Subject Pre Purpose Presenter Read - GBS LEP...To receive a presentation on Innovation Projects and QTIH Approving the Programme-Level Entry and the conditional allocation of £3,021,000

Greater Birmingham & Solihull Local Enterprise Partnership Programme Delivery Board Agenda

Wednesday 20th March 2019, 09:30 – 11:30 Sense UK, Touchbase Pears, 750 Bristol Road, Birmingham, B29 6NA

Subject Pre Read

Purpose Presenter

1 Welcome & apologies N/A - Chair

2 Declarations of interest N/A - Chair

3 Decisions and actions from the last Programme Delivery Board meeting and matters arising

Attached To agree the decisions and actions of the meeting on 19th January 2019 and update on any matters arising.

Rehana Watkinson

4 Growth Programme Overview and Q3 2018/19

Attached To consider

Quarter 3 2018-19 Programme Update

Approach to reviewing projects that are reporting slippage of finances and milestones or any reviews that the Board may wish to make into any particular project.

Russell Eacott

5 Project Investment Decisions a) Quantum Technology

Innovation Hub b) Symphony Hall c) Journey Time Reliability

Phase Two

Attached a)To consider:

To receive a presentation on Innovation Projects and QTIH

Approving the Programme-Level Entry and the conditional allocation of £3,021,000 LGF capital grant funding in the 2019/2020 financial year for the QTIH project.

Approving Programme-Level Entry and the conditional allocation at a lower level of intervention based on;

o Affordability

o Demonstrating an improvement of the BCR/economic benefit

Placing the project on a reserve list for consideration should there be financial slippage at the end of 2019/20 or 2020/21

b) To approve the investment of up to £6,000,000 (six million pounds) of Local

Growth Fund (LGF) capital grant to Performances Birmingham Limited (PBL) towards the total project cost of £13,200,000 (thirteen million and two hundred thousand pounds) for the delivery of the Symphony Hall Extension project, following the submission of a Full Business Case and its Independent Technical Evaluation.

c) To consider:

a)Paul Edwards, Kai Bongs (UoB), Rooqia Malik (UoB) b)Russell Eacott c)Russell

Page 2 13/03/2019

Subject Pre Read

Purpose Presenter

Approving investment of £501,000 (five hundred and one thousand pound) LGF capital grant funding, or

Placing the project on a reserve list for consideration should there be financial slippage at the end of 2019/20 or 2020/21

Eacott

6 Investment Recommendations to LEP Board

a) Paradise Circus

b) Enterprise Zone Draft 2019 Investment Plan

Attached a) To note progress and various matters that have been raised and clarified since the LEP Board agreed to additional funding in December 2018 and specified certain conditions that needed to be satisfied first.

A verbal update will be provided at the meeting as to further progress in meeting the conditions. The Board are asked to pass any comments they may have onto the LEP Board which meets on the 27 March 2019 to consider if the conditions have been met and funding can be released.

b) To note the current draft of the EZIP (2019) and to note that the final draft will be presented to LEP Board in June 2019 once the funding requirement for Birmingham Smithfield has been better defined.

[The Appendix is delayed with the printers and will be issued under separate cover]

a)Peter Mawson b)James Betjemman

7 Project Exceptions a) HS2 Curzon Station Enhanced

Public Realm

b) Selly Oak New Road

Attached a) To note approval of change request.

b) To note deferral of approval of change request of financial slippage into 19/20.

a) Russell Eacott

b) Russell Eacott

8 Enterprise Zone Health Check Attached a) To note the findings of the EZ Health Check report and discuss recommendations

b) Verbal update on the integration of the EZ into the PMO

Tom Fletcher

Russell Eacott

9 Any other business

Dates of Future Meetings:

Wednesday 22nd May 2019 – 9:30-11:00am (venue tbc – Cannock Chase)

Thursday 9th September 2019 – 9:30-11:00, Committee Room 3. Redditch Town Hall, Walter Stranz Square, Redditch B98 8AH

Thursday 14th November 2019 – 9:30-11:00 (venue tbc – Solihull)

Page 3 13/03/2019

Forward Plan – future Board Items

a. Growth Places monitoring report b. Review of Programme and Pipeline Projects Review Outcomes c. Programme Risks – New Risk Register d. Assurance Framework changes e. LEP Annual performance Review f. New Reporting Format for Q4 2018/19 g. SEP Enabling Fund Monitoring

Greater Birmingham & Solihull Local Enterprise Partnership Programme Delivery Board

Programme Delivery Board Meeting

Wednesday 16th January 2019, 09:00 – 11:30

Smith and Williamson, 9 Colmore Row, Birmingham B3 2BJ

Decisions & Actions

1

Present: Chris Loughran – Deputy Chair for Delivery, GBSLEP (Chair) Mike Lyons – Connectivity Director, GBSLEP Alison Jarrett – Assistant Director, Finance and Governance, Birmingham City Council (Accountable Body Representative) Anne Brereton – Director of Managed Growth, Solihull Metropolitan Borough Council Tony McGovern – Managing Director, Cannock Chase District Council Nigel Greenwood – Finance Manager, Birmingham City Council Simon Marks – GBSLEP Board Member Phil Edwards – Assistant Director, Birmingham City Council Paul Faulkner – Chief Executive, Greater Birmingham Chambers of Commerce Roger Mendonça – Chief Operating Officer, West Midlands Growth Company

Apologies: Ian Miller – Chief Executive, Wyre Forest District Council Michelle Nutt – Assistant Director, Cities and Local Growth Unit Patrick Hanlon – GBSLEP Board Member

In attendance: Tom Fletcher – Acting Head of Delivery, GBSLEP Executive Rehana Watkinson – PMO Manager, GBSLEP Executive Russell Eacott – Interim Programme Director, GBSLEP Executive Presenting: Anthony Hodge (SRO, Staff CC), item 5a only Eric Henderson (Project Manager, Staffs CC) item 5a only Jon Robinson (Barberry) – item 5a only Sylvia Broadley – BCC – item 5b only Lada Zimina – LEP Project Champion

#

Subject Decisions Actions Timescales Owner(s)

1 Welcome and apologies

The Chair welcomed everyone to the meeting of the Programme Delivery Board (PDB) and thanked Smith and

PDB Terms of Reference to be updated

21/03/2019

RW





Decisions & Actions

2

#


Williamson for hosting the meeting

Apologies were noted as above.

The PDB noted that:

Roger Mendonça is the nominated representative for the West Midlands Growth Company in place of Neil Rami.

TF will be moving on from the LEP Executive in the coming months

Russell Eacott has recently joined the LEP Executive as the Interim Programme Director

2 Declarations of Interest TMcG declared a non-personal interest in the Kingswood Lakeside project. PE declared an interest in the Hydrogen Bus and Snow Hill Public Realm project as the funding applicant

All other Declarations of Interests have already been logged.

3 Decisions and actions of the last meeting

The decisions and actions of the PDB meeting that took place on 8th November 2018 were agreed.

All actions were either completed or in progress.

Deadline for submission of the Commonwealth Games FBC corrected to refer to date of 31st March 2019.





Decisions & Actions

3

#


There were no matters arising that were not addressed at this meeting.

4 Project Exceptions a) Kingswood

Lakeside b) Hydrogen Bus

Project c) STEAMhouse

The PDB:

Received a presentation on delivery progress for

Kingswood Lakeside including another variation to

milestones since the change request was approved on 8th

November 2018

Noted the exceptions report for the Hydrogen Bus project

and the project issues and risks that may result in financial

slippage

5 Project investment decisions

a) Snow Hill Public Realm

Decisions for noting only:

b) Kidderminster

The PDB

Approved the allocation of £4.66m of LGF grant and

£1.969m of EZ grant funding to Snow Hill Public Realm

project, following the independent appraisal of the Full

Business Case and subject to conditions. Also

recommended that improved outcomes are determined to

assist with the delivery of this public realm and the use of

the new space.

Noted the approval of the conditional allocation of £2.407m





Decisions & Actions

4

#


Railway Station c) A38 Bromsgrove Package 1 d) Redditch

Gateway

of LGF grant to the Kidderminster Railway Station project,

made by the LEP Director.


of LGF grant to the A38 Bromsgrove Package 1 project, by

the LEP Director.


of LGF grant and £2.5m of Revolving Investment Fund loan

funding to the Redditch Gateway project, made by the

Programme Delivery Board via written procedure.

6 Enterprise Zone financial model overview

The PDB received an overview presentation on the Enterprise

Zone financial model.

7 Enterprise Zone finance update

The PDB:

Noted the current financial position for the programme in

2018/19 and 2019/20 (Appendix A).

Noted the actions taken to reduce the in-year deficit and

increase the level of contingency funding by 2019/20

(Appendix B).

Agreed to continue to deliver the contractually committed





Decisions & Actions

5

#


projects and those in development, as set out in scenario 2

of Appendix B.

Noted that further work is required to agree the

capitalisation of revenue budgets

8 Programme reporting The PDB considered and the proposed revised approach to

programme-level reporting to the Programme Delivery Board

and LEP Board.

Future meeting dates of the Programme Delivery Board for 2018: Wednesday 22nd May 2019 – 9.30-11am - (venue tbc Cannock Chase location) Thursday 12th September 2019 – 9.30-11am - Committee Room 3. Redditch Town Hall, Walter Stranz Square, Redditch, B98 8AH Thursday 14th November 2019 – 9.30-11am – (venue tbc Solihull location) Thursday 13th February 2020 – 9.30-11am - Birmingham Hippodrome, Hurst St, Southside, Birmingham B5 4TB

KEY:

CR PH TMcG

Chris Loughran Phil Edwards Tony McGovern

IM MN PF

Ian Miller Michelle Nutt Paul Faulkner

AB RE AJ

Anne Brereton Russell Eacott Alison Jarett

PH SM

Patrick Hanlon Simon Marks

TF JS

Tom Fletcher Jane Smith

RW ML

Rehana Watkinson Mike Lyons

RM Roger Mendonça PDT Programme Delivery Team PBD Programme Delivery Board CLoG EZ

Cities and Local Growth Enterprise Zone

BEIS Business, Energy & Industrial Strategy

DCLG PMO

Dept. Communities & Local Government Programme Management Office





Decisions & Actions

6

LGF Local Growth Fund RIF Revolving Investment Fund

Item 4

1 of 5

Greater Birmingham and Solihull LEP

Programme Delivery Board/LEP Board

20th March 2019

Growth Programme Overview Q3 2018/19

1. Recommendations

1. The Programme Delivery Board is requested to:

i. Note the Report and the progress being made on the LGF Programme

2. Background and Overview

1. GBSLEP has been allocated a total of £186,055,008 across 3 Growth Deals which has to be spent by March 2021.

2. Currently £183.64m is forecast to be spent and progress on current spend is 54%. Against the £19.3m Government grant allowance for this year we expect to spend £28.24m, an increase of nearly £9m. During the last quarter the £100m grant payment milestone was achieved.

3. Stage Gateway Process

4. The table below identifies the status of projects and their progress with the LGF Programme. The full programme is shown on Appendix 1.

