Meeting documents

Financial analysis of each option

The attached financial information covers reducing our office based workstations by 40%. There are several different options:

1. Existing sites and off site storage

2. Keynsham Town Centre development purchase and retention of Lewis House

3. Keynsham Town Centre development purchase

4. Bath development purchase

5. Keynsham Town Centre development lease and retention of Lewis House

6. Keynsham Town Centre development lease

7. Bath development lease

Other options have been explored but did not meet the selection criteria.

These options were:

8. Keynsham, Cadbury site lease

9. Keynsham, Cadbury site purchase

Space Standard assumptions made:

• In the existing sites option, all properties will remain at their current spatial standard.
  
• Future accommodation needs are assumed to be 940 workstations (40% reduction).
  
• The spatial standard for new a build is 12m2 gross internal area per workstation. This includes all meeting rooms, break out areas and staff facilities. See background paper.
  
• Floor areas for new buildings. All quoted m2 gross internal areas.
  

• 40% reduction in Workstations	KTC + Lewis	KTC only	Bath
  Office space	7,034	9,171	9,171
  Data Centre	162	162	162
  One Stop Shop	250	250	-
  Gross internal Area m2	7,445	9,582	9,332

• The Hollies will be refurbished to a standard to accommodate 170 workstations.
  
• The Guildhall will only retain the political support staff, estimated to be 10 plus One Stop Shop staff estimated at an additional 10 staff.

Property assumptions made:

• Existing Leases.

• All existing leases will run the full term.

o Northgate House

The lease on Northgate House is due to expire at the end of March 2016. It is assumed that this will be assigned to another leasee from 1^st July 2013 therefore all costs relating to this property will cease at that date. If this does not happen then the cost of the project will increase by approximately £1m.

o Plymouth House

The lease on Plymouth House expires in August 2011. As the Authority does not have an automatic right to renew we could potentially have a short term accommodation issue. In the `existing sites' option it is assumed that Plymouth House is replaced like for like and therefore there are no cost implications. In all other options the costs for Plymouth House (or its replacement) continue until the end of March 2013.

o Trimbridge House

The lease on Trimbridge House expires November 2010. The landlord is currently pressing the Authority to ascertain its short term intentions. We do have the right to renew, although it may not be possible to negotiate a short term lease. In the `existing sites' option we would renew our lease. In all other options it is assumed that we are able to acquire a short term lease and vacate the premises at the end of March 2013.

o Riverside

We are currently `holding over' our lease which expired at the end of October 2006. It is assumed that this situation will be allowed to continue or a new lease be granted (only applicable in the `existing sites' option)

• New build

• One Stop Shops

o Bath

The facilities will be refurbished within the Guildhall. The estimated capital cost of this is £600k and will be spent in 2009-10.

o Keynsham

If option 4 (new building in Bath) is chosen then a One Stop Shop facility will be leased in the centre of Keynsham. If a new build option in Keynsham is chosen then the One Stop Shop facility will be housed in the new build. The revenue implications for both options have been included and a budget of £250k capital included for fit out.

o Midsomer Norton

The One Stop Shop will remain within the Hollies. The costs of updating this are included in the cost of refurbishing the building are estimated at £1.4m and would be spent between 2011 and 2013.

• Off site storage requirement

Financial assumptions made:

• One off and short term costs

o Decommissioning costs

There is a provision of £100k decommissioning per leased property. Therefore there is £200k included in the cash flow in 2012-13 for Trimbridge House and Plymouth House and £100k for Northgate House in 2013-14.

o Dilapidations

The only property that could attract dilapidation costs is Riverside, currently estimated in excess of £360k. As it is assumed that this property would be part of the regeneration scheme in Keynsham these costs have NOT been included in this cost model.

o Office moves

The cost of moving files and other office items has been costed into the model. Any additional costs relating to temporary office moves prior to the main decant have not been included as there is no plan in place for this to happen.

o Sale of Property

All costs associated with the sale of property are revenue costs. It is assumed that these costs will be charged in 2013-14.

o Appendix E Travel

Employers are legally required to detail an employee's place of work in the contract of employment. The Council stipulates a place of work, an administrative base, but also includes provision that staff may be required to work at other council establishments within the geographical boundary of Bath and North East Somerset.

If proposing to relocate staff there is still a requirement to consult on the proposal and to make reasonable adjustments in order to facilitate that move. This can include adjusting starting and finish times and offering a disturbance payment for staff who incur additional travel time/cost as a result of the employer's decision. It could equally be accommodated by the employer providing transport to the new site(s).

The Council currently operates a four year scheme based upon provisions within the National Scheme of Conditions of Service. The scheme is very specific. This might be varied to cover a significant staffing exercise, as indeed it was in the case of Local Government Reorganisation.

The actual costs are difficult to determine in the absence of details regarding the location of new premises and who is to be relocated/where they live at the time of the relocation etc.

All B&NES staff have the flexibility described above in their contracts. All would reasonably have the expectation of the application of the disturbance allowance (or alternative negotiated) as part of their terms and conditions of employment

The disturbance factor might be excluded from new appointments providing this is built into contracts of employment. You would need to specify the new premises and the date of relocation. This might not be explicit but must be reasonable i.e. you would have to give a date in the reasonable future, not simply `at a date in the future'

An estimate has been included based on effecting 475 staff and increasing their travel by 15 miles a day at a cost of 40p per mile for 220 days a year. This is an estimated cost in excess of £2.5m over 4 years.

• All new build options exclude s106
  
• IT costs associated with the new data centre are included.
  
• Build costs in Keynsham Town Centre do not include anything other than office accommodation, data centre and a one stop shop (although there will be a planning requirement for mixed use which will have to be funded from other sources). It does not include car parking nor a library which will have to be reprovided.
  
• All costs quoted are at 08-09 prices. No allowance has been made for inflation running at approx 4% with construction inflation at approximately 6%
  
• Includes financing from capital receipts. Estimated income could be approximately £7.97m. Made up of: