Review of Waveney Campus

Review of

Waveney Campus Programme

Waveney District Council

September 2010

Contents

Executive summary / 3
Key lessons learned / 4
Background / 6
The role of the partnersand elected members in the project / 8
How the vision and objectives were set and agreed / 10
Governance arrangements / 13
External Influences / 14
Procurement and Asset Management Processes / 16
The decision to cancel / 17
Benefits delivered and benefits to be reassigned / 20
Residual issues, risks and outstanding actions / 22

Executive Summary

This report is about a decision to cancel the Waveney Campus programme whichwas a multi-agency capital programme being funded by Waveney District Council (WDC), working in partnership with Suffolk County Council (SCC) and the Centre for Environment, Fisheries and Aquaculture (CEFAS). The programme scope was to develop new office and research premises housing all three organisations in the town of Lowestoft which is within WDC’s rural hinterland.
This report has been commissioned by WDC to consider lessons learned about partnership working that arise from their involvement in the programme.
The Programme was, from the start, ambitious, but one that was financially feasible and would provide a key stimulus for the area, retaining skilled employment and providing regeneration opportunities for Lowestoft.
Initially CEFAS took on the role of SRO for the project but it was always the intention that WDC, as the funding organisation, would take on this role, which it did prior to commencement of the exercise to procure the design and build contract in 2008.
Programme management processes were put in place and a detailed governance structure developed to facilitate delivery of the programme whilst meeting the needs of the three partner organisations.
Issues developed around three partner organisations, with differing cultures, working together. Coupled with other external factors, such as local government reorganisation and changes to funding structure for partners a number of delays occurred.
Risks were highlighted and managed both as part of the established programme management processes and following Gateway reviews. However a key risk throughout the programme was that of affordability for individual partners.Due to the developing financial recession for the UK and the looming significant fiscal pressures facing central and local government, the programme was brought to a halt in December 2009.
Whilst the overall programme management processes and governance structure were fit for purpose there were a number of areas of learning that could be used to inform future programmes. The key lessons are detailed on the following page with more detail shown in the body of the report.

Key lessons learned for stakeholders and future projects

(a)Careful thought needs to be given to the identification of the lead organisation, with regard given to a number of factors including experience and capacity, financial position, appetite for risk etc. In this case circumstances meant that whilst the highest financial risk was taken on by WDC, CEFAS retained the lead role. As soon as the decision was taken with regard to the eventual landlord/tenant relationship the landlord (WDC) should have taken on the lead role. If experienced resource was lacking from within the partnership this should have been bought in at an earlier stage.

(b)The earlier appointment of a dedicated programme director, working for the partnership as a whole, and funded through the pre-procurement agreement, who would have been able to monitor delivery of scheduled activities, ensure completion as required or amendments to programme plan and balance requirements and responsibilities of individual partners.

(c)The pre-procurement agreement reflected a mature approach of the partners and has meant that the relationship between the organisations remains intact even after the premature closure of the programme.

(d)In the most successful partnerships, robust options appraisals are undertaken at various stages of the programme, with early decisions having scope to more radically affect the ultimate outcome.

(e)The compatibility of the aims and objectives of the individual partners should be robustly assessed to analyse whether they complement each other or give rise to competing requirements.

(f)The partnership had defined clear joint aims and objectives but, because of CEFAS’s complex technical requirements, there was less formal interest from the councils on these which may have led to a diminished enthusiasm for the partnership.

(g)As well as developing a good governance structure it is vital that key stakeholders, decision makers and influencers are identified at the outset and placed appropriately within the governance structure, with clearly defined roles and responsibilities.

(h)Careful thought should be given to identification of a lead partner and the distribution of risk within the partnership. Plans should be developed to mitigate any inherent risks and alternative strategies developed should risks give rise to serious issues. For example alternative options could have been considered should one of the participants no longer feel able to fulfil its role.

(i)Although it is possible to work jointly without it, the key to successful partnerships is the notion of trust. However committed the partners are there will always be some level of pressure to the relationship from ‘external’ sources which affect an individual partner’s contribution to it. In this case the ‘external’ sources of threat came initially from local government reorganisation (LGR) then from both DEFRA and DWP.

