26 July 2021.

The Chair of the Committee explained the process for considering a call-in, confirming that the Committee needed to agree whether to review the decision or not and if it was decided to proceed, to confirm how much time it wished to allocate for the discussion of the item. The Committee agreed that it would review the decision and allocated two hours minutes for its consideration.

The Chair went on to explain that there were three outcomes the Committee could reach as a result of its review. These were:-

  1. That no further action was necessary and the decision could be implemented as originally intended.
  2. To refer the decision back to the Cabinet for reconsideration, outlining the nature of the Committee’s concerns
  3. To refer the decision to Council, if the Committee considered that the decision taken was outside of the Budget and Policy Framework.

At the outset of the item an opportunity was given to the Committee lead on the call-in, Councillor Robert Ward, to outline the grounds for its submission. It was highlighted that both Brick by Brick and Fairfield Halls were of significant importance to the Council and as such before the decision on contract novation was made, it was important for the Scrutiny & Overview Committee to seek reassurance on a number of areas of concern.

Given there had been a significant cost increase over the lifespan of the refurbishment project, reassurance was sought that potential future costs arising from novation were both understood and under control. It was noted that an alternative option was to keep the contract with Brick by Brick, as such further explanation was sought on why this option had been rejected. As the contractual arrangements with Brick by Brick had previously been described as unusual and with the outcome from the Grant Thornton value for money review still awaited, reassurance was sought that there would not be an increased risk by proceeding with novation at this stage. Finally assurance was sought that the Council had the requisite skills in place to manage the closure of the Vinci contract going forward.

Due to the complexities of novation, it was debated whether the Committee should be asking the Cabinet to delay the implementation of its decision until after the external auditor had delivered its value for money review. The Chair of the Scrutiny & Overview Committee highlighted that as it was not yet clear when the value for money review would be finalised, it was difficult to recommend delaying the decision. Due to the potential sums involved in the novation it was important for the Committee to review the decision taken by the Cabinet in order to gain reassurance that it would deliver the  ...  view the full minutes text for item 61


Meeting: 26/07/2021 - Cabinet (Item 119)

119 Novation of building works and profession services contracts from Brick by Brick for Fairfield Halls pdf icon PDF 288 KB

Cabinet Member: Cabinet Member for Culture & Regeneration, Councillor Oliver Lewis

Officer: Interim Executive Director Place, Sarah Hayward

Key decision: yes

Decision:

The Leader of the Council delegated authority to the Cabinet to make the following decisions:

 

RESOLVED: To

 

1.             Agree to proceed with the novation of the Fairfield Halls refurbishment contracts and associated contracts, with outstanding costs to borne by the Council, once certified by the Quantity Surveyors (Chronos Ltd) (not including any potential additional remedial works)

i.              Novation of the Principal Contractor (Vinci) building works contract from Brick by Brick to the Council, and financial commitment for outstanding retentions.

ii.            Novation of the Contract Administrator (MICA Architects) contract from Brick by Brick to the Council.

iii.           Novation of the Quantity Surveying (Chronos Ltd) contract from Brick by Brick to the Council.

iv.           Novation of other professional services contracts from Brick by Brick to the Council.

v.            Assignment of completed contracts warranties and guarantees.

 

2.             Note:

i.             The recommendations above could not be made under delegated authority (as envisaged in the May Cabinet report) due to its potential overall value

ii.            Brick By Brick will continue to pay relevant contractors on the Council’s behalf whilst the recommended novations are completed, from 1st April and forecasted to August 2021 these payments are under £50,000 (managed under delegated authority)

iii.           The progress of the non-intrusive survey works

 

Minutes:

The Cabinet Member for Culture & Regeneration (Councillor Oliver Lewis) advised that the report followed on from decisions made at the Cabinet meeting held on 17 May 2021, where it was agreed to treat the heritage restoration of Fairfield Halls as capital expenditure, and agreed in principal to the novation of the contracts from Brick by Brick. The Cabinet Member advised that the paper sets out the novation of contracts from Brick by Brick to Croydon Council and highlighted the importance of the novation of contracts taking place. Furthermore, confirmation was provided that the list of contracts to be novated included all of the appropriate contracts and due diligence had been undertaken.

 

The Leader of the Opposition (Councillor Jason Perry) queried what the further costs of the novation would be and asked for clarity on where the Coast to Capital Funding had been spent. The Cabinet Member advised that the associated costs were set out in the Part B report. In addition, the Interim Executive Director Place (Sarah Hayward) advised that there was a schedule of anticipated costs within the Part B report and in relation to the Coast to Capital funding question, a response would be provided outside of the meeting.

 

The Cabinet moved the recommendation to Exclude the Press and Public (minute no. 123/21) to discuss the Part B report. The Cabinet made the decisions below in Part A following the discussion in Part B.

 

The Leader of the Council delegated authority to the Cabinet to make the following decisions:

 

RESOLVED: To

 

1.               Agree to proceed with the novation of the Fairfield Halls refurbishment contracts and associated contracts, with outstanding costs to borne by the Council, once certified by the Quantity Surveyors (Chronos Ltd) (not including any potential additional remedial works)

i.                 Novation of the Principal Contractor (Vinci) building works contract from Brick by Brick to the Council, and financial commitment for outstanding retentions.

ii.                Novation of the Contract Administrator (MICA Architects) contract from Brick by Brick to the Council.

iii.              Novation of the Quantity Surveying (Chronos Ltd) contract from Brick by Brick to the Council.

iv.              Novation of other professional services contracts from Brick by Brick to the Council.

v.               Assignment of completed contracts warranties and guarantees.

 

2.               Note:

i.                 The recommendations above could not be made under delegated authority (as envisaged in the May Cabinet report) due to its potential overall value

ii.               Brick By Brick will continue to pay relevant contractors on the Council’s behalf whilst the recommended novations are completed, from 1st April and forecasted to August 2021 these payments are under £50,000 (managed under delegated authority)

iii.              The progress of the non-intrusive survey works