Decision details

This decision record sets out the key information for publication on the decision by the Executive Director for Customer and Communities and the Deputy Chief Executive & Executive Director of Resources, in consultation with the Cabinet

Member for Communities & Community Safety and the Cabinet Member for Finance & Resources, to approve an additional 10% contingency payment due to inflation hardship for a Your Fund Surrey (YFS) project located in Woking. The agreed recommendations are set out below on the face of this decision record.

It was AGREED:

1. to fund up to an additional 10% of the original grant award (£58,640) for increased costs relating to current inflation levels towards Your Fund Surrey project CF149 Ripley Village Hall.

a.  The original grant award for £586,396 was granted 06/10/21. An additional 10% inflation hardship claim of up to £58,640 is allowable, and fully in line with, the Cabinet decision from November 2022.^[1]

b.  The project has not yet started. The funding agreement is still being negotiated following an update to the tendered costs following Cabinet approval and a review of how to address the subsequent funding gap.

c.   Costs have increased due to increased material and labour costs across the build, including construction, electrics and plumbing. Costs have been evidenced and assessed as reasonable.

d.  The contingency funding amount included within the original grant award (£102,790) has been amended to 5% of the new build cost (£67,511) and is also being claimed towards the increased costs, however the additional 10% is also required to meet inflation related increased costs.

e.  There remains a funding gap of £158,221. It is proposed that the applicant review further other funding options, fundraising and/or a further review of scope to remove or defer items. Whilst not ideal this is a necessary compromise in the current challenging inflationary environment.

f.    It is proposed to complete the funding agreement including this 10% funding (total YFS funding £645,036).

The project cost changes and reasons are detailed below:

*5% of build cost

The increase in building costs is the result of Brexit, Covid and supply issues following the world unrest. The increase in build cost is 25%, in line with the current market.

Four contractors submitted bids in January 2023 as previous tenders had expired. The preferred contractor is the least expensive at £1,350,203.

Some scope has already been deferred to a later date, including:

·         removal of the soft landscaping;

·         consolidation of two function rooms.

·         removal of A/V equipment

Officers consider that the applicant has been proactive in managing some of the cost increases.They have reviewed the costs and removed some scope. They feel the responsible way forward is a fixed price contract and have been meticulous with the tender document to detail every element to reduce surprises during the build.

The applicant believes removing any more scope would mean the Halls would not be able to be safely used. The tender only allows for basic decorations, sanitary fixtures and other fittings.

Officers consider that the remaining funding gap could be addressed through a combination of the following:

1. seeking other funding
2. fundraising
3. further reductions on scope

This decision is to enable expenditure from Your Fund Surrey to be awarded to an already funded project to ensure delivery of the anticipated community benefits and has been the subject of a rigorous assessment process by officers.

Officers consider the additional funding request to satisfy the requirements to award an additional contingency payment due to inflation hardship.

If additional funding cannot be provided, significant scope would have to be removed from the project, which would significantly affect the proposed community benefits. This option was rejected.

None.