(j)Key to delivery of a major transformational partnership programme is the requirement for an overall SRO/Programme Director responsible to the partnership as a whole rather than any combination of individual organisations within the partnership. This position should be filled as soon as possible following programme initiation.

(k)In any future programmes of this size and complexity WDC should separate the council’s programme lead and s151 officer role.

(l)The change from joint to individual legal advice needs to be clearly defined and understood by all and individual partners need to fulfil a strong client role with their advisors, to ensure that a pragmatic partnership ethos is followed.

(m)The partnership in general and WDC in particular now possesses a level of experience and expertise in both the pre-procurement agreement and the ‘competitive dialogue’ process. This process is particularly suited to large, high value, complex procurements and as such there may be opportunities for WDC to make their expertise available to others.

(n)Procurement exercises should, wherever possible, retain a degree of flexibility within processes adopted, in order that unforeseen issues do not make the procurement process invalid.

(o)Whilst the focus of programmes should be on ‘planning for success’ risks should be identified and alternative strategies developed for ‘what if’ scenarios.

(p)Affordability should be rigorously challenged at all stages of a major programme, with tolerances built in to assumptions to indicate level of risk.

(q)Benefits can be delivered at various stages of a programme prior to completion. Robust benefits identification and mapping can assist in proving the benefits case, particularly when many benefits are not purely financial.

(r)A sharp focus on benefits realisation is needed at all stages of a programme.

(s)Planning needs to commence immediately with regard to the local authorities response to the risk of CEFAS relocating elsewhere in five to seven years, in order that the councils can engage with CEFAS at an early stage to ensure all partners work together to reach a mutually beneficial solution.

(t)Programme plans should always include strategies for responding to risks, including closure of the programme and any residual risks that may result.

Background

The Waveney Campus was a multi-agency capital project being funded by Waveney District Council (WDC), Suffolk County Council (SCC) and the Centre for Environment, Fisheries and Aquaculture (CEFAS). The project scope was to develop new office and research premises housing all three organisations in the town of Lowestoft which is in north-east Suffolk.
All three organisations had identified that their buildings had reached a point where they were no longer fit for purpose and were incapable of supporting service transformation. The layout, age and location of the buildings were barriers to the introduction of new technologies and modern efficient working practices. In particular for WDC, a SOLACE peer challenge of the CPA self-assessment in January 2004 stated:

“Accommodation is of poor quality and is on too many sites. The main council offices are not centrally located and there is no proper reception facility. The telephone system is also poor. This means that services are not fully accessible and the public must receive a very poor image of the council. Current proposals to concentrate offices on two sites are simply palliative rather than a panacea. Similarly the Navigator access project based on Lowestoft Library in conjunction with Suffolk County Council, whilst well meaning is far too limited in scope. It is essential that the accommodation issue is properly dealt with prior to much needed investment and implementation of new IT and telephone systems. Much more radical plans need to be developed and, given the council’s financial position, it is likely that these will need to be developed in conjunction with public and private sector partners e.g. the county council, PCT, educational institutions and major local businesses.”

A further consideration for WDC, at least in the early stages of the programme, was a strong desire to retain CEFAS in the area as a provider of skilled employment and also an internationally recognised research centre with potential to contribute to the region’s ambitions regarding environmental technology. Prior to programme inception in 2005 CEFAS had been considering various options including relocation away from Lowestoft.
Finally, the partners had identified a brownfield site in the former docks area of Lowestoft which was part of the Area Action Plan created by the Urban Regeneration Company, 1st East.
A feasibility study and outline business case were completed in 2005. This outlined the justification for the programme being “varied and complementary requirements for accommodation in the town of Lowestoft”. It cited Sir Peter Gershon’s ‘Releasing Resources to the Frontline’ report (2004) “reduction in the government estate through sharing office space and increasing the amount of mobile services” and Sir Peter Lyons’ report‘Towards Better Management of Public Sector Assets’ (2004)“public services are moving from the traditional model in which particular services are associated with particular buildings and delivered between preset hours. Increasingly we are seeing public services joining up and being delivered in new and innovative ways – outside the confines of traditional structures and divisions, through new technologies and operating models and personalised to the needs of the user – the pupil, citizen or patient”. The business case goes on to discuss options for a joint site. We did not find any evidence that other options for satisfying the accommodation needs of WDC had been considered.
On completion of the business case all three partners committed to the programme. A Pre-Procurement Agreement was drawn up and a detailed governance structure and programme management resources established. Whilst various issues caused delays, the partners remained committed to the Campus and committed (part time) resources to it. The original date for occupation was 2008.
CEFAS, on behalf of the partnership, commissioned the first OGC Gateway review in March 2006 and the Gateway Two review under delegated authority carried out by Defra in February 2007. The project was fortunate to secure the same reviewers at both reviews which gave consistency and background.
However, the economic recession and pre-budget speech outlining future challenges to the UK economy, compounded by a number of other factors, including potential local government reorganisation and issues around DWP claims against WDC,led to a decision to cancel the programme in December 2009.
The purpose of this report is to review the process and partnership challenges to capture the ‘lessons’ for future partnership working. The findings are detailed under the following headings:

The role of the partners and elected members in the project;
How the vision and objectives were set and agreed;
Governance arrangements;
External Influences;
Procurement and asset management processes;
The decision to cancel;
Benefits delivered and benefits to be reassigned;
Residual issues, risks and outstanding actions.

The role of the partners and elected members in the project

We found that from the outset there was a clear commitment to partnership working from the senior levels of each of the partner organisations. And at WDC, throughout the programme, political buy-in and support from all parties was a strength.

In addition to the three partner organisations the East of England Development Agency (EEDA), who had approved a grant towards both the quay heading design and technical construction to the benefit of WDC and Cefas, and the Urban Regeneration Company, 1st East were supportive of the programme.

A key initial decision was that WDC would assemble and purchase the land using prudential borrowing and that the Campus programme would be self-financing – ie receipts from disposal of other sites would not be directly used to fund the programme. CEFAS, at that time, did not have access to capital funding and were content to enter into a long (99 year) lease arrangement with WDC provided their technical needs for the building were met, and SCC were also content to initially enter into a 30 year lease and latterly a long (99 year) lease and thus a tenant role. The change to the lease term was due to the proposed capital funding change. WDC therefore, with an annual budget of approximately £15m held the financial risk for a £60m programme, based on a financial model with a payback period of 60 years.

CEFAS,as the partner with the most complex accommodation needs, initially (2005 - 2008)took on the role of ‘lead’ organisation, with the recognition that, as major funder, WDC would take on the lead role at a later stage. In addition WDC felt that they lacked experience in delivering programmes of this size and complexity and were happy to allow CEFAS to continue in this role.

SCC, who had recent experience of moving to new premises, delivering change and successfully transforming their organisation, provided advice and strong support to the other partners.

Turner and Townsend were appointed in 2006 as programme managers/design team consultancy on a fixed price basis; although they felt that some of day-to-day programme management work they did was outside of their original remit. For example some actions (such as getting sign-off for procurement strategy and outline design before Gateway Review)were not completed in a timely manner, so Turner and Townsend took a more hands-on role to ensure that actions were completed.

A pre-procurement agreement was entered into in October 2006. This agreement set out the liabilities for costs should the programme not proceed to conclusion. In this case costs would be apportioned in line with ultimate building usage as follows:

CEFAS58%
WDC25%
SCC17%

WDC took over as lead partner in December 2008, prior to commencement of the procurement process.

WDC and SCC jointly appointed a programme director at end of 2008 but CEFAS opted to retain responsibility in-house for programme management. This arrangement appears to have increased the possibility of conflict within the partnership and hinder the realisation of full benefits possible from the appointment of a Programme Director for the programme as a whole.

Lessons Learned

(a)Careful thought needs to be given to the identification of the lead organisation, with regard given to a number of factors including experience and capacity, financial position, appetite for risk etc. In this case circumstances meant that whilstthe highest financial risk was taken on by WDC, CEFAS retained the lead role. As soon as the decision was taken with regard to the eventual landlord/tenant relationship the landlord (WDC) should have taken on the lead role. If experienced resource was lacking from within the partnership this should have been bought in at an earlier stage.