Contents

1.Purpose of Report3

2.Recommendations3

3.Background5

4.Conclusions6

5.Members and Witnesses12

Appendix 1: Scoping Document14

Appendix 2: Roles and Responsibilities of 17

Hertfordshire Property, Mace and Mouchel

Hertfordshire Property Partnership

1.Purpose of Report

1.1 This is the report of the Hertfordshire Property Partnership Topic Group which examines the relationship between MACE, Mouchel and Hertfordshire Property within the Property Partnership

1.2 The scoping document can be seen at Appendix 1. The papers issued

to Members prior to the meeting can be found at:

Agendas and papers of the Hertfordshire Property Partnership Topic Group

1.3It should be noted that the report does not seek to address specific problems at individual sites (of which members received many examples). The focus is to make recommendations for changesduring the life of the current contracts and to identify areas that need to be considered as part of the contract renewal process in 2012.

2Recommendations

2.1 General - All Projects

  • Review and clarify roles, responsibilities and relationships between Establishment Representatives including schools, Service Departments including CSF, Herts Property, Consultants (Mace and Mouchel) and works contractors. (4.4.1, 4.2.2)
  • Improve communications between all parties based on clarified roles and responsibilitiesand transparency over fee calculations; ensure all clients are given the name of the relevant Programme Officer within Herts Property in case of problems with either of the Consultants, provide appropriate training to all parties. (4.1.1, 4.1.2, 4.2.1, 4.2.2, 4.2.3, 4.4.1, 4.4.2)
  • Formalise a relationship between the Consultants and schools representative organisations such as the Heads Forum’s. (4.2.1, 4.4.1)
  • Improve the quality of outline business cases, including initial cost estimates and of revised / final business cases prepared following feasibility studies; business cases to include appropriate standards, deliverability risks and to be signed off by all relevant parties. (4.1.6, 4.1.7)
  • Review the structure of Herts Property to ensure appropriate staffing arrangements, with suitable skills and experience, including programme management, contract management, costing and financial management. (4.4.3)

2.2 Major Projects (>£250k) and Minor Works (£100k-£250k) - Mace as

Consultant

  • Develop reduced and standardised technical specifications to improve overall value for money. (4.1.4)
  • Explore opportunities for a system-build approach to schools. (4.1.5)
  • Explore the scope for expanded use of 'design and build' contracts. (4.1.5)
  • Agree a clear hand-over of projects from CSF to Herts Property.(4.2.1, 4.4.1)
  • Review with Mace their specification to ensure that the project overhead is proportionate to the project size. (4.1.4)
  • Ensure that maintenance and energy considerations are considered in design (whole life costing) and that the Maintenance Consultant (Mouchel) is invited by Mace to input at appropriate design stages. (4.1.6)
  • Consider changes to the way the current SMARTE East framework is used, to increase competition and drive quality and price. (4.1.3)
  • Consider changes to the approach to resolving snagging issues. (4.3.2)
  • Improve monthly reporting from Mace to Herts Property to enable project exceptions to be reviewed, escalated and resolved. Agree with Mace revised performance indicators and measurement of overall customer satisfaction as part of a post project review, for incorporation in the current Mace contract. (4.3.4, 4.3.5)
  • Request the Director of Resources and Performance to seek to negotiate reduced fee scales from Maceand explore the most beneficial use of the flexibility to place 10% of relevant commissions other than to Mace. (4.1.3, 4.1.4)

2.3 Maintenance and Minor Works Projects (typically less than £100k) - Mouchel

as Consultant

  • Review responsibilities for delivering minor works and maintenance projects in schools, including greater delegation to schools ensuring there is appropriate support and guidance for schools taking additional responsibilities. Clarify residual HCC duties where a school chooses to exercise this greater delegation. This recommendation applies also to Minor Works £100k-£250k where MACE is the consultant. (4.1.3)
  • Develop with Mouchel different models for supporting schools in project managing works. (4.1.3)
  • Develop with Mouchel an approach for improving works contractors' performance, increasing competition to drive quality and price, and removal / non-use of poorly performing works contractors. (4.3.3)
  • Improve monthly reporting from Mouchel to Herts Property to enable project exceptions to be reviewed, escalated and resolved. Agree with Mouchel revised performance indicators and measurement of overall customer satisfaction for incorporation in the current Mouchel contract. (4.3.4, 4.3.5)
  • Request the Director of Resources and Performance to seek to negotiate reduced fee scales from Mouchel and explore the most beneficial use of the flexibility to place 10% of relevant commissions other than to Mouchel. (4.1.3, 4.1.4)

2.4 Future Contracts - from 2012

  • Evaluate fully the advantages and disadvantages of alternative contract models. (4.4.4)
  • Consider impact of the Building Schools for the Future (BSF) Local Education Partnership (LEP). (4.4.5)
  • Review potential for joint procurement with Highways. (4.4.5)
  • Explore potential for shared service with Pathfinder Councils, and other Authorities. (4.4.5)

.

