A8
THE ROYAL BOROUGH OF KENSINGTON AND CHELSEA
CABINET MEETING – 19 JUNE 2014
REPORT BY THE DIRECTOR OF HOUSING
GRENFELL TOWER MAJOR WORKS AND HIDDEN HOMES PROJECT
This report updates Cabinet on the progress and the ongoing
programme for the major improvements works and Hidden
Homes project at Grenfell Tower. It also seeks agreement to
increase the capital budget for the scheme to £10.3 million
FOR DECISION
1.
INTRODUCTION
1.1 This report seeks to provide Cabinet with an update on the major
works and addition of seven Hidden Homes at Grenfell Tower on the
Lancaster West estate.
2.
BACKGROUND
2.1 As a result of the development of vacant basements at Elm Park
Gardens, (23 flats for sale and 13 affordable homes) sales receipts
are being generated which are predicted to reach £13 million.
2.2 After funding the costs of enabling works and some hidden homes
schemes, net receipts of approximately £8 million are expected to
arise on the scheme.
2.3 In December 2011 Kensington and Chelsea Tenant Management
Organisation (KCTMO) were asked to carry out an exercise to
identify where major investment was needed on the housing estate
which, would help to regenerate the area and reduce the burden on
the HRA.
2.4 Grenfell Tower was identified and a report approved by Cabinet on 2
May 2012. Cabinet agreed to allocate £6 million towards the
scheme. This is being met from the net capital receipts arising from
the Elm Park Gardens scheme. The proposed scope of works at this
time included replacement windows, external cladding, provision of
additional flats (hidden homes) and the upgrade of the nursery and
boxing club.
1
2.5 Subsequently KCTMO worked up a proposal to upgrade the
communal mechanical and electrical services, including the renewal
of the communal heating system. On July 2013, Cabinet agreed a
revised budget for the whole Grenfell Tower project of £9.7 million.
2.6 Part of the proposed investment included wider community benefits,
the re-provision of new premises for the Grenfell Under 3‟s Nursery
and the Dale Boxing Club which have a long history at Grenfell
Tower and are well supported by the local community. In addition,
redundant areas in the lower levels of the building offered the
opportunity for new „Hidden‟ Homes. Consultation with residents in
March 2012 produced overwhelming support for the proposals.
2.7 It was the original intention that the Kensington Academy and
Leisure Centre (KALC) and Grenfell Tower projects would work
closely together with the same design team, consultants and
contractor to deliver continuity in design and development process.
However, as negotiations progressed it became apparent that it
would not be possible to agree a contract price within the agreed
budget with Bouygues UK. KCTMO in consultation with the Council
therefore took the decision to appoint a new contractor through a
OJEU competitive tender process.
2.8 Resident consultation was undertaken regarding the revised
proposals which, carried on throughout the process as timescales
have changed and specifications have become more certain against
budget.
2.10 A revised planning application was submitted on 29 July 2013 and
approved on 10 January 2014 following the agreement of a
Unilateral Undertaking for the required £72,413 s106 sums.
Simultaneously, an OJEU tender process was carried out with 16
contractors submitting Pre-Qualification Questionnaires (PQQs) and
five being taken forward to the Invitation to Tender (ITT) stage.
Rydon submitted the most economically advantageous tender,
scoring highest on both price and quality.
2.11 The schedule of works will be:
Replacement of heating and hot water system for all
properties within the Tower.
Replacement of windows with double glazed units.
Thermal cladding of the building.
Re-provision of premises for the nursery.
Re-provision of premises for the boxing club.
Re-provision of office space for the Lancaster West Housing
Team.
Smoke/fire safety and ventilation works
2
Redecoration of the communal areas of the building.
Demolition of specific ramps and staircases to improve access
through the site.
Associated environmental works
Delivery of seven new hidden homes in the lower areas of the
building comprising of; 1 x 1 bedroom, 2 x 2 bedroom , 1 x 3
bedroom (wheelchair unit) and 3 x 4 bedroom flats.
2.12 A newsletter was sent to all residents of Grenfell Tower in April 2014
announcing Rydon as the project‟s contractor and arrangements are
being made for Rydon‟s Resident Liaison Officer and KCTMO
Resident Engagement Officers to have a site presence from the
beginning of June 2014.
Grenfell Under 3’s Nursery
2.13 Grenfell Nursery is a long established provision serving Lancaster
West and Henry Dickens Estates in North Kensington. They have
traditionally operated crèche, childcare, and early years‟ education
to local families, many on lower income. The service is part of the
Lancaster West Community Childcare Network (LWCCN). The
Network provides childcare at other sites, children‟s centre services,
and early years‟ education for 2, 3, and 4 year olds. They are a key
provider in North Kensington and are supporting the Council to meet
statutory requirements for early years education and children‟s
centre services. The nursery has occupied their current premises for
a number of years with no lease and making no rent payments. This
was an error and it is necessary for a lease and rent to be
implemented for both the new premises at Grenfell Tower and the
decant premises in accordance with the policy on managing HRA
commercial stock.
2.14 For the duration of the works period, the nursery will be occupying
the Resource Centre located within the estate at a rent of £15,500 –
per annum and the ability to offer 20 childcare places. A six month
rent free period has been offered to allow the nursery time to work
with Family and Children‟s Services (FCS) to develop a business
plan. With a viable business model in place it is hoped that Grenfell
Under 3‟s Nursery will be able to take up the lease at the new
premises. The new space will allow the provider to offer 40 childcare
places and should be ready for occupation by August 2015. A lease
has now been signed for the decant premises and a new lease would
need to be signed prior to the occupation of the new premises.
2.15 It has been agreed that FCS will work with Grenfell Under 3‟s
Nursery and by October 2014 it should be clear as to whether the
nursery will be able to take up the offer of the new premises. If the
current provider either cannot or chooses not to take up the offer,
3
FCS can begin the process of acquiring a new provider to make sure
there is no disruption to childcare places in the local area.
2.16 Housing and FCS will continue to work together to ensure that there
is sustained provision of childcare places in the local area.
Dale Boxing Club
2.17 The Dale Boxing Club currently occupies a space on the ground floor
of Grenfell Tower. They have a 25 year peppercorn lease agreed by
KDR on 8 March 1999. Therefore, a 25 year lease for the new
premises is being offered with a peppercorn rent until 2024 and, a
market rent to be charged for the remainder of the term. The new
lease will be signed prior to the occupation of the new premises. In
addition, KCTMO will only be providing the boxing club with a shell
as funding from Sports England will allow the club to fit out the area
to their own specification.
2.18 In order to assist the club during the works period, a part of the
disused car park at Lowerwood Court has been offered at a
peppercorn rent. FCS have undertaken to pay the costs to make the
space fit for occupation up to a maximum amount of £10,000 and
Rydon expect to have the work completed by the end of June 2014.
All of the required information for the legal paperwork has been
collated and the necessary paperwork should be ready for signature
by the end of June 2014. The boxing club will then be able to move
during the early part of July 2014 and remain at Lowerwood Court
until the Grenfell Tower works are completed.
2.19 Dale Boxing Club is an important part of the local community and
FCS hope to work with them going forward to provide further
opportunities for those in the area. Links have now been made with
the FCS team and they intend to work with Dale Boxing Club over
the coming month to develop an offer for the local community.
Leaseholders
2.20 There are 12 leaseholders in the 120 flats at Grenfell Tower. In
November 2012, KCTMO wrote a letter to all leaseholders stating
that no recharges would levied for the proposed work. This decision
had been taken by the Royal Borough in August 2012 following
consultation with legal services. It was concluded that the majority
of the work would be classed as „improvements‟ rather than repairs
and therefore outside the scope of recharge according to the terms
of the lease. There was the potential to recharge for a small number
of items such as redecorating the communal areas, but the Council
decided against this.
4
3.
PROGRAMME
3.1 On 27th March 2014, KCTMO Board agreed to the selection of Rydon
Property Services Ltd as preferred contractor for the refurbishment
of Grenfell Tower.
There are a number of items in the tender, relating to the scope of
works and the planning conditions that need to be finalised before a
contract sum can be finalised. A pre-contract agreement in the sum
of £350,000 has been put in place with Rydon to resolve a number
of matters, which include:
The scope of environmental works: the tender included a wider
scope of environmental works than is likely to be required. This
was done to ensure that there was a clear cost base that could be
applied when the exact scope of works is defined in negotiation
with Bouygues, the contractor for the KALC project. Discussions
are underway between all parties to agree the boundary between
the two projects and to agree how to manage the interface.
When this is resolved, there should be cost savings in the Rydon
tender.
There are planning conditions to be discharged in relation to the
detailed design and materials of a number of items, including the
new windows and the cladding material and fixing method.
Subject to agreement with planning, these could result in
increased cost, we would therefore like to be prudent and plan
for this possibility
A requirement of the tender is for Rydon to secure “ECO” grant
funding from energy suppliers to support the project, it is
uncertain at the present time how much they can actually
achieve. We would therefore recommend in the budget that we
plan not to receive any ECO grant funding and if we actually
manage to receive some funding, then this can be used to reduce
the net expenditure on the scheme.
3.2 While the agreed tender means that the works can be done within
the agreed budget of £9.7m, that leaves absolutely no contingency.
On any complicated refurbishment project like this, with works being
done around tenants remaining in situ, it would be prudent to
include a contingency of at least 5%; however, with the additional
risks to budget outlined in para 3.1, it would be prudent to include a
contingency of at least 6% in this case. It is therefore recommended
that the budget for this scheme is increased to £10.3 million.
Option 1:
To increase the budget to £10.3m to include a sum for contingency
of 6%.
5
Option 2:
Is not to increase the budget to £10.3m but for it to remain as
agreed at £9.7m, this would mean that there would be no
contingency, which would not be recommended, and therefore a
reduction is made in the specification of the project to accommodate
this budget risk, e.g. the seven hidden homes are not provided as
part of the scheme. However, if the scope of works is reduced
significantly, it is likely that the scheme would need to be re-
tendered.
