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The decisions as the council's minutes record them. A plain-language summary follows once it has been written.
RESOLVED (a) That the new capital project cost of £13,985,818 for Ysgol Bro Penfro, an increase of £4,537,815 to be met by the Authority, be approved; (b) That Welsh Government be requested to provide the projected underspend of £1,250,000 from the second tranche of the Welsh medium Capital Grant, for the purpose of reducing the Council’s capital contribution towards Ysgol Bro Penfro, as identified in (a).
There were no declarations of interest made.
Decision as recorded
RESOLVED (a) That the new capital project cost of £13,985,818 for Ysgol Bro Penfro, an increase of £4,537,815 to be met by the Authority, be approved; (b) That Welsh Government be requested to provide the projected underspend of £1,250,000 from the second tranche of the Welsh medium Capital Grant, for the purpose of reducing the Council’s capital contribution towards Ysgol Bro Penfro, as identified in (a).
Cabinet considered a report by the Director of Education and Director of Resources which outlined an amendment to the existing project relating to Ysgol Bro Penfro, the Welsh medium School in Pembroke. Councillor Guy Woodham, the Cabinet Member with responsibility for Education and Welsh Language, introduced the report and stated that the original capital funding for this project had been obtained as 100% capital grant from Welsh Government and highlighted that the total allocation was £6,650,780. He highlighted that Council had previously approved the statutory process for the establishment of Ysgol Bro Penfro on 8 October 2020. Councillor Woodham then outlined the following key points: • Following the conclusion of the feasibility study, which had been carried out in 2019 to determine the most appropriate location for the new school, a site to the south of Henry Tudor School (Bush Farm) was chosen. • Morgan Sindall Construction was appointed to develop the project with the in-house education and technical teams to RIBA Stages 1-4. At RIBA Stages 1-2, detailed surveys were carried out including ground investigation, ecology, percolation tests and topographical surveys. The surveys confirmed that there were a number of site issues which would affect the budget. Some of these items were not identified/included in the feasibility study. • In June 2021 (at RIBA Stage 2), the feasibility cost plan was reviewed and this took account of emerging inflated costs. • In January 2022, a RIBA Stage 4 Cost Plan and Tendered works packages were received from Morgan Sindall, which were shared with Welsh Government. The costs of the project had reached £13,985,818. Having considered a range of alternative options, the advantages and disadvantages were shared in a series of meetings with Welsh Government officials, with a conclusion that the preferred option remained the most appropriate. • A funding proposal from Welsh Government would result in an uplift to the capital grant allowance from Welsh Government to £9,166,131, which would result in an overall shortfall of £4,819,869. However, this could be partly offset by £281,872 of Section 106 monies, which would result in a requirement for £4,537,815. • Officers had considered a number of possible 'value engineering' options, but as part of its increased offer, Welsh Government officials were keen that these would not impact on the benefits of the overall investment for learners, staff and the community. • The Minister for Education and Welsh Language had emphasised the importance of the need to reconsider the Council’s strategic outline programme for the Sustainable Communities for Learning Programme, to ensure that it demonstrated an alignment and a commitment towards the Council’s Welsh in Education Strategic Plan (WESP). Furthermore, the Minister had confirmed that no further business cases would be considered by Welsh Government until a revised strategic outline programme was submitted and approved. • Groundwork for the establishment of Ysgol Bro Penfro had been set and a great deal of work had already been completed, for example: o The statutory process for establishing the school was complete – approved by Council in October 2020; o A detailed design was in place; o Opportunities to capitalise on the excellent sport and leisure facilities at the adjacent Ysgol Harri Tudur / Henry Tudor School site; o Within walking distance of local housing – a criteria of the Childcare Offer Capital Grant; o The formation of an enthusiastic governing body, which had already named the school and has had its Instrument of Government approved by Cabinet. Councillor Woodham then highlighted that in addition to the need to establish Ysgol Bro Penfro, the ability to proceed with the Council’s Band B commitments was equally important, and maintaining the planned programme for these projects was key if the Council was to minimise the risk of further cost inflation. He stated that Morgan Sindall would need to review their price with the supply chain and carry out a mini tender; however, there was a high risk that the contract sum could increase due to the revised programme and current market conditions. Councillor Woodham then stated that given the cost increase, and the site abnormals, consideration had been given to the following: i. pausing the scheme so that volatile market conditions settle down; ii. re-visit the site selection to reduce the abnormals; iii. re-tender the scheme given how far the costs are from the original estimate; iv. review the project in line with recent Cabinet approvals on capital projects. Councillor Woodham highlighted that due to wider issues concerning the WESP and the Council’s Band B programme, it was preferable to proceed with the Ysgol Bro Penfro project. Councillor Guy Woodham Moved the Recommendation; Seconded by Councillor Alec Cormack. Councillor Tessa Hodgson stated that she had difficulty in supporting the recommendation and was concerned with the increasing cost of the project. She then highlighted the likelihood of further cost increases as the project progressed. In regards to the Council’s revenue budget supporting the capital funding, Councillor Hodgson highlighted that this would put a huge amount of pressure on the budget, which could ultimately impact on other service delivery. In regards to the allocation of the decision, Councillor Hodgson sought clarification from the Monitoring Officer, as it was said that Council was previously happy to support the original proposal of the project being 100% grant funded, however, there was now a difference in funding as well as a potential impact on the Council’s budget. Councillor Hodgson then highlighted the need to financially assist the 17 school buildings stated to be categorised as being in poor condition and exhibiting major defects. She stated that her preferred option would be to pause the project and explore alternative sites. In regards to the allocation of the decision, the Monitoring Officer stated that as long as the decision made at this meeting of Cabinet was within the overall capital budget approved by Council, then it could remain a Cabinet decision. [Councillor Jon Harvey joined the meeting at this juncture] The Leader sought clarification in regards to the consequences of pausing the project. In response, Councillor Woodham stated that there was a risk that if the capital fund was not utilised in order to support the delivery of Ysgol Bro Penfro, it would delay a decision in regards to the school and the construction costs and such costs could increase. He then stated that, as outlined in a letter from the Minister for Education and Welsh Language, the delivery of Ysgol Bro Penfro would demonstrate an alignment and commitment towards the WESP. If the project was not delivered, the Minister would ask the Council to re-assess any Band B projects and would pause any consideration of other future projects. Councillor Woodham stated that whilst he agreed with the concerns of Councillor Hodgson, he was reassured by the backing of both the Director of Resources and the Cabinet Member for Corporate Finance, and that moving forward with this project was the correct decision. Councillor Cormack stated that he agreed with Councillor Hodgson’s concerns and highlighted that it would have been more appropriate to make the decision after having received the outstanding figure from Morgan Sindall. He stated that the process led him to question whether the Welsh Government’s benchmark costs for capital projects were achievable in West Wales. Councillor Jon Harvey highlighted his support for the project but was aware of the concerns of his fellow Cabinet Members. He suggested that assurance be required from the contractors regarding the price, in order to ensure there were no further cost increases. In response, the Head of Infrastructure confirmed that once a price had been agreed with the contractors, it would be a fixed sum. He highlighted that various cost options were being explored to bring the project within or even below budget. He also mentioned that Morgan Sindall was aware of the pressures on the Council as well as the concerns of Members in regards to cost. Councillor Woodham added that the first part of the recommendation was asking for the approval of the £4,537,815 which would potentially be offset by £1.2 million from Welsh Government, however this had not been included within the recommendation as it had not yet been agreed. Councillor Hodgson made reference to the site selection and stated that it was unsuitable. In regards to the price Morgan Sindall could potentially offer, Councillor Hodgson suggested that the Council was in a vulnerable position and highlighted that the contractors would work in their best business interests. In response, the Head of Infrastructure stated that Morgan Sindall subcontract out the majority of work in subcontract packages, which were specifically priced and viewed by the Council in order to understand exactly how the final figures were obtained. Councillor Cormack highlighted that it was not an easy to decision to make, but stated that it was important to proceed with the Ysgol Bro Penfro project in order to avoid delays on various other projects. Councillor Woodham then reiterated that the additional funding from Welsh Government was also to cover inevitable inflationary pressures. Councillor Rhys Sinnett agreed that the decision was not an easy one, but stated his support for the recommendation and emphasised the strategic importance of some of the planned developments, which ultimately outweighed the various funding challenges. The Leader then stated that he shared the views of Councillor Hodgson, but would support the recommendation in order to avoid delaying other projects. The vote, undertaken by way of a roll call, was carried. The votes were recorded as follows: For the Motion: Councillors David Simpson, Michelle Bateman, Alec Cormack, Rhys Sinnett and Guy Woodham [5] Against the Motion: Councillor Tessa Hodgson [1] Abstentions: Councillor Jon Harvey [1] RESOLVED (a) That the new capital project cost of £13,985,818 for Ysgol Bro Penfro, an increase of £4,537,815 to be met by the Authority, be approved; (b) That Welsh Government be requested to provide the projected underspend of £1,250,000 from the second tranche of the Welsh medium Capital Grant, for the purpose of reducing the Council’s capital contribution towards Ysgol Bro Penfro, as identified in (a).
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