3Background

3.1 The Property Partnership was established in 2003 following a tender process. The partners are MACE, Mouchel and Hertfordshire Property Services (the County Council). The Partnership is not a formal commercial partnership, but each of the partners has signed a separate, but identical protocol, and this is bound into the contracts with each.

3.2 The Partnership has the agreed objectives of:

  • Improving project delivery performance,
  • Introducing innovation into the design, delivery and management process,
  • Providing robust analysis of customer feedback monitored against targets (increasing year on year).

Further information on the partners can be found at Appendix 2. It should be noted that for the purposes of this scrutiny Lambert Smith Hampton are not included but may be subject to a future scrutiny.

3.3 Members received a short presentation on the Building Schools for the Future (BSF) process. They were pleased to be advised that BSF is separately on the scrutiny programme and recognised it was outside the scope of this scrutiny.

4Conclusions

4.1 Budget

4.1.1Members were advised that problems with a building project can occur

if the client has not been engaged at an early stage e.g. if a new head teacher takes up post after the building work has commenced; alternatively, the client attends meetings but is not fully engaged in the building process. Often clients do not understand the cost implications of any changes to a specification at a late stage in the Gateway process. To alleviate this members felt there should be a clear separation with clients focussing on outcomes and the Property Partnership focussing on the technical specification required to deliver those outcomes. (Recommendation 2.1)

4.1.2Members heard that, particularly with schools, CSF would approve changes to projectsin response to the views expressed by Heads and Governing Bodies with little apparent regard for finances. The Topic Group felt projects should not be allowed to be altered once they had commenced; instead, Members suggested that a project could be cancelled by a client and resubmitted and that the client would pick up additional costs. They also requested that a directive be given to contractors that they must only take instructions from the Project Manager and not make changes at the behest of the person responsible for the site such as a head teacher, centre manager etc (unless the school is acting as Project Sponsor and funding the project from their budget). (Recommendation 2.1)

4.1.3Members were concerned that an apparent straight-jacket approach to property meant that there is currently only one way of getting work done, irrespective of the size of the job, though they were advised that the current contracts allowed 10% of work by value to be put out to the market rather than through the existing contracts. They requested the Director of Resources and Performance to seek to negotiate reduced fee scales from Mace and Mouchel, given the economic situation, and explore the most beneficial use of the flexibility to place 10% of relevant commissions other than to Mace and Mouchel. Members also asked Herts Property to consider changes to the way the current SMARTE East framework is used to see if can increase competition and drive quality and price.

Members asked Herts Property to work with Mouchel to review responsibilities for delivering minor works and maintenance projects in schools. They were keen to encourage greater delegation to schools ensuring there is appropriate support and guidance for schools taking additional responsibilities (e.g. as Project Sponsor, Project Manager, appointing their own Consultant or contractor) and clarify residual HCC duties where the school chooses to exercise this greater delegation. They also asked that the same review take place with Mace for Minor Works of the value £100k-£250k where Mace is the consultant.

Members felt it important that Mouchel, supported by Herts Property,develop different models for supporting schools in project managing works. Various levels of service should be offered: from the default position where Mouchel act as Project Manager, through to supporting schools who wish to act as Project Manager themselves.

Members heard anecdotal evidence that some managers perceived jobs such as decorating, small scale building works etc could be done more cheaply by using very local businesses not on the County Council’s approved list and that the ‘risk’ associated with this was minimal. They felt, on balance, this was a risk worth taking given the expense associated with small works when provided through the contracts and should be considered as part of the design of the new tender. Members recognised that the officers/Head Teachers involved did need to have the capacity and skills to handle project sponsorship. (Recommendation 2.2, 2.3)

4.1.4 Members heard that in some areas the specification was proving to be too expensive; those used by Mace and Mouchel may be regarded as a Rolls Royce service, when a lesser service may be adequate. They were advised that in some areas a cheaper solution could be introduced. It would give savings but may mean items need replacing/refurbishing more regularly. Members asked that urgent consideration be given as to whetherterms can be renegotiated and some technical specifications changed within the existing contracts to give the County a financial benefit without the changes being detrimental to the service concerned.The also asked the project overhead applied by Mace be examined to ensure it is proportionate. (Recommendation 2.2, 2.3)

4.1.5 Members asked that consideration be given to moving towards a

‘system build’ for building works for schools. It was felt that in the current economic climate standardisation of design for schools could result in cheaper and faster projects due to economies of scale. It was noted that this would not always be possible because of planning restrictions and that it would be a move away from the trend to give schools greater autonomy in managing their own projects. They also felt a ‘design and build’ process where a single contractor is engaged to both design and build warranted consideration.(Recommendation 2.2)

4.1.6 Members welcomed the move to a three year capital programme and

endorsed the importance of costs being refined on an on going basis. They noted that this would help the county in planning its capital programme and could help bring more robustness to S106 calculations. They endorsed the need, particularly on the CSF programme, for more detailed business cases to be produced following feasibility studies and before costs estimates were finalised and the scheme was rolled forward for inclusion in Year 1 of the capital programme. Members asked that maintenance and energy considerations are considered in design (whole life costing) and that the Maintenance Consultant (Mouchel) is invited by Mace to input at appropriate design stages. Members also emphasised the importance of business cases being signed off by the relevant parties. (Recommendation 2.2)

