{meta} Agenda item - Greater Manchester Mayor's Walking and Cycling Challenge Fund - Chapel Street East Scheme Phase 1

Agenda item

Decision:

Salford City Council - Record of Decision

 

I Paul Dennett, City Mayor, in exercise of the powers contained within the City Council Constitution do hereby approve:

 

1.    Proposals for the Chapel Street East Phase 1 Mayor’s Challenge Fund scheme;

 

2.    The proposed allocation of Section 106 contributions totalling £305,720 and local third-party contributions totalling £190,000 as Council match funding towards the Chapel Street East Phase 1 scheme;

 

3.    That the scheme should be procured in accordance with the Council’s Contractual Standing Orders through an existing Framework using the proposed procurement route set out in this report;

 

4.    The delegation of authority to the Strategic Director Place, in consultation with the S151 officer, to submit the Full Business Case (FBC) to the Greater Manchester Combined Authority (GMCA) for review; and

 

5.    The delegation of authority to the Strategic Director Place, in consultation with the S151 officer, to draft and approve the Grant Funding Agreement (GFA) between Salford City Council, Transport for Greater Manchester (TfGM) and the GMCA.

 

 

The Reasons are:

 

  1. A business case for the scheme is currently being developed for submission to Transport for Greater Manchester.

 

  1. A successful business case is fundamental to securing project delivery funding for the scheme.

 

  1. The scheme is proposed to commence with the procurement of a preferred supplier in April 2021.

 

  1. The Council needs to be clear on its ability to provide match funding as part of this business case process. 

 

  1. S106 contributions and a local contribution make up a significant proportion of this match funding.

 


Options considered and rejected were:

 

  1. Procurement via the Manchester City Council Highways and Infrastructure Construction Works Framework (MCC HICWF Framework).

 

  1. Meet the match funding obligation from elsewhere in Council resources.  However, this would place additional pressure on the Capital Programme.

 

  1. Do not deliver the Chapel Street East Phase 1 scheme.

 

Assessment of Risk: Medium

 

The following key project risks have been identified: -

 

 

1.    A tendered cost for the scheme is required when submitting a Full Business Case (FBC). Without an FBC approval grant funding will not be approved for construction of the scheme.

 

2.    Subject to the submission/approval of business cases, scheme delivery funding will be awarded on the basis that the Council is able to make a match funding contribution of £495,720.  A significant proportion of this (£305,720) has been identified to come from already received S106 contributions with a further £190,000 expected to come from local third-party match funding.  Should the contribution from S106 allocations and local match not be agreed within the Council, this would leave a shortfall which would need to be met from elsewhere in Council budgets.  The other alternatives for the council would be to not proceed with delivering the scheme.

 

3.    The local match funding of £190,000 has been agreed in principle with English Cities Fund with discussions underway to secure this funding. If the match funding is not agreed or reduces this could leave a shortfall in the Councils match funding resource, which would need to be met from elsewhere in Council resources.

 

4.    The Statutory Undertakers Budget Estimate (C3) Fees and Diversion costs are c. £1.5m. An additional allowance of £300k has been made following a quantitative risk assessment for general statutory undertaker issues and unforeseen statutory undertakers to reflect the site-specific conditions. The detailed costs, full scope and timescales of potential diversions are currently unknown.  However, C4 detailed specifications and costs have been requested and are in the process of being returned. 

 

 


The source of funding is:

 

A breakdown of the proposed funding sources is summarised in the following table followed by further detail on the proposed approach to securing the funding for the scheme.

 

 

Funding Source

£

MCF

4,302,664.66

Local - Third Party (ECF (NBG) Phase 2)

190,000.00

Local - S106 contributions

305,720.00

Total

4,798,384.66

 

 

Mayor’s Challenge Fund (MCF)

The scheme will be seeking a proportion of the required funding from the MCF. In order to access this funding stream, a requirement is to submit a Full Business Case (FBC) to the Greater Manchester Combined Authority (GMCA) for review.

 

A draft business case was submitted in December 2019. The FBC is currently in the process of being finalised in close collaboration with Transport for Greater Manchester (TfGM) and specialist suppliers.

 

The FBC is expected to be submitted to GMCA in May 2021 once the Tender process has been completed and the highest scoring tender has been identified.

 

Local Match Funding

Prior to making the MCF funding submission, discussions had taken place with the Councils S106 and Finance officers to agree a reasonable approach to match funding for the scheme.

 

At programme entry, suitable match funding towards the project was identified from within the City Councils S106 receipts and through contributions agreed with third parties. A total of £495,720 of local match was identified at programme entry which included contributions relating to the following:

 

-       Local S106 contributions for Trinity Riverside (Select Property): £55,720;

-       Local S106 contributions from the Chapel Wharf development: £250,000;

-       Local third-party contributions to be provided by English Cities Fund (ECf) associated with New Bailey Gateway Phase 2: £190,000;

 

Work is currently underway to secure S106 funds for the scheme that were identified at programme entry in consultation with Ward Councillors and Salford City Council officers. Further details of the current position regarding specific S106 contributions for city centre MCF schemes can also be found in the Property & Regeneration public agenda item of 22nd February for the ‘Active Centres, Corridors & Neighbourhoods Project’.

Third-party contributions - New Bailey Gateway Phase 2:

The New Bailey commercial quarter is supporting the westward expansion of the city centre Central Business District over the River Irwell and into Salford. The first phase of development by English Cities Fund (ECf) is complete with further phases of development underway or planned. ECf recognise the importance of delivering the improvements to New Bailey Street area and have approved in principle match funding of £880k towards New Bailey gateway Improvements.