Number of

Projects Propor

tion Variation from Q2 to

date

Total Funded Projects 64 100% +3

Live Projects 28 44% -2

Completed Projects 36 56% +6

Projects by Stage Gateways

Completed Projects (Stage Gate 6+) 36 56% +6

Delivery (Stage Gate 5) 18 28% -1

Contracting (Stage Gate 4) 3 5% -1

Final Business Case (Stage Gate 3) 4 6% -1

Outline Business Case (Stage Gate 2) 3 5% -1

Item 4

2 of 5

The three new projects added to the Programme were:

Burton Regeneration and Flood Defence

A38 Bromsgrove Major Scheme Package 1

Redditch Gateway

The six completed projects were

Battery Way

Engineering centre for manufacturing support

Peddimore

Aspirations for All

NMA

Minworth

4 Outputs and Outcomes

5 The table below identifies the benefits realisation of the LGF allocations against the forecast expenditure/outputs.

Total Outcomes and Outputs

Public / Private

contributions

(£m)

Jobs created

/

safeguarded

Homes

built

Commercial

Floor space

(m2)

Learners

Assisted

(p.a.)

Total Forecast 397.5 25,744 10,251 489,195 5969

Growth Deal Target 119.0 20,300 4,900 641,703 12,500

Variation +139.2 +5,444 +5,351 -152,508 -6,531

6. The changes here include:

Learners assisted (Skills) – withdrawal of projects following changes in the external environment for FE Colleges a few years ago. The majority of the GBSLEP support for skills development now comes from the LEP’s wider enabling activity and other funds.

3. Funding Profile and Investment Decisions

7. With two years until the conclusion of the LGF it is extremely important that we have a clear

picture on deliverability of individual projects so they conclude and draw down funding by the end of 2020/21. This review is currently underway and the PDB will receive a report to its May 2019 meeting regarding this and the results of a Pipeline Project review which is also be undertaken.

8. The Project Investment Decisions Forward Plan (Appendix 2) includes a list of projects which are

currently under consideration but are at different stages within the funding allocation process. Those that are behind schedule with submission of key documentation to meet Gateway progress

Item 4

3 of 5

9. Over-programming has greatly assisted with catching up on the programme delivery expectations and with the release of the RIF last Autumn back into the LGF we have seen in the last quarter projections on meeting the £186m total grant rise from Q2 2018/19 forecast spend of £137m

10. Slippage with projects does remain a concern to the LGF performance. A number of changes

were made last month to the re-profiling of projects resulting in £5.1m moving from 2018/19 to 2019/20. At the commenced the year annual spend for 2018/19 was expected to be over £38m but has dropped £10m due to slippages of projects.

Financial Year Previous

Years

2017

/18

2018

/19

2019

/20

2020

/21 Total

Growth Deal allocation £96.49m £25.70m £19.30m £12.72m £31.85m £186.06m

Forecast Expenditure* £63.20m £23.26m £28.24m £29.16m £39.82m £183.68m

Variation - -£2.44m +£8.94m +£16.4m +£7.97m -

Level of over-programming - 91% 146% 229% 125% -

Revolving Investment Fund** £33.29m

Growth Deal - conditionally

allocated funding

£53.32m

Growth Deal - contracted funding £132.31m

Growth Deal funding available for

Strategic Pipeline***

£2.38m

Claims to date 2018/19 £17.11m

. * Forecast expenditure does not include priority pipeline projects until a conditional allocation is made.

**RIF is being transferred back converted into the allocation to match at total LGF Award of £186,055,008.

*** This figure does not take account for conditionally allocated funding not proceeding.

4. Risk Profile

11. The current Risk Profile has been demonstrated as follows:

Risk Status Management response

Project development and

delivery stalls due to lack of

resources or internal support

within project sponsors

↔

Historical slippage being

overcome via continuous

pipeline development and

overprogramming in financial

years and across the

programme as a whole. Certain

themes of project pipeline slow

to progress.

Additional resource established within the LEP

Programme Team to support project sponsors to

develop and deliver projects

SEP Delivery Plans identify pipeline projects where

the LEP will intervene to accelerate development

with revenue funding

LEP project development funding being accessed

by projects to progress from OBC to FBC

Item 4

4 of 5

More rigorous assessment of deliverability has

been adopted as part of revised project appraisal

processes

Projects on strategic pipeline becoming more

developed and increased competition for funding

Increased use of over-programming enables easier

switching of resources from stalled projects in

future years

Poor programme

management decisions are

made due to a lack of

accurate data on projects

↔

Manually operated data

management systems are time

consuming and create the

potential for errors in the

processing of information from

highlight report to management

system to report

Additional resource recruited into the LEP to more

proactively assess project information

PDB ‘Star Chambers’ review projects that are

assessed to be a higher risk of not proceeding to

plan

PMO improvements in place and PMO review will

identify further opportunities over Q3/4 18/19

New project monitoring, change request,

completion and evaluation forms are providing

more relevant data

New Programme Management System (PMS) to

enable improved data management and reporting

to be explored in Q1 19/20 (slipped from Q4 18/19)

12. A new Programme level Risk Register for LGF and other GBSLEP programmes is being

developed to ensure consistency in managing risk throughout the whole organisation within an agree Risk Appetite Framework.

5. Overall Programme Status (Current Key Issues)

Budget Time Benefits

↔

Growth Deal funding insufficient to

deliver all projects we would ideally take

forward. SEP Delivery Plans informing

where to target resources to ensure we

achieve greatest impact for the

resources available.

↑

Greater confidence in the accuracy of

project delivery plans following ongoing

testing through additional PMO resource

and PDB.

LGF over-programmed to 200% in

2018/19 at start of year – decreased to

under 150% as year-end approaches.

↔

With the exception of skills, and to lesser

extent commercial floorspace, forecast

outputs exceed original forecast. The

ongoing comprehensive review of

benefits indicates that the skills forecast

is higher than previously thought, but the

original target is unlikely to be met.

Actions in hand:

1. Pipeline projects being developed to

Outline Business Case allowing

other potential sources of funding to

be identified and pursued.

2. Pipeline prioritisation exercise

Actions in hand:

1. Level of over-programming for

2018/19 higher than previous years

to reduce risk of any slippage.

2. Revolving Investment Fund to be

returned to the LGF programme to

Actions in hand:

1. SEP Delivery Plans identify priority

interventions required to support the

SEP ambition and targets.

2. Review meetings held with all

completed projects to commence

Item 4

5 of 5

underway, focussing on

deliverability as the LGF

programme enters final two years.

3. Exploration into options to provide

greater support to develop pipeline

projects in order to take advantage

of current and future funding

opportunities.

accommodate over-programming

and smooth out uneven financial

profile through to 2020/21.

3. Developed pipeline with competition

for funding will enable re-allocation

of funding from underperforming

projects.

testing of outputs and outcomes,

following improved guidance

provided to projects. Annual

forecast update due following Q4

2018/19.

3. Pipeline of skills projects continues

to be developed with a four projects

preparing business cases and a

further two at Expression of Interest.

6. Programme Management Office (PMO)

13. Resourcing within the Programme Management Office (PMO) who manage the LGF

Programme has been strengthened since last year to primarily match the number of projects under management with a new Project Support Officer. The Head of Delivery is relocating to the North West and an Interim Programme Director has been brought in to review the PMO, especially as it took on the role of integrating the Enterprise Zone into its operations last year and is now looking to centralise and streamline other LEP current and future programmes.

14. The PMO is also looking to review the reporting process and sample highlight reports

have been considered and discussed and this should be fully addressed for the next Q4 2018/19 Reporting Period

15. The Local Assurance Framework is currently being updated in line with the National Framework and will be presented to the GBSLEP Board later in March 2019.

Reviewed by: Russell Eacott Interim Programme Director Prepared by: Russell Eacott Interim Programme Director Contact: [email protected] Mobile – 07709 955910

Date: 13 March 2019

mailto:[email protected]

Item 5a

1 of 4


Programme Delivery Board

20 March 2019

Programme Level Entry Decision - Quantum Technology Innovation Hub

Purpose

1. This paper is to present the Quantum Technology Innovation Hub (QTIH) project to Programme

Delivery Board for decision on programme level entry and conditional allocation:

i. The University of Birmingham (UoB) are requesting £3,021,000 (three million, twenty one

thousand pounds) of Local Growth Fund (LGF) capital grant towards the delivery of the

QTIH project. This is in accordance with the Greater Birmingham and Solihull LEP

(GBSLEP) Assurance Framework following the submission of an Outline Business Case

(OBC) and its independent technical evaluation.

Background

2. In May 2018, the University of Birmingham (UoB) submitted an Expression of Interest for LGF

support to address a gap in their funding to complete delivery of the QTIH project. The project

received a B rating demonstrating good strategic fit and it was agreed that the project should

proceed to the OBC stage.

3. The total capital project cost is £6,677,200, with a funding gap of £3,021,000 that is requested

from LGF to create a physical facility with specialist equipment, inside the Metallurgy and

Materials building at the UoB.

4. GBSLEP Executive has worked with the UoB to develop the OBC which was submitted

November 2018. An independent technical evaluation (ITE) was undertaken and report

produced by Aecom. The outcome of the evaluation concluded that the project has satisfied

GBSLEP’s assurance requirements for deliverability and value for money in line with and in

proportion to Green Book guidance. In parallel the OBC was reviewed by the GBSLEP

Innovation Challenge Forum (ICF).

5. Having reviewed Aecom’s report and the ICF review, further clarifications were sought from

UoB. These were received in January 2019 and along with the business case and its evaluation

this information has been used as the basis of this paper.

6. UoB have allocated the space for the project and are set up to fully deliver within 2019/2020

financial year.

Case for Change

7. Quantum is a disruptive technology that will augment key sectors including life science,

manufacturing, engineering and transportation. The Engineering and Physical Sciences

Item 5a

2 of 4

Research Council (EPSRC) invested £120 million in a national network of four Quantum

Technology Hubs, one of which is in Birmingham. Each hub has a different area of focus and

UoB is the lead for sensors and metrology exploring the properties of quantum mechanics and

how they can be harnessed for use in industry.

8. With global interest the technology is developing at pace and this project aims to maximise the

benefit of the national hub for the region including the Industrial Strategy Challenge Fund

opportunity in April 2019 of £70M for Commercialising Quantum Technologies. The UoB expect

to be successful and with this project in place, win significant funding from this competition, this

will also support their track record of supporting 44% of all InnovateUK projects in the quantum

technology sector nationwide.

9. The QTIH will provide entrepreneurial researchers, sensor technologists, systems engineers

and businesses with access to demonstration, test and validation equipment locally, with onward

links to National Physical Laboratory’s (NPL) significant national resources. Collectively, these

facilities will help to accelerate the development of proof of concepts & prototypes for innovative,

new scientific instruments and products built around commercial applications.

10. The QTIH will be co-located at UoB with the UK National Quantum Technology Hub in Sensors

& Metrology, the West Midlands NPL Hub and link to the Centre for Human Brain Health. It will

create the infrastructure to support the recent award of £2.3m ERDF revenue funding for the

Centre for Innovation in Advanced Measurement in Manufacturing (CIAMM).