4.1.7 Members noted that budgets are currently often set against historic or BCIS (Building Costs Information Service) data. These budgets can lack detail and are often inaccurate, coming out over, or equally likely under, the estimated cost. This is because project details have usually not been finalised at the point at which costings are done. Members felt it was important to understand costs in more detail and develop robust target costing. This would allow the establishment of a commercial target cost that can be used to motivate consultants and contractors to deliver value for money (VFM). (Recommendation 2.1)

4.2 Communications

4.2.1 Communications need to improve. This is a two way process: the Property Partnership needs to ensure that the client knows what they have contracted for; the client needs to play an active role; and both sides need to understand the outcomes. At the same time members felt the Consultant (Mace or Mouchel) need to build relationships particularly with schools representative organisations such as the Heads Forums. They also felt there was a training need in particular for those within schools dealing with property issues in order that they were clear who to contact when and have an understanding of how the contracts work. Members also believe that the situation could be improved if there was a clear handover between the department sponsor and the property sponsor. (Recommendation 2.2)

4.2.2 There needs to be an education process explaining how the Mace and Mouchel contract is structured and fees are arrived at. In particular clients do not understand that the Mace fees are a ‘belt and braces’ approach with everything covered including project management and cost management so maximum protection is afforded; this is not needed on all jobs. (Recommendation 2.1)

4.2.3 Members heard evidence that schools find it difficult to contact the Property Partnership. At times calls were not returned and emails not responded to, meaning problems were taking months to resolve. As members explored this it became apparent that schools were including the CSF Property Unit under the general heading ‘Property Partnership’ or ‘Herts Property’. Herts Property also explained that they generally did not know there was a problem until schools alerted them toa job not being completed satisfactorily. This is partly explained by schools tending to deal direct with Mace or Mouchel or through the CSF School Planning Unit. Members asked that all clients be given a name and contact details of the person in Herts Property, the Programme Officer,who as Project Sponsor, own the project and will be responsible for it. (Recommendation 2.4)

4.3Performance

4.3.1 Members heard that there was an immediate improvement in performance in the property service provided to clients following the establishment of the Partnership. This was a key factor in deciding in 2008 to extend the contract with the partners to 2012. It was also noted that the County Councils award of Beacon status for asset management could not have been achieved without the Partnership. However members were also made aware of a wide range of concerns from schools and others about the Property Partnership including cost, quality and communications. (See all Recommendations)

4.3.2 Witnesses explained that at times they had felt obliged to sign a job off as completed in order to get access to a building even though snagging issues may not have been resolved. Members were advised it can then be very difficult to get snagging issues addressed. (Recommendation 2.2)

4.3.3 Members heard that there are variations in standards of contractors on the approved list, to whom Mouchel gave work. The Topic Group felt that if contractors were not performing they should be removed from the approved list and replaced by others. (Recommendation 2.2, 2.3)

4.3.4Members felt that programme and project reporting was poor. They asked that a reporting mechanism for the client and Herts Property be introduced i.e. a monthly report provided by the consultant showing the progress made since the last report, project exceptions to be reviewed, escalated and resolved, priorities for the next period, key issues, significant risk and progress against key performance indicators. It was felt that this would help to drive improvement in programme and project reporting.(Recommendation 2.2, 2.3)

4.3.5A robust post project review should be introduced for all projects to replace the existing limited customer feedback. It should look at whether the original objectives of the project had been met and consider any issues that arose during intermediate reviews of the projects process. This should help ensure on going learning takes place, assist in the management of future projects and drive improvement. (Recommendation 2.2)

4.4 Structure

4.4.1Members were concerned that there is a lack of understanding about

the roles and relationships in project development and implementation and that it was not clear at what point a CSF project is handed over to Herts Property. Members were advised that this should happen at the end of the scoping process but were made aware that this was not always the case. Members agreed this should happen and felt the responsibilities should be as follows:

  • The client/service sponsor is responsible for identifying the need for a project to advance service objectives, and bidding/seeking to secure the money to deliver it (i.e. CSF bids to members/government for money to expand a school to meet local need).
  • The client/service sponsor is responsible for scoping what is required in output terms to meet these service objectives, sometimes called the “Brief” (e.g. CSF determines that this requires a fully-accessible class-room, foundation-stage classrooms located next to nursery provision, etc, in conjunction with the school in question).

At this point responsibility transfers to Herts Property.

  • The technical/property adviser is responsible for developing technical solutions or proposals to meet these requirements (i.e. an architectural solution is developed to meet the needs expressed in the Brief)
  • The technical/property adviser is responsible for delivering the solution (e.g. a building extension is built)

(i.e. initially CSF has leading role, with Property in supporting role - this should then cleanly switch at relevant Gateway stage to Property having leading role, with CSF in a supporting role). (Recommendation 2.1, 2.2)