 

An initial phase of funding was secured for a phase 1 scheme which has delivered public realm improvements on New Bailey Street. As part of discussions in support of the Tranche 1 bid, agreement in principal was also reached for a contribution from this match funding to go towards Chapel Street East Phase 1 (£190,000).

 

Work is currently underway to secure this funding through discussions with ECf.

 

Legal Advice obtained:  Tony Hatton

When commissioning contracts for the procurement of goods, services or the execution of works, the Council must comply with the Public Contracts Regulations 2015 (PCR) and its own Contractual Standing Orders (CSOs), failing which a contract may be subject to legal challenge from an aggrieved provider. CSO’s stipulate that where a suitable framework exists, this must be used unless there is an auditable reason not to do so.

 

The proposed procurement of the works will be by way of a tender exercise in accordance with the process set out in the Bolton Council Highways Framework Contract 2019/2023 (Option B), which itself was procured in accordance with the PCR using an OJEU process, and will therefore ensure that the risk of challenge to the award of any contract is minimal and that any challenge, should it materialise, is extremely unlikely to be successful.

 

The purpose of a framework agreement is to select through a procurement / evaluation process, a number of providers who can meet the service requirements of the Council, as and when those services are required. If they are required then the Council will undertake an exercise to call off the services from one or more of the providers who have been selected to be on the framework and this may be through any number of ways, in this instance by way of mini competition. A contract will then be formed between the Council and the chosen provider(s). The Council will need to have followed the procedure set out in the framework agreement for mini competition to ensure the procurement process is compliant.

 

The report refers to funding for the works coming from s106 funds. The expenditure must be in accordance with the terms of the relevant planning obligations. Should the Council allocate S106 funding outside of the conditions within the agreements, or outside the timescales, or in breach of applicable Regulations, a developer may challenge that decision and claim back contributions.

 

Legal shall be happy to advise on the grant funding agreement between the Council, TfGM and GMCA to ensure the Council’s interests are protected. The terms of any grant funding agreement will need to be adhered to in the event that there are clawback provisions for failure to comply.

 

Financial Advice obtained:  Natalie Birchall

Confirmation the budget is available to go out to tender.

 

The Chapel Street East Phase 1 scheme, as proposed in this report, has a current estimated cost of £4.8m of which the estimated cost of implementing the scheme is £4.4m. The scheme received MCF programme entry approval in July 2018 and the proposals outlined in this report will facilitate full business case development and approval by GMCA, to secure the access to the Mayor’s Challenge Funding.

 

At programme entry, suitable match funding towards the project was identified from within the City Councils S106 receipts and through contributions agreed with third parties associated with neighbouring development. A total of £495,720 of local match was confirmed and the following receipts have been received and approval is to be sought to ring fence for scheme delivery. 

 

-       Local S106 contributions for Trinity Riverside (Select Property): £55,720;

-       Local S106 contributions from the Chapel Wharf development: £250,000;

 

Work is currently underway to secure S106 funds for the scheme that were identified at programme entry in consultation with Ward Councillors and Salford City Council Officers. This has included a briefing to Lead Member for Planning and Sustainable Development on the 12th January, Property & Regeneration briefing on 8th February 2021 & will include presentation at the City Mayor Property & Regeneration meeting for decision on the 22nd February 2021.

 

In agreement with GMCA, as the scheme has received programme entry approval SCC is able to claim scheme development costs in advance of FBC approval which is expected in July 2021.  In accordance with MCF rules, SCC will cash flow the project and reclaim from TFGM via quarterly claims. As part of the MCF process for Full Business Case, Salford City Council must enter into a legally binding Grant Funding Agreement (GFA). This forms a financial contract between Salford, TfGM and GMCA. The council will look to match fund the scheme from S106 contributions. Following FBC approval to be submitted to GMCA in May 2021, further approvals and a procurement board report will be required to award a contract to the successful contractor and include confirmations of secured match funding.

 

Procurement Advice obtained: Heather Stanton

 

The Bolton Council Highways Framework Contract 2019/2023 has been procured compliantly in line with OJEU and Public Contract Regulations 2015. In accordance with Contractual Standing Orders the procurement team will support the technical team to undertake a complaint mini competition through this framework in line with the framework agreement.

HR Advice obtained: N/A

 

Climate Change Advice obtained: N/A

 

The following documents have been used to assist the decision process:

 

-       Chapel Street East Phase 1 Progress Update and Public Consultation.  Briefing report of Head of Highways and Infrastructure to Lead Member for Planning & Sustainable Development (18th June 2019).

 

-       Lead Member for Planning and Sustainable Development briefing 12th January 2021. City Centre Salford ‘Chapel Street East Phase 1’ GM Mayor’s Challenge Fund For Walking & Cycling (MCF).

 

-       Lead Member for Planning and Sustainable Development briefing 12th January 2021. City Centre Salford ‘Active Centres, Corridors & Neighbourhoods Project’. GM Mayors’ Challenge Fund for Walking & Cycling (MCF). Section 106 match funding contributions.

 

-       Appendix 2: City Centre Salford ‘Active Centres, Corridors & Neighbourhoods Project’. Tranche 5 Funding Submission to the Greater Manchester Mayor’s Cycling & Walking Challenge Fund. 5th April 2019.

 

Contact Officer:  Simon Telford                          

Telephone number: 07799677214

 

  • This decision is not subject to consideration by another Lead Member.
  • The appropriate scrutiny to call-in the decision is the Growth & Prosperity Scrutiny Panel.                       

 

 

Signe: Paul Dennett

City Mayor

Dated: 22 February 2021

 

 

This decision was published on Monday, 22 February 2021                                            

This decision will come in force at 4.00 p.m. on 1 March 2021                                                      unless it is called-in in accordance with the Decision Making Process Rules.

 

 

 

Supporting documents: