The Interim Director Place
introduced the report and stated that it had been born out of a
Full Council motion in July 2019, which had proposed the
cancellation of the Civic Offices project, and a request from the
Corporate Overview and Scrutiny Committee for additional
information. He stated that the report set out the current status
of the project and the rationale behind it, as well as why the
project was the best value option, both financially and for the
wider regeneration benefits. The Interim Director Place felt that
the Civic Offices project would encourage other investment in Grays
and would improve the customer experience. He drew the
Committee’s attention to 2.1 and 2.2 in the report that
detailed how the project would meet the wider regeneration
ambitions and improvements for Grays. He commented that
£200million was being invested into Grays regeneration, which
included the proposed investment from New Rivers in the town
centre. He also highlighted point 2.3 that summarised development
in Table A, and the financial benefits of the project compared to
refurbishment of CO1. He then highlighted 2.9 in the report that
stated a Preconstruction Services Agreement contract had been
signed in April 2019, and the Planning Committee had deferred the
item until its September meeting. He added that land availability
negotiations had taken place, so Thurrock Council had now acquired
the freehold for properties in New Road and the High Street. He
stated that early investigations had found that the CO1 site could
yield 80 residential units, but with investment from New Rivers,
this figure could be more ambitious. He also highlighted 2.13 and
the proposals for Thameside, which had been de-coupled from the
Civic Offices project, and stated that a separate report on this
would come before the Committee at a later date. He summarised and
added that recommendation 1 would have to be changed as Cabinet had
moved from 4 September to 11 September.
The Chair began the debate and felt that this topic was of much interest to people across the borough. He asked what the £9.78million cost covered, and how this figure had been predicted. The Senior Project Manager replied that the figure of £9.78million included all build costs and professional costs for the development of the CO2 site. He stated that the CO1 site would be self-funded and would give a separate return. The Chair then asked how the figure of £2.8million for the return on CO1 was predicted. The Director Finance and IT replied that the figure of £2.8million was based on a Thurrock Regeneration Limited approach, which was a proven model as it had been used for the St Chads site. He stated that £2.8million included all of the ground preparation works, construction, rented income and finally capital receipts. The Chair questioned the assumption he felt was made in the report that vacating CO1 would reduce costs, due to plant being at end-of-life. He asked what impact this would have on day-to-day running costs and savings. The Interim Director Place replied that using an old building, compared to running a BREEAM standard building would cost 30% more. The Director Finance and IT replied that any revenue savings that would be made from the project had not been banked. He added that any savings made from the project would help targets set in the Medium Term Financial Strategy (MTFS) of £900,000 saved this year, and £1million saved in coming years. He felt that the financial benefits were not the main driving force of the project though. He added that project was close to being cost-neutral in best financial estimates, but the project had been designed for its regeneration and housing benefits.
The Chair questioned how confident officers were that spending figures would not increase, as point 2.9 was not a final costing. He felt that the return on CO1 could decrease, whilst building costs could increase. He asked what contingency plans were in place, should this situation arise. The Interim Director Place responded that both return and spending could increase or decrease and point 2.3 to 2.8 in the report highlighted this. He felt that there was a strong housing market in Thurrock, and particularly Grays, which would ensure residential units in CO1 could yield significant returns. The Chair felt that the council should not expose itself to significant risk and asked how, if building costs increased, this would be managed. The Director Finance and IT replied that it would be the same as other capital projects, and that there would be a dedicated programme manager, as well as a dedicated team who could mitigate risk and control costings. He felt that the same questions could be asked about the refurbishment of CO1, as this would face the same risks. He added that managing capital projects was standard practice, and the dedicated team could put in place contingencies to manage risk. He summarised and clarified that if costs could not be contained, then savings would be sought elsewhere in the CO2 project.
Councillor Duffin asked if there had been any more decisions regarding the use of the new building as space in the evening, and what services would be offered. The Senior Project Manager replied that talks were currently underway with South Essex College regarding use of the space, and the café regarding extending their opening hours for the proposed new building. He felt that it was a circular scenario, as the more people who used the space; the more people would go there. He added that the proposed new Civic Offices would be community focussed, and not just for transactional council needs. Councillor Duffin asked how much work had been done on this, and felt that the council wanted residents to use more online services, rather than using the council offices. The Senior Project Manager replied that for transactional requests, Thurrock were encouraging a shift to online, but the most vulnerable residents would still use the Civic Offices.
The Chair agreed with Cllr Duffin and felt that the benefits were tailing the project, rather than leading. He felt that the benefits listed on page 34 of the report could also be achieved using the current Civic Offices space, for example making offices Wi-Fi enabled or renting out spaces for residents. He asked officers what the project would achieve that could not already be done with the current buildings. The Interim Director Place replied that this was a cost-neutral proposal, and provision of the same services in the current space would not be of a high standard. He felt that the project added to the further regeneration of Grays town centre, for example the new underpass and potential investment of £100million from New Rivers, and provided wider benefits. The Chair asked to see an itemized list of plant that was at the end of its economic life, and how much it would cost to replace the plant. The Senior Project Manager replied that this would be sent to Members after the meeting. He added that the building would need to be gutted to allow replacement of all the plant and equipment for continued use as an office, however, taken as a whole, CO1 would be surplus to requirements and so excess space would need to be let out commercially. He commented that internal reconfiguration would be required to allow private tenants to have their own areas and entrances, and if used for housing, the existing building would need to be demolished, so no separate gutting would be required. The Director Finance and IT added that the money being used for this project could not be used elsewhere, and the council had never turned down and other project to allow this one to be completed.
Councillor Jefferies commented that he felt Grays needed the regeneration benefits that this project would provide, such as housing and investment. He added that the project would make Grays the capital of Thurrock, and would add to the recent central government funding given to Grays town centre. He felt it would connect Grays, as currently the railway line separated the two sides.
The Chair summarised and stated that the Committee had considered numerous new arguments during the course of debate and requested an additional recommendation reading as follows “The Committee call on Cabinet to cancel the Civic Offices Project, and convene an all-party Working Group to review ongoing options for the Civic Offices and capital spend”. Councillor Duffin commented that he felt creating a Working Group would not achieve a lot, as Cabinet could disregard recommendations made. Councillor Jefferies commented that he could not support an additional recommendation of that nature as he felt the project would increase investment and housing by making use of a redundant building.
The Chair called a vote in relation to recommendation 1.2:
In favour: Councillor Gerrish, Councillor Duffin
Against: Councillor Jefferies
The vote was carried in favour of introducing recommendation 1.2.
1. The Committee noted the contents of this report and made any comments to be considered by Cabinet at its meeting on 11 September 2019, these comments to be verbally provided.
2. The Committee called on Cabinet to cancel the Civic Offices Project subject to additional work to adequately demonstrate the benefits that would be delivered by the project.