Contract Monitoring Overview and Scrutiny. Kier Strategic Partnership Agreement Performance Cabinet Member for Resources and Performance

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1 Meeting Date 9 October 2013 Subject Report of Summary of Report Contract Monitoring Overview and Scrutiny Committee Kier Strategic Partnership Agreement Performance Cabinet Member for Resources and Performance Sets out the performance of the Strategic Partnership Agreement with Kier London for the delivery of construction schemes under the Primary School Capital Investment Programme (PSCIP) Officer Contributors Status (public or exempt) Wards Affected Key Decision Reason for urgency / exemption from call-in Function of Enclosures Contact for Further Information: James Wills-Fleming, Head of Corporate Programmes Public All No N/A Contract Monitoring Overview and Scrutiny Committee Appendix A Key Performance Indicators James Wills-Fleming, Head of Corporate Programmes, , james.wills-fleming@barnet.gov.uk

2 1. RECOMMENDATION 1.1 The Committee is asked to consider the Key Performance Indicators (KPI) performance of the Council s Strategic Partnership with Kier London. 2. RELEVANT PREVIOUS DECISIONS 2.1 Cabinet, 5 December 2005, Decision 6, Building a future for Barnet s Children: the Primary School Capital Investment Strategy 2.2 Cabinet, 3 April 2008, Decision 14, Selection of Strategic Partner for the Primary Schools Capital Investment Programme (Kier London Limited). 2.3 Cabinet Resources Committee, 5 March 2009, Decision 11, Approving re-build of Colindale Primary School and adding it to the Kier SPA 2.4 On 12 April 2010, the Leader of the Council and Cabinet Member for Resources approved under delegated powers (DPR 1057) the acceptance of a tender contract sum from Kier London Limited for works at Childs Hill Primary School. 2.5 On 25 June 2010, the Cabinet Member for Education, Children and Families and Cabinet Member for Resources approved under delegated powers (DPR 1102) the acceptance of the tender contract sum for the works at Edgware, North Finchley and Mill Hill Libraries to create Phase 3 Children s Centres 2.6 On 31 January 2011, the Cabinet Member for Education, Children and powers (DPR 1246) the acceptance of tender contract sum for works at Garden Suburb Infant and Junior Schools 2.7 On 31 January 2011, the Cabinet Member for Education, Children and powers (DPR 1247) the acceptance the tender contract sum from Kier London Ltd for construction works at Broadfields Primary School to extend the existing building to accommodate an extra form of entry. 2.8 Cabinet Resources Committee, 2 March 2011 (Decision item 5) Delivery of a one-form entry Primary Free School to be known as Etz Chaim and authority to use Barnet s existing Strategic Partner Kier London Limited to carry out the construction on behalf of Partnerships for Schools, the Department for Education s delivery agency on school building programmes. 2.9 Cabinet Resources Committee, 27 September 2011 (Decision item 7) - The commissioning of the permanent expansion (of The Orion Primary School) through the Strategic Partnering Agreement with Kier London, subject to the demonstration of value for money Cabinet, 3 November That Cabinet agree to the commissioning of a new primary school at Mill Hill East through the Strategic Partnering Agreement with Kier London, subject to the demonstration of value for money On 12 January 2012, the Cabinet Member for Education, Children and powers (DPR 1534) the acceptance of a tender contract sum from Kier London Limited for works to deliver the rebuild of The Orion Primary School.

3 3. CORPORATE PRIORITIES AND POLICY CONSIDERATIONS 3.1 The Overview and Scrutiny Committees must ensure that the work of Scrutiny is reflective of the Council s priorities. 3.2 The three priority outcomes set out in the 2013/16 Corporate Plan are: Promote responsible growth, development and success across the Borough Support families and individuals that need it promoting independence, learning and wellbeing Improve the satisfaction of residents and businesses with the London Borough of Barnet as a place to live, work and study 3.3 Barnet schools are among the best in the country with a high proportion rated good or outstanding by Ofsted and are highly valued by residents. The provision of fit-for-purpose school accommodation along with additional capacity across the primary school estate through the Kier Strategic Partnership helps to contribute to each of the three priority outcomes. 3.4 Barnet Council has a statutory duty under section 14 of the Education Act 1996 to ensure that sufficient schools for providing primary and secondary education are available in the area. The Strategic Partnership with Kier helps to enable the Council to fulfil this duty. 4. RISK MANAGEMENT ISSUES 4.1 Risks associated with the delivery of schemes under the Kier Strategic Partnership are managed by the Corporate Programmes team, overseen by the Education Capital Programme Board, in accordance with the Corporate Risk Management Strategy 5. EQUALITIES AND DIVERSITY ISSUES 5.1 The selection of a strategic partner to design and build the primary schools in Barnet was undertaken in line with the council's equality standards and the standards set out in the strategic procurement guidance. 6. USE OF RESOURCES IMPLICATIONS (Finance, Procurement, Performance & Value for Money, Staffing, IT, Property, Sustainability) 6.1 As well as ensuring that value for money was achieved through a robust procurement process the Council has commissioned two independent value for money reviews during the life of the contract 6.2 These value for money reviews were carried out by the Council s technical partner, Gardiner & Theobald, in August 2009 and December 2010 and confirmed that the Strategic Partnership with Kier continues to meet the quality and value for money criteria against which the original competitive dialogue was evaluated. 6.3 The total projected spend on the contract is 83,981,452, delivering a total of 12 schemes. These schemes are a mix of full new build, partial rebuild/extension and refurbishment.

4 6.4 Table 1 below summarises the scheme name, type and contract value. The total project spend figure is subject to possible change as a number of schemes are either still in delivery or subject to agreement of Final Account. Table 1 Kier SPA Contract Schemes and values Scheme Name Type Contract Value Whitings Hill Primary School New Build - 2FE 9,885, Edgware Junior School Extension/Refurbishment 2,559, Broadfields Primary School New Build - 2FE 9,784, Northway Special School and Fairway Primary School & Children s Centre New Build - Co-located 1FE Special School and 2FE Primary School & Children s Centre 16,561, Colindale Primary School New Build 3FE 719, Childs Hill Primary School Part-new Build, part-refurbishment 12,171, Phase 3 Children s Centres Extension and refurbishment of 2,726, three libraries Garden Suburb Infant and Partial New build Kitchen, dining 2,648, Junior Schools and teaching block Broadfields Primary School Extension 1FE 1,099, Etz Chaim Primary School Extension and refurbishment of 2,775, former garden centre The Orion Primary School New Build 4FE 12,306, Mill Hill East Primary School New Build 3FE 10,745, Throughout the life of the contract performance has been consistently rated as good against each of the nine KPIs contained within the contract. 6.6 Overall performance of the contract has never dropped below good and on only five occasions across the 20 quarters monitored to date (through to June 2013) has any single KPI been rated as just satisfactory. No KPI has ever scored below satisfactory. 6.7 Appendix A details each of the nine KPIs and performance against these since the start of the contract through to June 2013 (the latest available reporting period at the time this report was written). 6.7 Each major scheme delivered under the Kier Strategic Partnership has been built to meet the BREEAM Very Good standard, which is used to set bestpractice in sustainable building design, construction and operation. 7. LEGAL ISSUES 7.1 Each scheme delivered through the Kier Strategic Partnership is contractualised under individual, industry standard, JCT Construction contracts which are drafted and agreed by the Council s external legal partner for PSCIP, Trowers & Hamlins. 8. CONSTITUTIONAL POWERS (Relevant section from the Constitution, Key/Non-Key Decision)

5 8.1 The rules and terms of reference of all scrutiny committees are contained within Part 2, Article 6 of the Constitution; and in the Overview and Scrutiny Procedure Rules (Part 4 of the Constitution). The Contract Monitoring Overview and Scrutiny Committee is responsible for scrutinising reports from the Commissioning Group, Delivery Units and Lead Commissioners detailing the performance against targets that are included within the Corporate Plan and otherwise relating to the services provided by the Customer & Support Group, Development & Regulatory Services, The Barnet Group Ltd, HB Public Law and NSL (external Delivery Units) NSL and other major contracts, and to be able to challenge external providers. 9. BACKGROUND INFORMATION 9.1 In April 2008, the Council concluded a competitive dialogue procurement process to appoint a Kier London (Kier) as the Council s Strategic Partner to redesign and rebuild a number of primary schools in the borough under its Primary School Capital Investment Programme (PSCIP) 9.2 The maximum contract value set during the procurement process was 84,000, The Kier Strategic Partnership and each of the schemes delivered under it are managed by the Corporate Programmes team, now part of the Customer Support Group (CSG - formally known as the New Support and Customer Services Organisation). 9.4 Schemes delivered under the Strategic Partnership with Kier report through to the Education Capital Programme Board and then to the Assets & Capital Board. 9.5 The final two schemes to be delivered by Kier under the Strategic Partnership are currently on-site and under construction and due for completion in The Strategic Partnering Agreement (SPA) with Kier is performance managed through nine Key Performance Indicators (KPIs) grouped under the following four headings: Safety Contractor Performance School Liaison and Relationships Programme 9.7 All KPIs with the exception of those under Safety are monitored on an individual school-by-school basis and then aggregated up to reach an overall rating 9.8 The KPIs are monitored on a quarterly basis and regular contract review meetings are held between the Council and Kier to ensure that performance is proactively managed. 10. LIST OF BACKGROUND PAPERS 10.1 None Cleared by Finance (Officer s initials) Cleared by Legal (Officer s initials) JH SD