3.3 A further review of the scheme design is currently being considered
relating to the office provision within Grenfell Tower. The existing
housing office in the block is being relocated to the former EMB
office. The local community need for community space is also being
reviewed and the existing Estate Services office may be upgraded to
provide a space for use by local community groups. An option is
being considered to provide a further two 2-bed flats instead of the
proposed office in the tower. Design options have been produced
and discussions are underway with planners. This change could be
accommodated within the budget detailed above. Members are
asked to note this change, subject to planning agreement.
3.4 Both Rydon and KCTMO are currently working to confirm the
programme of work which will endeavour to cause minimal
disruption to the KALC programme. Early indications are that work
to demolish the ramp at the west side of the site near the old
nursery premises would commence in late June 2014 with the
internal work to the boiler starting in early July 2014. The
scaffolding and mast climbers for the cladding and windows are
likely to be installed in late July 2014.
3.5 Rydon will have a Resident Liaison presence for several weeks prior
to the start of the demolition programme in late June 2014. They
will try and make contact with all residents and both KCTMO and
Rydon Resident Liaison Teams intend to make contact with the
Lancaster West Tenant‟s Association to try and promote
involvement. Rydon have undertaken to work with RBKC to provide
construction apprenticeship places. A meeting with the Council‟s
Housing and Worklessness Coordinator has been arranged for early
June 2014.
3.6 Unfortunately, much of the internal work is likely to be loud and
disruptive for the residents. Furthermore, the installation of the
heating system and windows will require access to the individual
flats for approximately five days. The Lancaster West Housing Team
are aware of this and Rydon Resident Liaison Officers will do all they
can to ease the process. In light of this, a respite flat is being
arranged, as well as a daytime respite area, and all residents will be
informed and be invited to use the space.
6
.
4.
CONSULTATION
4.1 Consultation for this scheme has been extensive involving open
meetings, newsletters, drop in sessions and door knocking.
Residents have been consulted extensively during the planning
applications and subsequent procurement processes and were given
a number of opportunities to comment on the proposed work and
materials.
4.2 In addition, residents were given the opportunity to be involved with
the contractor procurement process. Two residents were involved
with the Prequalification Questionnaire review, and Fay Edwards,
Chair of Lancaster West Tenants Association agreed to sit in on the
interviews of the short listed contractors.
4.3 Regular newsletters are now being produced and Rydon intend to
set up a series of drop in sessions and coffee mornings once they
are on site. Housing Management have been asked to identify any
potentially vulnerable households who may require additional
support and KCTMO will make the necessary arrangements.
4.4 In the event that the additional two „Hidden‟ Homes units are viable
(which would take the total number of new homes to nine), further
consultation will take place with all residents and any other effected
parties.
5.
LEGAL IMPLICATIONS
The Director of Law has been consulted and comments as follows:-
5.1
The General Consent for the Disposal of Land held for the purposes of Part II
of the Housing Act 1985 - 2013 authorises a local authority to dispose of land
for a consideration equal to its market value.
5.2
Under section 123 Local Government Act 1972 the Council has an obligation,
when disposing of land, to do so for the best consideration reasonably
attainable.
5.3
As the Dale Boxing Club currently have a lease at a peppercorn rent
until 21st June 2024, it is only after this date that the council will be
obliged to act in accordance with the statutory obligation to obtain
the best consideration. The new lease to Dale Boxing Club therefore
includes a provision for an open market rent review on the 22nd June
2024.
6.
FINANCIAL AND RESOURCES IMPLICATIONS
6.1 KCTMO has confirmed that it has the staffing resources within their
establishment to carry out this work.
7
6.2 It is recommended that the capital budget for this project is
increased from £9.7 million to £10.3 million. This increase in
provision can be met from a draw down from the HRA working
balance.
7.
EQUALITY IMPLICATIONS
7.1 Advice has been taken from the Council‟s Equality and Diversity
Team as regards any possible equality implications. They have
advised that there do not appear to be any issues.
8.
CONCLUSIONS
8.1 This report has sought to update Members on a significant capital
programme and Hidden Homes project being managed by KCTMO
and over seen by Council officers.
8.2 The Grenfell Tower project has been subject to several delays but
Rydon have now been confirmed as contractor with a start on site
date set for 2 June 2014.
8.3 Agreement is sought from Cabinet to increase the capital provision
for the scheme to £10.3 million, enabling a contingency of
approximately 6% to be established. Funding will be found from
within the HRA.
8.4 The Grenfell Tower project is mindful of the KALC scheme and the
need for both the academy and leisure centre to be delivered on
time. The boundary issues are being explored and satisfactory
solution will be reached following the scheduled meetings between
Rydon, BYUK and RBKC. Any risk will be mitigated as far as possible
and the completion of the Grenfell Tower work will greatly enhance
the local area and compliment the KALC project.
9.
RECOMMENDATION
9.1 Cabinet is recommended to increase the capital budget for this
scheme to £10.3 million.
Laura Johnson
Director of Housing
Contact officer: Miss Kitty Mortimer
Tel: 020 7361 2034
E-mail:
xxxxx.xxxxxxxx@xxxx.xxx.xx
8