11. The project will refurbish an existing area of the Metallurgy and Materials building at the UoB

and purchase and install specialist equipment. This will help cement NPLs presence in the

region and provide a route to sustainability for CIAMM. The project will also support the creation

of a shielded room in the Centre for Human Brain Health to house magnetoencephalography

(MEG) scanners supporting quantum technology research into brain health to develop the next

generation of interventions and tools for personalised brain healthcare.

12. The facility aims to be a catalyst to attract commercial scientific instrument and metrology firms

to the region, to further translate the region’s expertise and assets into economic benefit.

The milestones for the practical delivery of the QTIH facility are set out below:

Milestone Completion date

Completion of detailed design July 2018

Submission of Outline Business Case to GBSLEP Nov 2018

Submission of Full Business Case to GBSLEP April 2019

Procurement of Test and Validation Equipment commences May 2019

Work Commences on Site (started) Jan 2018

Construction finishes on site Mar 2019

Test and Validation equipment installed September 2019

Facility commences operation Apr 2019 partial

Full operation October 2019

Centre for Human Brain Health Facility commences operation Dec 2019

Item 5a

3 of 4

Outputs and Outcomes

13. The project is expected to result in the following outputs and outcomes:

Output / outcome forecast 2018/19 2019/20 2020/21 21/25 Total Jobs created or safeguarded as a direct result of the intervention

10 10 12 24

56

Jobs created or safeguarded as an indirect result of the intervention

4 5 8 12 29

Commercial / employment floorspace created (m2)

300m2 300m2

Skills –New learners assisted (in courses leading to a full qualification)

6 20 30

56

Skills –New apprenticeships delivered as a direct result of the project

5 5 10

14. The QTIH aims to deliver £2.42 for every £1 of LGF investment and an overall BCR of 1.71

The project anticipates increasing economic benefits through the following:

Start-ups and spin-offs

GVA for construction partners

Student income and expenditure through talent attraction

Revenue generated from R&D spill-overs

Employability of researchers involved with the facility

Impact of joint development activities with facility suppliers for novel technical solutions.

Increased number of postgraduates, postdocs and researchers using the facility to develop new skills

Number of technologies, prototypes, industrial designs developed and transferred Further evidence and analysis of the potential impact of these outcomes and how they will be achieved is required through the Full Business Case

Funding Profile 15. The funding profile is set out below.

2017/18 2018/19 2019/2020 2020/21 Future Years

Total

Capital funding (£000)

Other public sector

£1.70m £1.96m £0 £0 £0 £3.66m

GBSLEP LGF Grant funding requested

£0 £0 £3.02m £0 £0 £3.02m

Total capital cost £1.70m £1.96m £3.02m £0 £0 £6.68m

16. The University of Birmingham undertook a full state aid analysis and state they are fully

compliant with State Aid regulations.

Item 5a

4 of 4

Conclusions 17. The QTIH will provide facilities and equipment that complement the UK National Quantum

Technology Hub in Sensors & Metrology, the West Midlands NPL Hub and link to the Centre for

Human Brain Health. It will create infrastructure to support CIAMM and provide entrepreneurial

researchers, sensor technologists, systems engineers and businesses with access to a local

demonstration, test and validation facility to accelerate commercial development pathways for

quantum technologies.

18. As presented the project demonstrates a relatively high level of intervention and low BCR

however as an innovation project it may not be possible to assess the true potential of benefits

arising from increasing the regional assets in quantum technology. Hence this is a risk based

investment opportunity for GBSLEP.

19. The project set up ready to deliver in the 2019/2020 financial year

20. On this basis the Programme Delivery Board is asked to consider;

a. Approving Programme-Level Entry and the conditional allocation of £3,021,000 LGF

capital grant funding in the 2019/2020 financial year for the QTIH project.

b. Approving Programme-Level Entry and the conditional allocation at a lower level of

intervention based on;

i. Affordability

ii. Demonstrating an improvement of the BCR/economic benefit

c. Placing the project on a reserve list for consideration should there be financial

slippage at the end of 2019/20 or 2020/21

Reviewed by:

Prepared by: Wendy Edwards

Project Champion Contact: [email protected]

07548 712827

Date: 20/03/2019


Quantum Technology Innovation Hub(QTIH)

-Multi-£bn Growth Opportunities for a Modern

Region

Kai BongsUniversity of Birmingham

2

What can they be used for?The long term potential of the quantum technology market is estimated to be comparable in size to the consumer electronics manufacturing sector – today valued at £240bn globally.

Impact

Underground risk in

infrastructure projects

0.5% GDP

£700bn in water

management globally

10%-15% of crop yield

infl. by soil degradation

Dementia: 1% GDP

ADHD: 1% GDP

£100bn global

autonomous vehicles

market by 2027

29M drones by 2021

GNSS resilience

~7%GDP

UK National QT Programme

£700M committed or allocated to date

UK National Quantum Technology

Hub for Sensors and MetrologyProf. Kai Bongs

www.quantumsensors.org

Hub-Related UK QT Ecosystem

102 collaborative projects with industry

69 companies invested money

£75M project value

(in addition to initial £35.5M)

>9 patent applications

>142 Records of invention

50 jobs in industry

44% of all IUK grants in QT are linked to our Hub

Emerging QT Sensors Ecosystem

TopGaN Quantum Technologies Ltd

Applications

Sensors

Components

http://www.avantiplc.com/

http://addedscientific.com/

QTIH - Opportunities

Allow local companies to take part in the QT

economic revolution by involving them in

project consortia:

• DS&E Navigation call (AltNav) 04/19, ~£100M

• Dstl Navigation call 07/19, ~£30M

• ISCF wave 3 – QT call 07/19, ~150M

Entice companies to create subsidiaries in

Birmingham

• Teledyne-e2v and Msquared Lasers offices

• Northrop Grumman QT facility

QTIH – Need

QTIH test and validation facilities provide a focal point for

industry collaboration activities

QTIH equipment will provide a unique skills training ground

in the use of advanced sensors – apprenticeships, CPD,…

• National Buried Infrastructure Facility (£28M)

• Centre for Human Brain Health (£25M)

• STFC/MTC Innovation Hub

QT Hub phase II is mainly recurrent cost

QT Sensors Market Opportunity£4bn / year

QT Sensors Hub Phase II 2019-2024

£20M for low TRL Technology Research

£70M IUK/ISCF wave IIIFunding for commercialisation

projects in Quantum Technologies

Call to open April 2019 CIAMMEducating and

advising local business on QT opportunities

QTIHTest & validation

facilities supporting local businesses

NPL

STFC regional Hub

28M National Buried InfrastuctureFacility

25M Centre for Human Brain Health

End user leads:AirbusBAEsBPBTJaguar Land RoverLeonardoNetwork RailNorthrop Grumman

50+ supply chain companies

National QT Programme Leveraged UoB Infrastructure

Crucial Elements to create local benefits

QTIH in the local QT landscape

Interest from

22 companies

since January

Appendix

– Illustration of Sensor Opportunities

Sensors underpin the Knowledge Economy

Knowledgeof interest to

end user

Sensors providing data

ComputerConverting data

into information

Quantum Sensors can change the world

Potential: 4£bn/year market and 10% GDP impact

Transforming the Knowledge Economy

Impact Example 1: Infrastructure Productivity

Gravity pioneer ISCF project

Impact Example 2: Precision Agriculture

Impact Example 3: Healthcare

Impact Example 4: Transport

Hub Strategy

Technology

Research User Challenges

Research to

Demonstrate

Benefits

Supply chain

Components & subsystems

Applications

End-User Systems

Engage the whole

Industrial

VALUE CHAIN

Example: Gravity Innovation Chain

Construction Value Chain

Met & Matmaterials

Physicscomponents

Civil Engineeringdata services

Physics &Engineering

systems

https://www.google.co.uk/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjNiuq6wsvRAhXCaRQKHVUoAGEQjRwIBw&url=https://quantic.ac.uk/innovation/innovation-case-studies/clyde-space-censis-engd-studentship/&psig=AFQjCNE7QkJnZjqrhs65eFtmXb_S-9C05Q&ust=1484822881471096

Item 5b

Investment Report – Symphony Hall Extension 1 of 4



20 March 2019

Investment Report – Symphony Hall Extension Recommendation

The LEP Programme Delivery Board is requested to:

Approve the investment of up to £6,000,000 (six million pounds) of Local Growth Fund (LGF)

capital grant to Performances Birmingham Limited (PBL) towards the total project cost of

£13,200,000 (thirteen million and two hundred thousand pounds) for the delivery of the

Symphony Hall Extension project, following the submission of a Full Business Case and its

Independent Technical Evaluation in accordance with the GBSLEP Assurance Framework.

Background

1. Performances Birmingham Limited (PBL) submitted an Expression of Interest for the Symphony

Hall Extension project in October 2016 as part of the Growth Deal 3 process. Having been

assigned an ‘A’ strategic fit rating, the project submitted its Outline Business Case (OBC) in May

2017. The total project cost was estimated to be £12.5m, with a £4.5m LGF request to GBSLEP.

2. Following the independent technical appraisal (ITE), the OBC was approved by the Programme

Delivery Board (PDB) in November 2017, with funding allocation conditional on submission of

Full Business Case (FBC) in Q3 of FY 2018/19.

3. In April 2018, PBL applied for the £0.41m development funding to develop RIBA stage 3

designs; the development funding was approved and released in May 2018.

4. The subsequent designs incorporated improved and expanded features, including a double

height foyer providing additional performance space. However these additional features

increased the project budget by £0.7m to the total of £13.2m. At the same time, a change of

funding priorities by the Heritage Lottery Fund (HLF) resulted in the project not applying for the

£2m HLF contribution, contrary to the original fundraising plan submitted at the OBC stage.

5. PBL submitted a Change Request to GBSLEP Executive in August 2018, requesting that LGF

contribution to the project is increased by £1.5m to a total of £6m. Based on ITE conclusions,

PDB approved the increase in conditional allocation, subject to it being treated as a

contingency amount against confirmed costs, and subject to LGF funding being available at the

time of each request to access contingency.

6. PBL subsequently submitted the project Full Business Case (FBC) in December 2018; the ITE

was completed in March 2019. The FBC is attached for reference, with appendices available

upon request.

Item 5b


7. In February 2019, PBL signed the Pre-Construction Services Agreement with ISG Ltd, covering

RIBA 4 stage designs and leading to a JCT contract due to be signed in July 2019.

8. In line with the plan presented in the OBC, the project aims to start on site in July 2019 and

complete works in August 2020.

Case for change

9. The project’s case for change as articulated at the OBC stage remains. Symphony Hall (SH) is considered one of the finest concert halls in the world, presenting a world-class programme of music and education, and acting as a major cultural draw for Birmingham. Over 350,000 audiences enjoyed performances at SH in 2015, across a programme of classic, jazz, folk, rock, pop, comedy, and community events.

10. At the same time, Symphony Hall needs to react to rapidly declining public funding by becoming a self-sustaining organisation. Extending the building will transform its commercial capability by adding new space, enhancing customer experience, and providing new income streams.

11. This construction project extends and re-models SH’s public spaces to create a building that is

economically sustainable, vibrant, and connected to the public realm. 12. Key physical components of the development are expected to consist of:

An extended glass frontage into Centenary Square and dedicated front entrance;

1,429sqm employment generating floorspace created;

Expanded foyers, a double-height performance space, a new daytime cafe, improved bars, a relocated box office, as well as flexible learning, private event and performance spaces.

13. The development of SH is expected to:

Increase SH’s GVA per annum to £13.3m from the baseline of £8.7m;

Increase SH’s sustainability through higher earned income;

Develop SH as an internationally renowned venue through enhanced front of house performances, private entertainment spaces, and more varied, high quality catering and bar offers;

Create new programmes for participation, engagement and training.

14. The return on GBSLEP’s £6m investment is projected to be to £40.3 per every £1 invested, with

the Net Present Value over a 30-year period estimated at £242m.

15. The ITE of the FBC concluded that PBL “has the capacity, appropriate project governance and

project management resources in place to deliver the project”, and the FBC demonstrated “a

clear and established route to delivery”. The report is exempt from disclosure because it

contains information relating to the financial or business affairs of any particular person

(including the authority holding that information).

Outputs and outcomes

16. The project will result in the achievement of the following outputs and outcomes:

Item 5b


17. Detailed annual breakdown of the incremental achievement of outcomes is provided in the FBC

attached.

Funding profile

18. The proposed funding profile for the project is as follows:

Capital Funding Source (£m) 2018/19 2019/20 2020/21 Total

GBSLEP Local Growth Fund 0.408 2.512 3.080 6.000 Match funding – Arts Council England 0 1.482 3.018 4.500

Match funding – BCC Prudential Borrowing 0 1.000 0 1.000

Match funding – SH Reserves 0.200 0 0 0.200 Match funding – Philanthropy Campaign 0.076 0.554 0.869 1.500

Total 0.684 5.549 6.967 13.200 19. The £13.2m budget includes a £1,139,300 client contingency; a £220,555 campaign

contingency; as well as a £907,500 risk allowance (constituting 10% of the building works).

20. The project is affordable to LGF, including within financial years.

Key risks and issues

21. The project contains several substantial risks most of which need to be resolved prior to the start

of works.

22. Planning permission is due to be determined in March 2019, following the submission of

planning application and PBL’s engagement with relevant BCC department. This is a delegated

decision that does not depend on the planning committee schedule.

23. The project is yet to finalise its funding package. PBL confirmed that £200,000 of cash reserves

have been allocated to the proposed development. The stage 2 application to Arts Council

England for a £4.5m grant is expected to be determined in early May 2019. Philanthropic

fundraising in the region of £925,000 has been confirmed at March 2019 and a further £500,000

of funding bids are pending the resolution of planning permission. Finally, a £1m prudential

Outputs

1,441sqm new and 2,765sqm refurbished floorspace at the Symphony Hall

Quantifiable Outcomes

Increased audience numbers to 515,743 per annum by 2023/24

Increased annual income by £1.5m by 2023/24

527 total net additional FTE jobs over 30 years

12 total apprenticeships over 30 years

Item 5b


borrowing facility from BCC has been confirmed in November 2018 with an additional £2m

available if required; the terms of the borrowing agreement are being finalised.

24. Failure to secure the £4.5m contribution from the Arts Council England will rend the project

unviable as any delays in the current programme caused by further attempts to raise requisite

funds would push it outside LGF eligibility.

25. PBL, BCC and the NEC Group are in negotiations to extend the lease for the SH from 2040 until

2050. Lease negotiations are due to conclude in April 2019 and are expected to include the cost

of land used for the extension valued at £150,000; as well as an increase in direct lease costs

pro-rata to existing floor space.

26. PBL is in negotiation with the Enterprise Zone-funded Centenary Square redevelopment project

due to be completed in July 2019. The area of the Centenary Square affected by SH Extension

(works compound and the area immediately in front of the extension) is proposed to be included

in the scope of works of PBL’s contract with ISG Ltd, with appropriate transfer of the materials

and the funding.

27. Project programme is constrained by two key dependencies: City of Birmingham Symphony

Orchestra (CBSO) Centenary celebrations planned for September 2020, as well as the hosting

of Conservative party conference in October 2020, both of which entail substantial financial and

reputational risks for all stakeholders involved. The current 53-week programme of works, due to

be completed in August 2020, includes a 3-week float. Successful completion of the project will

require GBSLEP Executive to closely monitor project milestones, expenditure and contingency

plans.

Conclusions

28. The Symphony Hall Extension project directly addresses GBSLEP Strategic Economic Plan’s

commitment to enhance and harness the potential of cultural and creative assets in the GBS

area.

29. The Programme Delivery Board is asked to approve the investment of £6,000,000 of LGF grant

funding to Performances Birmingham Limited for the delivery of the Symphony Hall Extension

project, subject to the following conditions:

SH extension secures planning permission, by start of works

SH lease is extended to 2050, by start of works

Project’s package of match funding totalling £7.2m is secured, by start of works

The £1.5m funding allocation agreed following the Change Request in September 2018 is treated as a contingency allocated against construction and client costs, to be repaid if unused, at project completion.

The £1.5m contingency is further subject to LGF funding being available at the time of each request to access contingency.

Reviewed by: Russel Eacott / Tom Fletcher

Prepared by: Lada Zimina, Project Champion

Contact: [email protected]

Date prepared: 12 March 2019


1 Symphony Hall Extension Full Business Case

Symphony Hall Extension

Business Case (between £2.5m and £10m LGF sought)


Business Case Checklist Project: Symphony Hall Extension Project Sponsor (applicant): Performances Birmingham Limited STRATEGIC ASPECTS

All Section / page

Have you appended a map? Appendix 1&2

Are there clear SMART objectives in terms of outcomes and are dependencies, constraints and risks identified?

Pages 13,17,9

Have you included a SWOT analysis Appendix 30

Have you included supporting evidence of partnership bodies’ willingness to participate in delivering the bid proposals?

Appendices 8/9/13/23/29

ECONOMIC ASPECTS

All Section / page

Have you provided relevant supporting material? Appendix 14

Is there a reasonable range of options? Pages 18-19

Is ruling out of potential promising options clearly justified? Pages 25-26

Is distributional analysis needed, who benefits, who pays? n/a

Are all costs and benefits quantified, if not is this justified? Page 22

Are there any decisive un-quantified cost/benefits and are they clearly explained? n/a

Are results of each option presented clearly including do nothing/minimum option?

Page 27

Are risks, constraints and dependencies identified and managed? Yes

Is optimism bias properly included and aligned with risk? Page 31

Are wider impacts assessed e.g. sustainability, competition, regulatory impact? Page 17

Are monitoring and evaluation costs included? n/a

Is there a Benefits register; benefits realisation (delivery) plan? Appendix 4

If PFI involved is tax properly treated and is risk transfer clearly achieved? n/a

Is best VfM = max NPV and if not do un-quantified benefits justify the cost? n/a

COMMERCIAL ASPECTS

All Section / page

Is the proposal commercially feasible / deliverable? yes

What procurement is required; goods, services, land, buildings?

What is the procurement strategy? Page 8


What are the key contractual issues? Appendix 25/6

Are there clear contractual key milestones and delivery dates? Appendix 17

FINANCIAL ASPECTS

All Section / page

Have you enclosed a letter from an independent valuer to verify the market value of land if land is being included as part of the non-LGF contribution towards scheme costs?

n/a

Have you enclosed a letter confirming the commitment of external sources to contribute to the cost of the scheme?

Appendices 23 &29

Focus on affordability; is full budget funding secured and budgeted by all parties? In progress

What are the impacts on income/expenditure a/c and on balance sheet if applicable?

Page 35, Appendix 3

Are potential cost over runs provided for are the any contingent liabilities? Yes

Any guarantees? n/a

MANAGEMENT ASPECTS

All Section / page

Has a Project Plan been appended to your bid? Appendix

Has a QRA been appended to your bid? Appendix 5/6

Has a Risk Management Strategy been appended to your bid? n/a

Have you appended a Communications Plan that is in keeping with GBSLEP and Midlands Engine guidelines?

In development

Is the proposal practically deliverable and what are the delivery plans? Yes

Are there clear delivery dates and detailed milestones? Yes

Does the proposal require programme or project management techniques? n/a

Has a change management plan been included? Yes

Is there a contract management plan? Yes

Does the plan include clear arrangements for OGC Gateway peer reviews? n/a

Is there a contingency plan with arrangements & provision for risk management? Appendix 5/6

Is there a benefit realisation table and plan? Appendix 4

Does the plan include monitoring arrangements (who when how and costs) Yes

Does the plan include post implementation evaluation arrangements (including who when how and costs)?

Page 40

Has evidence of the sponsorship body’s governance approval of the project outline been appended to the bid?

Appendix 15

Have you reviewed the latest version of the GBSLEP Assurance framework to gain understanding of the GBSLEP processes? https://gbslep.co.uk/resources/reports/assurance-framework

Yes

STATE AID COMPLIANCE

All Section / page

Have you completed the State Aid form? No

Have you provided evidence of being State Aid compliant? Appendix 18


DECLARATION

All Section / page

Has the SRO declaration been signed? - (11)

Yes

Has the Section 151 (or Chief Financial Officer) declaration been signed? (15) Yes

APPENDICES

All Section / page

Economic Appraisals Yes

Financial Appraisals Yes

Benefits Register Yes

Risk Register Yes

Risk Potential Assessment (RPA) No: n/a

Letter of commissioner/ Stakeholder Support Yes

Draft OJEU notice Yes

SOP/ Strategic Business Plans. Yes

Strategic Economic Plan /2

Business Case Proforma (£2.5m to £10m)

1: SCHEME TITLE

Symphony Hall Extension

PROJECT START DATE July 2019

PRACTICAL COMPLETION DATE August 2020

TOTAL PROJECT COST: £13.2m Indicate the amount of Local Growth Fund being requested and when funds would need to be made available.

Amount (£) Date Required Other information to support your application

£6m July 2019 £408,148 already released as development funding

Transport and Connectivity Scheme: No

Skills and Learning Scheme: No

Housing and Regeneration Scheme: No

Business Support Scheme: No

Another Type of Scheme?: Yes

2: CONTACT DETAILS AND SCHEME LOCATION


Name of Lead Contact: Nick Reed

Email: [email protected]

Telephone: 07725 675948

District: Birmingham

Location of scheme: Centenary Square, B1 2EA

3: HEADLINE DESCRIPTION

“Making an Entrance” – the public facing name for the project – is an extension of Symphony Hall to provide expanded and improved public spaces. These will comprise new box office, café bar, performance space, corporate hospitality rooms and spaces for learning & participation activities. The project’s three investment objectives are: Objective 1: To deliver 1,441m2 new and refurbished space for Symphony Hall Objective 2: To increase audience numbers to 515,743 per annum by 2025 Objective 3: To build financial resilience by generating £1.5m more income per year by 2025 The project will give more residents and visitors a world class cultural experience and extend Birmingham’s reputation as a cultural city. It delivers a new iconic frontage onto Centenary Square.

4: GEOGRAPHICAL AREA

This is an extension to the front elevation of Symphony Hall which is located at the eastern end of Centenary Square. The redevelopment will create a new frontage approximately 3 metres deeper into the Square than the existing building at ground level, with an additional 3 metre cantilever. OS Grid Reference: SP 06241 86761 Postcode: B1 2EA Please append a map showing the location (and route) of the proposed scheme, existing transport infrastructure and other points of particular interest to the bid e.g. development sites, areas of existing employment, constraints etc. Have you appended a map? Yes: Appendix 1 and Appendix 2

5: PURPOSE

The primary objective of this project is to allow Symphony Hall to grow its earned income in face of declining public subsidy, enabling a secure financial future for one of the region’s iconic cultural assets. In addition, the project will allow Symphony Hall to expand its cultural offer, attract new audiences and contribute to a much enhanced sense of place around Centenary Square.


6: EXECUTIVE SUMMARY

A: Introduction

This Full Business Case (FBC) seeks approval to invest an estimated £6m in a £13.2m project.

B: The Strategic Context and Case for Change

The Symphony Hall Extension project stems from the understanding that a vibrant cultural offer is essential for the health and prosperity of any modern city. Birmingham was a forerunner in using culture as a regenerator, and the city’s many cultural assets have helped attract major investment into the city. For the city to continue to develop, quality of life – of which culture is a key part – is paramount. However, the city’s cultural assets need investment to be able to generate more income to compensate for the significant reduction, and possibly future loss of, public sector funding. This project will create a more beautiful, welcoming and financially self-sustaining Symphony Hall. Public sector support is crucial for delivering this project. Many of the activities that Performances Birmingham Ltd (PBL, which manages Symphony Hall and Town Hall) undertakes are unsustainable in a free market as they require free admission or subsidised tickets. Although PBL presents numerous activities that are commercially successful, the business model is a mixed economy where the known loss-making activities in the charity’s remit are supported by commercial ventures. The project closely supports delivery of the GBSLEP Strategic Economic Plan (SEP). For Birmingham to achieve a key aim laid out in the SEP, becoming a major European City, the cultural offer of the city needs to continue to develop, creating a destination city with world-class entertainment. The Extension is a bold move with high impact both on SH’s long-term relevance and sustainability, adding to the value it will bring to Birmingham’s social and economic fabric.

The project is a strong fit with other national, sub‐regional and local investment plans and strategies. These include:

Arts Council of England’s 10-year strategy for England, Great Art and Culture for Everyone

The Big City Plan

Birmingham Culture Strategy

Birmingham Development Plan 2031

Centenary Square Project

The Arena Central and Paradise Circus Enterprise Zones. During development of the project, PBL and its advisors consulted widely with stakeholders and with Symphony Hall audiences. There has been universal support for the proposals. The SWOT analysis for the project is attached as Appendix 30

C: The Economic Case

The following options were shortlisted:

option 1 – status quo, do nothing or do minimum

option 2 – Investment to open Symphony Hall onto Centenary Square through the creation of a

new entrance and foyer/café on the ground-floor

option 3 – Investment to create the amenities of option 2, plus a substantial new performance

space which facilitates a much-expanded programme by allowing an independence of operation

that was not possible under option 2


Table 1 Key findings from the economic appraisal

Option 1 - Do nothing/do minimum/status quo

Undiscounted (£) Net Present Cost (Value) (£)

Capital £0 £0

Total costs £0 £0

Less cash releasing benefits (Net Present Value of Economic Impact over 30 years)

£411.4m £267.2m

Total -£411.m -£267.2m

Option 2 Undiscounted (£) Net Present Cost (Value) (£)

Capital

£12.5m £12.5m

Total costs £12.5m £12.5m


£673.0m £412.6m

Total -£660.5m -£400.1m


Capital

£13.2m £13.2m



£835.8m £509.2m

Total -£822.6m -£496.0m

Option appraisal conclusions: Option 1 – this option ranks third. Option 2 – this option ranks second. Option 3 – this option ranks first. Overall findings: the preferred option is option 3. Summary of overall results

Evaluation Results Option 1 Option 2 Option 3

Economic appraisals 3 2 1

Benefits appraisal 3 2 1

Risk appraisal 1 3 2

Overall Ranking 3 2 1

Option 3 is the preferred option because it generates the greatest positive economic impact and other benefits, while involving risks that PBL has processes in place to manage. While option 1 entails the least risk, it generates less positive economic impact and other benefits than either of the other two


options.

D: The Commercial Considerations

A full Architect-led design team was procured via OJEU and concluded in December 2017. PBL will start the procurement process for its main contractor in January 2019, completing procurement by March 2019. A two-stage tender is proposed with a contractor being selected on the basis of a first stage tender based on fixed preliminaries, overheads and profit. At Stage 2 the selected contractor will work alongside the design team during RIBA Stage 4 under a pre-construction services agreement. The contract sum will be based upon the agreed schedule of rates where applicable or upon competitively tendered sub-contract work packages. This will be a completely transparent and open book process ensuring that the full value of the works is subject to competition in the marketplace. In addition to the financial criteria a key aspect will be the quality of the contractor’s personnel and contribution to the buildability, logistics and phasing of works given PBL intends to remain operational to the fullest extent possible. This is the primary reason for adopting a two-stage approach and is considered vital to the successful delivery of the project. Having considered a traditional approach (design team remaining in the employ of PBL throughout) versus a design and build arrangement the latter has been preferred. There is a considerable amount of sub-contract design which would need to be covered by a contractor’s design portion supplement in any event and novating the design team to complete any unresolved design detailing on behalf of the contractor will reduce the risk associated with information flow during construction. The main risks are ensuring funding is in place to maintain sufficient cashflow without the need for over-reliance on PBL Charity reserves. A series of measures have been drawn up to mitigate this risk.

E: Funding and Affordability

Summary of financial appraisal

Table 2 The indicative financial implications of the proposed investment

Year 0 Year 1 Year 2 Total

18-19 19-20 20-21 £

£m £m £m

Preferred way forward:

Capital £1.1m £7.2m £4.9m £13.2m

Revenue £0m £0m £0m £0m

Total £1.1m £7.2m £4.9m £13.2m

Funded by:

Existing (LEP)

£0.4m £1.8m £3.8m £6m

Additional £1.4m £2.8m £3.0m £7.2m

Total £1.8m £4.6m £6.8m £13.2m

F: Management Arrangements


Project management arrangements These are set out in Appendix 3: Five year business plan PBL has strengthened its senior team to ensure the team is not only equipped with expertise in their own specific fields, but also possesses the industry knowledge to be able to manage project tasks which require a less specific and more expanded approach, and to be able to manage both sides of these roles without any compromise. The team will work on this project collaboratively with a number of external providers and there will be both internal project advocacy and external project management experience to steer the team through the process. In particular, the Chief Executive will be driving this forward from within the team. He was recruited specifically with a more commercial brief and likely capital project in mind and, as such, he is significantly focussed on ensuring that the team is able to deliver what is asked of them. He is supported by the Chief Operating Officer, a relatively new role also created with the project in mind. Benefits realisation and risk management These are set out in the Benefits Register, which is attached as an Appendix. Appendix 4: Benefits Register The Risk Registers are appended to this business case. They comprise a Capital Project Risk Register (identifies and assesses 57 risks) and a Commercial Risk Register (10 risks). Appendix 5: Capital Project Risk Register Appendix 6: Commercial Risk Register Post evaluation arrangements There will be an initial post implementation review (PIR) in December 2020 which will include empirical evidence from the re-opening season and audience feedback on the qualitative benefits of the project, collated using face to face interviews on site, and an online survey. The Project evaluation review (PER) will appraise how well the project was managed and whether or not it delivered to expectations. It is timed to take place after any post completion snagging period, most likely by early spring 2021.

G: Recommendation

Please formally make the required recommendation for approval of the scheme to proceed to the next stage.


7: THE STRATEGIC CONTEXT

A: Introduction

This is a Full Business Case (FBC) for the Symphony Hall extension. This FBC has been prepared using the agreed standards and format for business cases, as set out in the Green Book, from which guidance has been taken. The approved format is the Five Case Model, which broadly comprises the following key components:

The strategic case. This sets out the strategic context and the case for change, together with

the supporting investment objectives for the scheme;

The economic case. This demonstrates that the organisation has selected a preferred way

forward, which best meets the existing and future needs of the service and is likely to optimise

value for money (VFM);

The commercial case. This outlines what any potential deal might look like;

The financial case. This highlights likely funding and affordability issues and the potential

balance sheet treatment of the scheme; and

The management case. This demonstrates that the scheme is achievable and can be

delivered successfully in accordance with accepted best practice.

The purpose of this section is to explain and revisit how the scope of the proposed project or scheme fits within the existing business strategies of the organisation and provides a compelling case for change, in terms of the existing and future operational needs of the organisation.

B: The Strategic Context

1 Organisational overview Performances Birmingham Limited is a registered charity governed by a board of trustees. Birmingham City Council is the company’s sole shareholder. The stated charitable objectives are: (1) To promote and present concert performances of classical, popular and contemporary music, complementary to those of the City of Birmingham Symphony Orchestra and of world-class calibre. (2) To educate the public by promoting, fostering and encouraging the knowledge, understanding and appreciation of the arts, particularly music, providing an education programme for this purpose. This project stems from the understanding that a vibrant cultural offer is essential for the health and prosperity of any modern city. Birmingham was a forerunner in using culture as an economic regenerator, and the city’s many cultural assets have catalysed the current investment in the city. For the region to continue to develop, quality of life – of which culture is a key part – must be paramount. SH directly supports the musical infrastructure both regionally and nationally and the success of this project will impact significantly on organisations such as the City of Birmingham Symphony Orchestra who depend on SH as a resilient and stable home venue. SH also directly supports 70 FTE jobs and indirectly supports many more, both in partner organisations and through its wider impact on tourism, shopping, travel and the night time economy.


The vibrant cultural ecology in Birmingham is under threat, however, from seismic reductions in funding from Birmingham City Council. Historically, SH has been a significant beneficiary of Council funding but this has reduced from £3.4m in 2011 to £1.4m in 2017. The ultimate scale of the reduction in funding is not yet known, but the total cessation of funding is a possble scenario. In order to maintain and grow its significant contribution to the economic and cultural life of the region, SH now needs to evolve into an independent financial organisation, moving away from financial dependency on significant public subsidy. This project enables that transition, and provides a secure future for one of the region’s key cultural assets. Symphony Hall Extension project provides the means to confidently sustain and grow the existing positive impact of SH. The audience development opportunities and other outputs of the project will add significant value to the CBSO and other regional organisations that perform in SH. Public sector intervention is crucial for delivering this project. Many of the activities that PBL undertakes are unsustainable in a free market as they require the offer of free admission, subsidised tickets, accessible pricing or similar mechanisms. Although PBL presents numerous activities that are commercially successful, the overall business model is of a mixed economy where the known loss-making activities in the charity’s remit are supported by commercial ventures. As a charity, PBL is a not-for-profit organisation and any surplus generated by PBL is returned to the operation of the charity and to building a reserve. Although this project will deliver substantial new revenue, that will be offset by the further decline in funding from BCC. Even with the expanded operations that this project will deliver, the turnover and modest surplus that result from PBL’s activities are inadequate to secure or service the private capital that would be required to be invested in this project. 2 Business strategies The Symphony Hall Extension project delivers PBL’s 5-year Business Plan for Symphony Hall and Town Hall (which is also managed by PBL), over 2019/20 to 2023/24. The Business Plan is attached at Appendix 3. The project closely supports delivery of the GBSLEP Strategic Economic Plan (SEP). There has been no material change to its fit with the SEP since agreement to the SOC for the project. For Birmingham to achieve a key aim laid out in the SEP, becoming a major European City, the cultural offer of the city needs to continue to develop, creating a destination city with world-class entertainment. The Extension is a bold move with high impact both on SH’s long-term relevance and sustainability, adding to the value it will bring to Birmingham’s social and economic fabric. Making a key investment in this world-class music facility will contribute to Birmingham’s developing international gateway, as well as creating strong conditions for the growth, resilience and sustainability of the organisation. Cultural and social impacts will include sustaining one of the finest cultural assets in the region, broadening its audience and users, creating job training opportunities, and opening the building to the outside Square thus contributing to the regeneration and new buzz in the city centre. The project is a strong fit with other national, sub‐regional and local investment plans and strategies. Nationally, the creative industries – of which music is a part – are worth almost £10m per hour to the economy. Their growth continues to outpace that of the economy as a whole. This bid directly supports the 5 goals of the Arts Council of England’s 10 year strategy for England, Great Art and Culture for Everyone. These are:

Excellence is thriving and celebrated in the arts, museums and libraries.

Everyone has the opportunity to experience and to be inspired by the arts, museums and


libraries

The arts, museums and libraries are resilient and environmentally sustainable.

The leadership and workforce in the arts, museums and libraries are diverse and appropriately skilled.

Every child and young person has the opportunity to experience the richness of the arts, museums and libraries.

The project strongly supports key city and local strategies, developing the Midlands Engine through: The Big City Plan: the project supports objectives of this 20-year plan including Liveable city: provides high quality of living, creating places for people… within an accessible, safe, resilient and attractive environment. Authentic city: offers a unique and diverse experience through architecture, streets and spaces, arts and culture, businesses and neighbourhoods. Creative city: values and supports creativity and industry in all its forms. The project also supports The Big City Plan’s ambition to develop Westside (where SH is located) through a growing cultural offer in Westside (which includes Centenary Square) with the extension of existing facilities and the creation of new ones. Birmingham Culture Strategy: the project will support all of the five key themes of Culture on your Doorstep, A Creative Future, A Creative City, Our Cultural Capital and Our Cultural Future. The project also responds to the themes of the 2016 Birmingham Cultural Investment Enquiry which notes the decline in direct arts funding from Birmingham City Council, and the consequent need for cultural organisations to adapt in order to become more resilient. Birmingham Development Plan 2031: the project supports these key themes: For the Westside and Ladywood areas to be vibrant mixed-use areas that combine a visitor, cultural, commercial and residential offer and the support of proposals which reinforce and promote Birmingham’s role as a centre for tourism, culture and events and as a key destination for business tourism. Centenary Square Project: the project will support the ambition to transform Centenary Square into a welcoming space for people to “sit, relax, meet friends, and get a bite to eat”. The aim is to create “a usable and functional space, not just a beautiful place”. The project also supports the development of the Arena Central and Paradise Circus Enterprise zones by contributing to a “vibrant, class-leading development, set around a unique and innovative public realm”. 3 Other organisational strategies A key output of this project is opening up Symphony Hall to new and more diverse audiences. This supports PBL’s Diversity Strategy, which is attached as Appendix 7

8: THE CASE FOR CHANGE

A: Business Needs

A1: Investment Objectives

PBL’s executive team, led by Nick Reed, worked closely with BOP Consulting over the summer and autumn of 2016 to first define the investment objectives and to assess the initial list of options for delivery. Of particular note is the workshop in October 2016, when critical success factors for the project were identified by PBL’s executive team, alongside BOP. This initial phase of work was built on and updated in autumn 2018 by BOP Consulting in close communication with PBL’s CEO Nick Reed and Chief Operating Officer Nick Loveland.


PBL is a mature organisation that has 28 years of experience and business intelligence which it has used to test the achievability of the investment objectives. In every instance where a range of outcomes has been presented, PBL has taken the most cautious view. During development of the project, PBL has also consulted widely with its stakeholders and received universal support for the proposals. PBL has the support of Birmingham City Council and has secured £1million of prudential borrowing through Birmingham City Council. The NEC Group is PBL’s immediate landlord. It has also issued a formal letter of support (Appendix 8). The City of Birmingham Symphony Orchestra perform at Symphony Hall around 75 times each year and have expressed their full support for the project (Appendix 9) In terms of ‘customer’ involvement, BOP carried out a major audience survey in 2016, to inform the Feasibility Study. Audiences responded positively to ideas of enhanced foyer spaces, with 38% of respondents interested in free foyer concerts and 32% saying they would visit more often and stay longer if there were stronger catering and bar offers. PBL then engaged Achates Philanthropy to develop a Funding Feasibility Study, Fundraising Strategy and to assist in shaping the artistic programme that the extended facilities will enable. The process of developing the Funding Feasibility Study and Fundraising Strategy included consultation with our Board of Trustees, local cultural organisations and key statutory and private funding bodies for both the capital scheme and ongoing revenue for SH. The response to these consultations was positive. Drawing on all this work, the following three SMART Investment Objectives are proposed for the project. Objective 1: To deliver 1,441m2 new and refurbished space for Symphony Hall The new space will transform SH’s presence and the sense of arrival from Centenary Square. It will provide expanded foyers, a new daytime cafe, improved bars, dining experiences, a relocated box office, plus flexible learning, private event and performance spaces. Objective 2: To increase audience numbers to 515,743 per annum by 2023/24 The growth will be achieved through a combination of increased loyalty from existing audiences; tapping into Birmingham’s leisure and business tourism market; and embracing a new, young and diverse audience that better reflects the diversity of the GBSLEP region’s population. Symphony Hall currently has the capacity to accommodate the growth in audiences to existing events, and consultations have demonstrated the demand for the proposed new programme making this objective achievable. The proposed incremental growth in audiences demonstrated in the table below has been based on comparator research undertaken by BOP consulting and is consequently realistic.

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

SH 2019/20 2020/21 2021/22 2022/23 2023/24

2024/25 KPIs Nos Nos Nos Nos Nos Nos

Events 432 480 552 604 655 655

Audiences 419,798 450,026 485,333 498,679 515,743 515,743

Programme

Artistic Programming 122 114 109 109 106 106

Commercial Hires 20 20 20 20 20 20

Commercial Programming 179 187 192 192 195 195

Learning & Participation 30 50 70 70 70 70

Jazzlines 69 69 69 69 69 69

Tours 12 12 12 12 12 12

Foyer Events 0 28 80 132 183 183


New audiences will be engaged by using the new spaces for learning, community programming and free or low-priced performances. Foyers that are currently closed during the day will expand and open up. PBL will introduce foyer programming that will reflect the diversity of the city. Objective 3: To build financial resilience by generating £1.5m more income per year by 2023/24 This will be achieved through growth in the audience; more attractive spaces for conferences and private hires; and expanded relationships with individual and corporate givers. In particular, bigger bars will support a growth in spend-per-head. The growth in food and beverage revenue outlined in the table below is realistic based on current experience and achievable due to the increased bar space and the ability to offer enhanced VIP packages in the new hospitality spaces.

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

2019/20 2020/21 2021/22 2022/23 2023/24

2024/25

Summary I&E £000 £000 £000 £000 £000 £000

BCC Core Grant 980 960 941 922 904 904

Event income (net) 1,702 1,725 1,712 1,675 1,668 1,668

F&B Income (net) 353 457 608 636 655 655

Total Income 10,912 11,510 12,140 12,243 12,473 12473 Note that event income initially grows in Years 1 and 2 due to the increase in total event numbers. In Years 3-6 event income declines slightly due to the significant increase in Foyer Events and Learning and Participation events which are typically cost negative, and not fully offset by the increase in commercial events over the same period. The event breakdown is detailed in the table in Objective 2 above. The new kitchens will allow the introduction of a daytime café bar, enhanced event catering and an evening food offer. These will collectively make a net contribution of £81,046 per annum in the first full year of operation, growing to £88,022 per annum by 2023/24. The biggest component of this is the evening food offer which has been modelled on 50 diners spending £10 per head on an average of 281 events each year. These figures have been cautiously forecast using competitor analysis prepared by Pat McDonald consultancy. This matrix explains briefly how the Investment Objectives deliver the GBSLEP’s particular concerns:

Investment Objective Economy / reduce cost

Efficiency / improve throughput

Effectiveness / improve quality

1 Deliver new and refurbished space

Yes – improved energy efficiency

Yes – new design enables more users

Yes – greatly improved quality of experience

2 Increase annual audience numbers

Yes – cost per head to PBL reduces

- -

3 Build financial resilience

Yes – removes need for public revenue funding

in perpetuity

- -

A2: Existing Arrangements – TRANSPORT SCHEMES ONLY

A2: Existing Arrangements – SKILLS CAPITAL ONLY

A3: Project scope requirements

This section describes the potential business scope and key service requirements for the project in relation to the above business needs.


The options within these ranges are considered within the economic case.

Table 3 Business scope and key service requirements

Minimum Intermediate Maximum

Potential business scope

Presence and sense of arrival Visitor experience Ancillary facilities



Key service requirements

Improved approach and entrance for visitors – could be from various directions Improved foyers and catering offer New private event spaces

Transformed external views and approach and entrance from the regenerated Centenary Square Expanded and more impressive foyers with new box office New cafe, new bars New private event spaces and learning spaces

Transformed external views and approach and entrance from the regenerated Centenary Square Expanded and more impressive foyers with new box office New cafe, new bars, restaurant dining New private event, learning and performance spaces

S

B1: Main Benefits Criteria – TRANSPORT SCHEMES ONLY

B2: Main Benefits Criteria – SKILLS CAPITAL ONLY

B3 Local Employment & Social Value

Opening up jobs associated with funding to local unemployed residents

We are planning to roll out a number of apprentices in a number of business units. We will work together with Creative Partnerships to develop these. They are a local employment agency, specialising in apprenticeships. In 2019 we will be embarking on a cycle of work experience initiatives in partnership with the Princes Trust. These are largely mentoring programmes for young people and we will provide the work experience element. We are keen to draw from our local community and from groups who are currently under represented within our organisation and the Arts more generally. Through this partnership we hope to develop a specific volunteering programme which provides opportunities to volunteer on community projects embracing music, photography, recording and editing.

Using social value act

The Social Value Act (February 2012) requires all public bodies to consider how the services they commission or procure might improve the economic, social and environmental well-being of the area.


