Agenda item

Purpose of the report: This paper provides an update for the panel on the projects being undertaken to support the delivery of the Surrey Estates Strategy.

Witnesses:

Kelvin Menon, Chief Finance Officer (OPCC)

Lisa Townsend, Police and Crime Commissioner for Surrey (PCC)

Key points raised during the discussion:

1. The Chief Finance Officer outlined that the report was an update on the Estates strategy, mainly around the Mount Browne redevelopment, along with other elements.

2. A member asked if the same course would still be chosen if the 2021 decision to retain and redevelop Mount Browne was taken again today. The PCC felt that the same decision would be taken.

3. The Vice-Chairman referred to paragraph 3 of the report which stated that Public Works Loan Board (PWLB) loans to redevelop the Mount Browne would be paid back from money saved through reduced running costs. The Vice-Chairman asked if the PCC could provide an assurance that this would occur, and that monies would not be redeployed to other services. The Vice-Chairman also asked how greatly those repayments would add to the pressures across the Medium-Term Financial Plan (MTFP). The Chief Finance Officer explained that the business model for Mount Browne relied on the savings from the running costs financing the loan, there is an obligation under the prudential indicators to cover the interest repayments, and that the savings would be used to repay the loan. It should not affect the MTFP in terms of pressures on the Force’s operational budget given that savings generated from Mount Browne’s redevelopment would be used to repay the loans.

4. A member asked what controls and contract management practices would be in place to ensure risks of overspends and overruns were protected against in the construction project. The Chief Finance Officer explained that there were a lot of negotiations with the developer on the development contract to ensure the Force was protected as much as possible, and that the developer was required to submit a bid before entering each stage of the contract through an open book process, which the Force could then challenge. They assured the panel that cost consultants and quantity surveyors were appointed to assess the spend, and that, if it was found that the cost for a particular stage was more than anticipated, the specification would be reviewed to bring it back into budget. Contingencies for inflation and interest rate rises were also in place, they said.

5. A member asked if there would be a risk register for the Mount Browne project. The PCC explained that a risk register was already maintained by the Estates Team and was discussed at every Estates Board meeting.

6. The member asked how much money was likely to be raised by selling Reigate Police Station, and if it was not attained, what impact this would have on the Eastern Division Accommodation Strategy, and how this eventuality had been planned for. The Chief Finance Officer explained that final bids on Reigate Police Station were awaited. If bids did not meet expectations, then there would have to be additional borrowing or a slightly less ambitious Eastern Division HQ.

7. The member asked what amount Reigate Station was likely to sell for, and how it would be ensured that the Force did not retain any liability for things such as potential injury or property damage when selling Reigate Police Station, which contains (RAAC). The Chief Finance Officer explained that Reigate Police Station was being sold as seen, with the RAAC still in place. Once sold, he believed the liabilities should fall away – it was thought that most parties planning to buy it would demolish the building. He suggested relaying the member’s question to the lawyers to ensure certainty around this.

8. A member asked what revenue savings were expected to be delivered by the plans for the Eastern Division. The Chief Finance Officer could not provide the exact figures and stated that he would need to ask the Estates team, but stated that there would be a saving in rent of around £300,000 that was currently being paid for Wray Park, as well as savings in the operation of the building, as the new divisional HQ would be built to modern environmental standards. Operationally, the new building would be bespoke and hence meet the division’s needs. The Eastern HQ’s location in Leatherhead was also good as it would provide good access to the road network.

9. The member asked if the previous goal to achieve carbon neutrality by 2030 was still in place. The Chief Finance Office described this as an aspiration, noting that the redevelopment of Mount Browne and the Eastern Division HQ was being done to BREEAM (Building Research Establishment Environmental Assessment Method) standard, which would substantially reduce the premises’ carbon footprint. The Force’s main challenge related to reducing transport emissions as there were not enough suitable electric or hydrogen vehicles to use and they also require infrastructure investments. 

10. A member asked when more information would be available regarding the Force’s Housing Strategy for newer officers. The Chief Finance Officer explained that there was housing stock in a mixed state of repair, which was now being upgraded, using the proceeds from the sale of empty houses. As part of Housing Strategy, the Force wanted to provide social housing, particularly for trainee officers. However, the PCC had recently been made aware of the Renters’ Rights Bill, which had several implications for Forces seeking to provide housing. Currently, the Force could grant assured shorthold tenancies or could tie the tenancy to a person’s employment. Under the new Renters’ Rights Bill, although the Force could tie leases to a person’s employment, a complication arose from the fact that the PCC owned the buildings but it was the Chief Constable that employed them. They explained that this created a risk of building social housing for officers without the ability to get them to vacate once they left employment with the force. The PCC had written to the Minister about this issue and requested an amendment to the Renters’ Rights Bill to allow the letting of occupational premises to a police officer conditional on their employment. If no amendment is forthcoming then the Housing Strategy may not be able to proceed.

Actions/Requests for further information:

• Chief Executive to clarify whether the Estates team's risk register can be provided to the Panel.
• Chief Finance Officer to follow up with lawyers on who will retain legal liability for any RAAC-related issues arising after the sale of Reigate Police Station.

Chief Finance Officers to retrieve figures from the Estates team on what revenue savings are expected from the plans for the Eastern Division.