Agenda item

Purpose of the report: To provide details of the Council’s decision not to proceed with the acquisition of Midas House as the new County Hall.

Witnesses:

Michael Coughlin, Executive Director of Transformation, Partnerships and Prosperity

Key points raised during the discussion:

1. The Executive Director introduced the report. It focused on the decision to cancel the move of County Hall to Midas House in Woking, which was taken under the uncertainty of Covid. There were four key strands to the decision: the impact on staffing, digital capabilities, property implications, and communications and change management. The Moving Closer to Residents (MCTR) programme would continue to be progressed in autumn 2020.
2. A Member remarked that the decision to cancel the move to Midas House appeared to have been made very quickly. The Select Committee wished for more detail on this decision – firstly, the revised timetable for the move of County Hall. Would the County Hall still be based in Kingston after the May 2021 election? The Executive Director responded that the Council would continue to market the current County Hall building in Kingston in the uncertain property market, working with the Royal Borough of Kingston upon Thames. Surrey County Council was also reviewing its wider property portfolio in line with quantitative and qualitative research on how staff had been working during the pandemic. It was, however, impossible to put a strict timeframe on the programme at the moment.
3. A Member referred to the £183,000 figure of costs associated with the cancelled move to Midas House. This was detailed in the answer to a Member’s question at the full Council meeting on 19 May 2020, which was annexed to the report on the agenda for this Select Committee meeting. Was this figure still up to date and comprehensive, and what was the current budget allocation? The Executive Director said that £183,000 was the final cost and fees; no further costs had been incurred since the cancellation decision.
4. A Member asked what the primary reason for cancelling the decision was. Had the Council been unsure anyway and used Covid as an excuse? The Executive Director stated that Midas House had been a serious contender, and the Council would not have progressed as it did if it had not been serious. However, the pandemic hit as negotiations progressed beyond heads of terms into deeper legal considerations, and with the acceleration of the number of staff members working from home, it became clear that the Council was not going to need a building of the size or nature of Midas House. The decision was made quickly in order not to incur any more costs. There were no other, hidden reasons. The strategic intent remained to move staff out of the Kingston County Hall.
5. A Member expressed concern about how the cancellation would affect the Council’s credibility among councillors and, principally, the general public. He asserted that the communications regarding what happened had been poor and Surrey’s credibility had been damaged. There would be credibility issues with any future move of County Hall. The Executive Director accepted the Member’s comments on communications – when the decision was taken on 23 April 2020, the country was in lockdown because of Covid, so the Midas House communications may have been lost among other communications. The Council had communicated with staff, but it might not have conducted enough public communications. No one could be sure about the impact of Covid in the future, but the Council was attempting to plan for the future wherever possible.
6. A Member remarked that there had been issues with Midas House all along; for example, there was not a space for a council chamber, and there had been issues with the tenants moving out. Was due diligence conducted before the Council made the initial decision to move there, and what learning had been taken from the experience to ensure that there due diligence was conducted in future? The Executive Director said that the Council had considered 18 buildings across the county and taken a range of factors into account. The decision had been brought to Cabinet and this Select Committee, and there was a specific working group assigned to the programme. Midas House had not been the wrong building at the time; rather Covid and lockdown had brought about change on a large scale. The extent to which staff were able to work and conduct meetings from home changed the amount of office space that would be needed going forward.
7. A Member expressed concern about the impact on staff, some of whom had made lifestyle changes or financial decisions based on the anticipated move to Midas House, such as early redundancy or moving house. Had the impact on staff been looked into? The Executive Director declared that the Council was committed to taking staff into account, and an all-staff survey on agile working was being undertaken. The Council wished to enable staff to work from home or near home where appropriate, and have access to an office if necessary. The communications effort would be informed by this work. The Member acknowledged that this was a positive way to conduct the programme in future, but it did not take into account the way staff had been affected by the cancellation already.
8. A Member suggested that the cancellation could have a net financial benefit for the Council, because office space may have less value in future due to the decrease in demand since the pandemic.
9. A Member indicated that there had been issues with the energy efficiency of Midas House. Would energy efficiency be a factor in the selection of a new County Hall building? The Executive Director affirmed that as the Council had adopted the climate change strategy, energy efficiency would be key in any new building. Moreover, while there had been issues with the energy efficiency of Midas House, the Council had begun work on how it would improve this.
10. A Member asked whether Woking was the only location the Council was considering for a new County Hall location. The Executive Director confirmed that the intention remained for Woking to be the prime location. The Council had undertaken travel analysis for staff, in which it had found Woking and Guildford would involve similar travel times and ease of access for staff, in particular for staff living in and around Kingston upon Thames. While Woking remained a preference, there would be further review when the working from home data was analysed. A number of Members suggested that locations other than Woking, including Guildford and other areas of the county, should be considered. The new County Hall should be accessible not only to staff, but to residents too. Another Member said that MCTR entailed a move to a number of different buildings, not only the new County Hall, and challenged the effectiveness of the way the Council had conducted its travel analysis. Woking and Guildford may be less accessible from areas other than Kingston. She suggested that the Council should look at travel times between each office site and staff members’ homes. The Executive Director responded that he believed the analysis involved the home postcodes of staff working at County Hall. He acknowledged, however, that this did not include staff working at other Council offices.
11. A Member expressed concern that the Council had continued far into the process of preparing to move to Midas House, spending £183,000, without realising that there were tenants it could not move. The Executive Director said that the Council had known about the tenancy issue throughout the process, and that Woking Borough Council, the current owners of Midas House, had been transparent about it. Woking Borough Council had been confident that two out of the three tenants would have left by May 2020, and while the other tenant would remain there a little longer, Surrey County Council had been confident that they would also move out in due course. However, this had become much more difficult when the pandemic struck.
12. A Member reflected that the Council must have learnt from this experience and the risk involved in the move of County Hall, and requested to see a list of protocols that had been modified and updated to take into account due diligence.

Recommendations:

The Select Committee:

1. Recommends that a comprehensive update report about the new County Hall/Civic Hub be presented to the Moving Closer to Residents Task Group for its October meeting;
2. Supports the principle of the Moving Closer to Residents programme;
3. Recommends at present that the Council's new Civic Heart should be based in either Woking or Guildford to ensure a consistent message to staff and residents and reassure staff that have already made a decision on their future.

Actions/further information to be provided:

1. The Executive Director of Transformation, Partnerships and Prosperity to share a list of protocols for the move of County Hall.