This project is fundamentally aligned with the principles of the Social Value Act in the outputs that it will deliver. PBL is a registered charity and its charitable objectives are inherently of benefit to the wider community. PBL has consulted widely on the need for the project, it will communicate frequently with its audiences during construction and it will celebrate completion with events created from within the community. PBL is procuring the contractor for this project using the Pagabo framework. Pagabo formally recognises the Social Value Act in its Social Value Policy: “Pagabo aims to embed Social Impact and Social Value through every procurement that we support our clients with and guide suppliers of how to deliver more Social Value through their contracts. The objectives of the policy are to set out our ‘offer’ to our clients as well as provide Social Value guidance to suppliers. To do this, we are committed to maximising Social Value through all procurement frameworks and make sure all organisations are committed to delivering Social Impact” A copy of this policy is attached as Appendix 10

C: Main Risks

The attached Risk Registers set out in detail the main business and service risks associated with this project, together with their counter measures. Appendix 5: Capital Project Risk Register Appendix 6: Commercial Risk Register

D: Constraints

Performances Birmingham Limited must continue to trade during the build period – as such, the auditorium will remain “open for business” throughout the 13 months of construction. In addition, interfaces with the existing building (ICC), and the works taking place directly outside the building involving Centenary Square and the development of the new Metro line, are key to the success of the project. These factors create the following constraints on the construction work:

The need to minimise additional loading on the existing structure for support and acoustic reasons.

To take account of the existing services below ground and the relationship to the Centenary Square works.

To not unduly load the existing railway tunnel that runs under ICC.

To not compromise the acoustic separation between the foyers and the concert hall.

The delivery of the project will require careful consideration of the interface between the existing building and its ongoing use and the developing setting of Centenary Square.

To identify a clear demarcation between the proposed new works and re-fit works to allow Symphony Hall to continue to operate during construction.

To determine an appropriate procedure for the removal of the existing front face of the Symphony Hall.

To identify a clear working zone for the construction of the new extension.

To demarcate the site set-up arrangement for the contractor and site materials delivery.


In addition to these factors surrounding the build, there are a number of on-going constraints to the operation of the new space.

The fact that this project is part of an existing building and not a new build means that there are inevitable constraints on the sustainability opportunities available. However, PBL has worked with Max Fordham to create a sustainability policy and action plan for PBL in the wider context, and the principles of this policy will inform this project to ensure that those sustainability outcomes that are achievable are rigorously pursued. These are attached: Appendix 11: Sustainability Policy Appendix 12: Sustainability Action Plan

Restrictions placed upon the operation by the lease between NEC and BCC (on behalf of PBL) means that discussions will need to take place and an agreement be brokered with regard to the catering operation. The outcome of these may impact on the profitability of the offer, though at time of writing it is hoped that a mutual compromise can be found.

E: Dependencies

The project is subject to the following dependencies that will be carefully monitored and managed throughout the lifespan of the scheme. There are key dependencies within the construction project. The build for “Making an Entrance” will physically take place between the conclusion of the development of Centenary Square, and the continuation of the development of the cross-Birmingham Metro line on Broad Street. Clearly ongoing collaboration with both developers of these projects is key, as is also their knowledge of many of the services which are buried under the footprint of the new extension to the building. Negotiations with Severn Trent, Network Rail and Engie (CHP scheme) will be crucial to a smooth construction process. In terms of building permissions, there is a key link between Birmingham City Council, as the freeholder of the building, the NEC Group, as the leaseholder, and PBL. For funding purposes, an extension to the existing lease on Symphony Hall is required and so discussions between the three parties must be concluded swiftly and effectively. BCC has provided a letter of comfort to the effect that these negotiations will be concluded by April 2019. This letter is attached as Appendix 13


9: THE ECONOMIC CASE

A: Introduction and Critical Success Factors

In accordance with the Capital Investment Manual and requirements of HM Treasury’s Green Book (A Guide to Investment Appraisal in the Public Sector), this section of the FBC documents the procurement process and provides evidence to show that we have selected the most economically advantageous offer, which best meets our service needs and optimises value for money. BOP appraised the four options against three groups of criteria, comprising 12 criteria in all. These criteria were defined in consultation based on the original brief, refined through analysis of market needs and confirmed with PBL’s executive team. Critical success factors for the project were identified by PBL’s executive team, alongside BOP consultants, and focus on three key areas of Realisation, Resilience and Profile. Realisation success factors include:

Ability to meet the capital target to facilitate all necessary build and fit-out costs;

Securing agreements with BCC and ICC, as well as necessary planning permissions for the build.

Resilience success factors include:

Projections for increased visitor and attendance numbers are met or exceeded, allowing SH to generate the projected additional income;

Increased income generation through more diverse commercial activities, expanded audiences and more attractive spaces for conferences and private hires;

Increased income generation through expanded relationships with individual and corporate givers.

Profile success factors include:

SH has improved visibility and distinctiveness, contributing more to surrounding city life;

There are more and more diverse opportunities to engage with audiences.

B: The Long-listed Options

The long list is:

Option A: Do nothing – No investment and no additional benefits.

Option B: Broad Street extension - The idea originated some years ago when the ICC came to

Symphony Hall to propose moving the box office to the corner of the building between Centenary

Square and Broad Street, where there are two small fire doors. In exchange, ICC wanted to have the

space where the box office is currently located, and they offered to pay for this. At the time, the ICC

eventually pulled out, but the option could be revisited.

Option C: Canal Side extension - This is a more recent idea, though developed prior to the

emergence of any redevelopment plans of Centenary Square itself. This option would: a) building a

new wall on Broad Street towards the back of Symphony Hall and over an existing old pub,

effectively incorporating this to be used as a new venue (Jazz Club); then b) building above and

behind the older building in the air space above the loading bays, adding a restaurant and hospitality

spaces in the upstairs extension. Symphony Hall main entrance would be relocated to Canal Side

creating a sense of destination by bringing several public areas together.

Option D: Centenary Square extension - The option is about dismantling of the current glass

façade of Symphony Hall facing Centenary Square, expanding out the foyer (Level 03) and floor


spaces on all levels above (Levels 04, 05, 05A) by three metres, and creating a new open glass

façade and new entrance on Centenary Square. There are various sub-options to this option:

Centenary Square extension: Option D1 – £12.5m investment to open Symphony Hall onto

Centenary Square through the creation of a new entrance and foyer/café on the ground-floor

Centenary Square extension: Option D2 – £13.2m investment to create the amenities of option 2,

plus a substantial new performance space which facilitates a much expanded programme by

allowing an independence of operation that was not possible under option 2

Centenary Square extension: Option D3 - During design development PBL considered an option

that added an additional floor to the building, but increased project cost by £1.1m. This proposal was

rejected initially on cost and this decision was vindicated by a subsequent re-modelling of the outputs

available from option D2 which work the building harder, giving better value for money.

Option A: Do Nothing This option would lead to severe threats to financial sustainability and reputation, and would result in changes to programming or management which would be likely to have a profound effect on the culture and type of venue that Symphony Hall is. Option B: Broad Street Extension This option is suboptimal as although it would help create an improved sense of destination by uniting Symphony Hall more closely with its box-office, and could potentially be paid (if only partially) by the ICC, it is an expensive project that does not create any strategic advantage with regards to the Profile and Resilience Criteria. Option C: Canal-Side Extension The option enables Symphony Hall to maximise the Resilience Criteria’s score and to create a distinctive sense of destination with a whole new wing able to draw diverse engagement with existing and new audiences. There is a sense of missed opportunity and departure from Symphony Hall’s existing profile however, as the option fails to make use of the regeneration of Centenary Square and keeps the building closed in the main Foyers where its core mission is being delivered. Building costs and increased delivery constraints also weighed against the option. Option D: Centenary Square Extension This is the only option which truly maximises benefits for Symphony Hall. As with option C, the extension creates significant opportunities to develop income generation while making a powerful statement in Birmingham’s city centre and enabling Symphony Hall to expand its profile and contribution to the region’s dynamism. However, this option is deemed easier to deliver in terms of authorisations and negotiations with the ICC and BCC, without increasing the number of parties involved to realise the project. Building costs are also likely slightly lower given the slightly lower complexity and size of the scheme, which in current competitive context for funding is a non-negligible advantage.

C: Short-listed Options

With the expectation of the status quo option, all short-listed options relate to option D within the long-listed options. They are short-listed as:


option 2 – Investment to open Symphony Hall onto Centenary Square through the creation of a new

entrance and foyer/café on the ground-floor

option 3 – Investment to create the amenities of option 2, plus a substantial new performance space

which facilitates a much-expanded programme by allowing an independence of operation that was

not possible under option 2


D: The Procurement Process (Not for Transport Schemes)

Multi-disciplinary Design team procurement process The design team has been procured using the “My Tenders” OJEU compliant portal The OJEU notice for this appointment is attached as Appendix 19 Expressions of interest 85 PQQ submissions 22 Invitations to Tender 6 Companies who tendered Allies and Morrison Page/Park Architects Carmody Groarke Aedas Design Team Bennetts Associates Fielden Clegg Bradley Studios Award Criteria The contract was awarded on the basis of the most economically advantageous tender. An overall 60:40 quality/price weighting was applied to the assessment of tenders with the quality weighting of 60% being further broken down as shown below (see percentages in brackets). ‘Quality’ in this instance was assessed based upon the following: • Experience of Cultural sector projects of similar scope and scale to that proposed by PBL [20%] • Quality of team and individuals. Their qualifications and experience together with the extent of their involvement in the project [15%] • Experience of working together as a team on previous projects and proposals for co-ordinating the work of the design team including the integration of specialist design consultants and sub-contractors with a design responsibility [15%] • Appreciation of the challenges of working within a high profile public building while maintaining operational continuity during construction works and proposals for minimising the required closure period [20%] • Capacity and ability to resource the project and comply with or improve upon programme [10%] • Understanding and response to the challenges and opportunities within the Brief [20%] The process concluded in December 2017 with the appointment of the following: Architect, Lead Design consultant and Principal Designer – Page\Park Architects Structural Engineer – Arup* Services Engineer – Max Fordham & Partners* * sub-consultants to Page Park Architects Cost Consultant/Quantity Surveyor Procurement The OJEU notice for this appointment is attached as Appendix 20 Expressions of interest 34 PQQ submissions 17 Invitations to Tender 5


