Agenda item

This report provides a progress update on the new Waste Depot project.

The Cabinet Member for Property and Public Engagement presented the report.

The Finance and Economic Overview and Scrutiny Committee had previously been presented with an update on the depot project on 8 May 2024. It was agreed the Committee would be provided with regular updates during the project delivery phase.

The report outlined the latest status of the projects and provided details of the activities since the last update.

A dashboard had been developed which provided a high-level summary of the project. The dashboard concluded the value engineering had been developed, undertaken in conjunction with Lindum’s but within the parameters of already approved planning permission of the development. The detailed design was the next phase in the project.

The report included movement on the original provisional dates due to the additional time it had taken to secure the value engineering savings necessary to reduce the project costs. This had taken additional time to ensure the scheme quality and operational practicality was not compromised and also to ensure any design changes did not conflict with the approved planning permission. Only when the value engineering review had been completed, could the project move to the next stage (stage 4 design) so any slippage on the value engineering phase would have a direct impact on the subsequent project phase. The summary timetable does show, however, that the current expectation was the operational go live date could still be achieved and there would be opportunities to claw back the time which had currently slipped.

A query was raised on paragraph 2.3 of the report. The value engineering had concluded with £350,000 worth of savings to reduce construction costs down to £7.9million. Clarification was sought around the figures presented.

The Deputy Chief Executive (S151 Officer) highlighted there were 2 elements to the project: project cost (delivering the project) at £8.8million and then a construction cost (direct cost incurred to Lindums for the construction of the depot) at £7.9million. £8.2million was the bid received by Lindums which went to Cabinet in April 2024. The value engineering brought the £8.2 million down to about £7.9 million, headroom of £900,000 between the cost of the construction and the overall budget of £8.8m, this difference would be used to fund the other costs associated with the delivery of the project.

It was further queried whether budget items for the outfitting and for enabling the depot to open and the full cost would not exceed £8.8m and the final cost may come in under the budget due to

It was clarified the budget for the depot was £8.8m, the construction costs were being driven down by value engineering to achieve the lowest cost possible (£7.9m), which was providing £900,000 headroom between the construction budget and the overall project budget. The £900,000 would need to be used to fund the project management, unforeseen costs, mobilisation and the fit out.

ACTION: For financial figures to be included within the dashboard, which would be brought back to every Committee.

ACTION: A breakdown of costs of each main heading of the project be included within the dashboard.

It was queried whether the £8.8m was included within the actual purchase price of the land.

The Deputy Chief Executive (S151 Officer) clarified the £8.8m was not included within acquisition of the land. The £8.8m was from the point of the project going forward to deliver a waste depot, not from historical costs from the Council acquiring the site in the first instance.

It was noted £350,000 worth of savings from the value engineering phase had been identified. It was further queried what that materially entailed for the project and whether the planning permission would be affected itself or the delay the timeline of delivery.

The report confirmed the value engineering items secured did not conflict with the planning permission.

Following the two bids received from contractors, one bidder had stated that the delivery would take 36 weeks, however, the successful bidder had stated they would require 51 weeks to deliver the project. There was a 10 week design phase being undertaken. Officers were confident that lost time due to the value engineering would be recovered through subsequent phases of the scheme.

It was emphasised the depot would be mobilised and operational by April 2026, which is when the food waste legislation required the Council to incorporate additional rounds for the collection.

One Member raised concern on what may happen, if the depot was not operational by April 2026.

The Deputy Chief Executive (S151 Officer) confirmed it was unlikely for the depot to not be operational by April 2026. However, the licence of the existing site had a restriction on the amount of vehicles that can be on the location. If the new depot was not functional by April 2026, the Council would then have to mobilise an off-site storage area, where freighters could be housed.

Clarification was sought around the project planner and the budget allocation of £500,000 for professional fees, fitting and other enabling costs.

The risk table was discussed. It was noted the value engineering was stated as ‘not achieved’ and was set as a medium risk. Value engineering had been completed; therefore, it was queried as to why it was set as ‘not achieved’ and a medium risk.

It was suggested a further breakdown be included within the table for key milestones and dates, including crucial milestones, whereby the next milestone could not be completed until the current milestone was completed.

The dashboard was produced on 6 June 2024, at that point, the value engineering exercise had not been completed. As of 27 June 2024, the value engineering phase had been completed and the project had moved into design phase. The next phase of the scheme would be within the design phase, whereby the value engineering risk would be removed.

It was suggested that the cost of the land should be included within the overall cost of the depot for reporting purposes.

The Chairman noted that previous reports to the Committee had included detailed information in regard to the cost of the land in the beginning and figures going forward. The acquisition had previously been to Full Council and all information was in the public domain.

Finance and Economic Overview and Scrutiny Committee is asked to note the current position with respect to the delivery of the new Waste Depot Turnpike Close Grantham.