Companies who tendered: Gardner and Theobald LLP Rider Levett Bucknall Ltd AECOM Limited Faithful and Gould PMP Consultants The contract was awarded on the basis of the most economically advantageous tender. An overall 60:40 quality/price weighting will be applied to the assessment of tenders with the quality weighting of 60% being further broken down as shown below (see percentages in brackets). ‘Quality’ in this instance was assessed based upon the following: • Experience of Cultural sector projects of similar scope and scale to that proposed by PBL [20%] • Quality of team and individuals. Their qualifications and experience together with the extent of their involvement in the project [15%] • Approach to working with the separately appointed multi-disciplinary team to develop a cost plan and contribute to cost effective design and procurement [20%] • Appreciation of the cost sensitive issues involved in working within a high profile public building while maintaining operational continuity during construction works [10%] • Capability in value and risk management techniques [15%] • Understanding and response to the challenges within the Brief [20%] This process resulted in the appointment of PMP Consultants as Cost Consultant/Quantity Surveyor in January 2018. Other consultants Further specialist design inputs have been procured via a competitive process with the following appointed as sub-consultants to Page\Park. Fire Engineering (JGA Consulting) Acoustics (Hoare Lea) Certain specialists have been appointed direct by PBL via a competitive process such as a catering specialist (Patrick McDonald) and an Access consultant (Jane Toplis). An Employers Agent will be competitively procured ahead of the construction stage. Mark Holden (Invigour) is acting as Independent Client Adviser to PBL having been procured via competitive tender. Construction contractor procurement After careful consideration the main contractor for the project will be procured via an established OJEU compliant framework. Use of a framework offers considerable programme advantage; competitively tendered rates; performance management and incentivises the contractor by way of repeat business. A number of available frameworks were considered including Constructing West Midlands (CWM) and SCAPE. However, following due diligence, the Pagabo framework has been selected as the best fit with our needs and preferred arrangement. Pagabo offers the largest pool of suitable contractors and is flexible enough to meet PBL’s specific requirements including novation of the appointed design team and


a two stage tender process. A two stage tender is proposed with a contractor being selected on the basis of a first stage tender based on fixed preliminaries, overheads and profit which are likely to account for 20-25% of the overall construction value. A schedule of rates for selected work packages will also form part of the stage 1 tender. At Stage 2 the selected contractor will work alongside the design team during RIBA Stage 4 under a pre-construction services agreement. The contract sum will be based upon the agreed schedule of rates where applicable or upon competitively tendered sub-contract work packages. This will be a completely transparent and open book process ensuring that the full value of the construction works is subject to competition in the marketplace. In addition to the financial criteria a key aspect will be the quality of the contractor’s personnel and contribution to the buildability, logistics and phasing of works given PBL intends to remain operational to the fullest extent possible. This is the primary reason for adopting a two stage approach and is considered vital to the successful delivery of the project. Having considered a traditional approach (design team remaining in the employ of PBL throughout) versus a design and build arrangement the latter has been selected as the preferred option. There is a considerable amount of sub-contract design which would need to be covered by a contractor’s design portion supplement in any event and novating the design team to complete any unresolved design detailing on behalf of the contractor will reduce the risk associated with information flow during the construction phase. The potential for compromise on quality will be minimised by novating the design team at an advanced stage of the design process. Consideration will also be given to the appointment of a Clerk of Works to monitor quality in support of the Employers Agent.

E: Economic Appraisal

This section provides a detailed overview of the costs and benefits associated with the preferred option.

E1: Estimating Benefits

We have applied the same economic impact methodology to each of the short-listed options:


option 2 – Investment to open Symphony Hall onto Centenary Square through the creation of a new

entrance and foyer/café on the ground-floor

option 3 – Investment to create the amenities of option 2, plus a substantial new performance space

which facilitates a much-expanded programme by allowing an independence of operation that was

not possible under option 2

This methodology is based on the framework illustrated below:


To populate this economic model, BOP gathered data from two sources:

— PBL’s financial accounts (wages and suppliers for Symphony Hall’s main and catering activities): to

determine the total spend for the organisation’s operations.

— A survey of current audiences: among others, the survey yielded information on the proportion of

attendees visiting versus local audiences; their average spend; and the purpose of their visits –

information required for the economic impact calculation.

Across the short-listed options, we varied:

— Annual size of audiences, in line with the latest estimates of these from PBL

— Wage and supplier spending by PBL, with these being scaled in line with estimated audiences

under each of the options

Our economic analysis took account of leakage and additionality. Leakage outside of the local economy was addressed by only asking about audience spending in GBSLEP and analysing the location of Symphony Hall spending. We also estimated what proportion of expenditure is additional and can be attributed to Symphony Hall specifically. To do so, the gross economic output figures were adjusted to take account of two additionality effects: displacement and substitution. Additionality was assessed using information on audience members’ alternative plans and on their origins, as per the figure below:

I would have stayed at home or gone to work

I would have done something else in Birmingham

I would have done something else elsewhere in the West Midlands

I would have done something else elsewhere in the UK

GBSLEP Not additional Not additional Additional Additional

Elsewhere in the West Midlands

Additional Not additional Additional Additional

Elsewhere in the UK


Rest of Europe Additional Not additional Additional Additional

Other International


Once adjusted for additionality, the total was then ‘multiplied up’ to account for the secondary or knock-on effects of spending in the local economy (e.g. recipients of spending caused by Symphony Hall such as local suppliers and shops re-spending that income within the local area, e.g. on their own suppliers). This in turn creates further demand for goods and services.

It is assumed that the following does not vary between the options:

— The composition of the audience (i.e. what proportion are local and non-local)

— The proportion of audience spending that is additional

The key driver of different economic outcomes between the options is the size of audience that they are expected to sustain.

PBL has undertaken detailed work on how audiences could be expected to evolve under each of the options. Under option 3, a steady growth in audience numbers over the five years following the capital work is anticipated. This growth in audience numbers is expected to build to an annual audience of 515,743 in the fifth year after these capital works of £13.2m and then stabilise at this level in subsequent years. In contrast, the annual audience anticipated under option 2, following the capital works of £12.5m, is 432,906. PBL considers this audience increase under option 3 justified because of the significant development in


the scope of facilities that option 3 delivers compared to options 1 and 2. Option 2 provides for a development of the building that involves an extension of all four floor plates with café bar and informal performance on level 3, hospitality on level 4, public areas on level 5 and learning rooms on level 5a. The significant change in option 3 is the partial merging of levels 4 and 5 to create a new double height venue space without compromising the general bar areas. Hospitality and learning are now accommodated on Level 5a (the top floor) which has allowed the creation of more vertical space and a dramatic new interior roofline. The café bar remains on Level 3. There are significant advantages to option 3 as follows:

Moving informal performance to the new venue space on Level 4/5 allows a much more ambitious programme of activity in a space that is not competing with the café bar / box office function on Level 3. Independence of operation and sound containment are radically enhanced by splitting these functions.

The new venue space is considerably bigger and introduces the prospect of running foyer music both as standalone daytime events, to complement evening performances in the main hall or even independently of evening performances in the main hall.

Presenting early evening pre-concert performances in the new venue space will support the new food and drink offer, giving a reason to arrive early. The kitchen layout is configured to offer service at L3 and L4.

Moving corporate hospitality to L5a mobilises height and view of Centenary Square as a significant asset, making this a more saleable space for both corporate hospitality and individual VIP packages.

The availability of the corporate hospitality spaces during the day (and the addition of additional storage) opens these spaces up to daytime learning use, potentially in combination with the performance space on L4, allowing more ambitious L&P outputs.

All of these factors combine to significantly increase the outputs of option 3 compared to the other options.

Table 4 Main benefits

Type Direct to Organisation(s) Indirect to Organisation(s)

Quantitative (or quantifiable)

Increased audiences

Increased sales of food and drink within Symphony Hall

Increased pool of individual and corporate givers to Symphony Hall

Increased bookings for conferences and private hires

Increased energy efficiency and reduced carbon emissions by Symphony Hall

Increased visitors to Birmingham – spending money not just at the Symphony Hall but also in the surrounding area

Expansion of Symphony Hall’s contribution to local employment

Increased spend by Symphony Hall on local suppliers

Cash releasing

Increased box office income

Increased catering income

Increased income through expanded relationships with individual and corporate givers

Increased income from

Increased spend by visitors to Birmingham in shops, hotels, restaurants and bars

Increased spend by Symphony Hall on wages and suppliers, rippling through the local economy


more attractive spaces for conferences and private hires

Improved efficiency of building and reduced energy consumption costs

Non-cash releasing

As below under qualitative Increased quality of life in Birmingham and civic pride in its cultural offer

Qualitative (or non-quantifiable)

Improved visibility and distinctiveness for Symphony Hall

More and more diverse opportunities to engage with audiences and users

More accessible building that is more welcoming to younger, newer, diverse audiences

Helps increase Symphony Hall’s education programme with more activities for children, young people and adults, both free and charged

Contributes to the animation of Centenary Square

Extends Birmingham’s reputation as a cultural city

E2: Estimating Costs

Option 1: No costs are incurred under this do-nothing option.

Option 2: At the time of the AECOM Independent Appraisal, GBS LEP Outline Business Case Change Request in August 2018, the costs associated with this option were reported as £12.5m of capital works.

Option 3: As the preferred option, most detailed work has been undertaken to assess the costs of this option. Following additional design work, the current preferred option is now estimated at a capital works cost of £13.2m. Alongside this Full Business Case, PBL are submitting work from the cost consultants PMP that presents the latest estimation of costs in respect of this option. Appendix 21: Elemental Cost Plan

E3: Net Present Cost Findings

The detailed economic appraisals for each option are attached as Appendix 14 to this Full Business Case. The following table summarises the key results of the economic appraisals for each option.

Table 5 Key results of economic appraisals1

Option 1 - Do nothing/do minimum/status quo

Undiscounted (£) Net Present Cost (Value) (£)

Capital £0 £0

Total costs £0 £0

Less cash releasing benefits (Net Present Value of

£411.4m £267.2m

1 NPVs at 3.5% interest rate. NPVs and undiscounted values presented over 30 years.


Economic Impact over 30 years)

Total -£411.m -£267.2m


Capital

£12.5m £12.5m



£673.0m £412.6m

Total -£660.5m -£400.1m


Capital

£13.2m £13.2m



£835.8m £509.2m

Total -£822.6m -£496.0m

S

E4: Option Ranking

The results are summarised in the table below.

Table 6 Summary of results

Option NPC (£s)

Cash benefit

Ranking

1 Do nothing/do minimum/status quo

-£267.2m £411.4m 3

2 Investment to open Symphony Hall onto Centenary Square through the creation of a new entrance and foyer/café on the ground-floor

-£400.1m £673.0m 2

3 Investment to create the amenities of option 2, plus a substantial new performance space which facilitates a much-expanded programme by allowing an independence of operation that was not possible under option 2

-£496.0m £835.8m 1


O

E5: Option Appraisal Conclusions

The key findings are as follows: Option 1 – do nothing/do minimum/status quo This option ranks third. While it requires least capital investment, it provides less positive economic impact than the other options. Option 2 This option ranks second. It requires less capital investment than option 3 but generates less positive economic than option 3. Option 3 This option ranks first. While it requires the largest amount of capital investment, due to the increased audiences that it is anticipated would be attracted to Symphony Hall under this option, it generates a larger positive economic impact than the other options. This positive economic impact is more than large enough, based upon the analysis presented above, to justify its increased capital cost.

F: Qualitative Benefits Appraisal

This section examines how the scheme addresses the rest of the appraisal summary table, social/environmental etc (possibly against other objectives).

F1: Methodology

A Benefits Workshop was held at 2pm on 3rd December 2018. The attendees were:

Nick Reed, CEO, Performances Birmingham Limited

Nick Loveland, Chief Operating Officer, Performances Birmingham Limited

Alex Homfray, Associate Director, BOP Consulting

Jonathan Todd, Chief Economist, BOP Consulting The workshop reviewed an outline Benefits Register prepared by BOP. In accordance with Green Book procedures, the participants appraised the qualitative benefits of each option. They did so by:

Identifying the benefits criteria relating to each of the investment objectives;

Weighting the relative importance (in %s) of each benefit criterion in relation to each investment objective;

Scoring each of the short-listed options against the benefit criteria on a scale of 0 to 9; and

Deriving a weighted benefits score for each option. The 2018 workshop built on a significant amount of previous work by PBL, BOP and Achates over 2016 and 2017, including consultation with key stakeholders and customers.

F2: Qualitative Benefits Criteria

The qualitative benefits were identified as follows.


Type Direct to Organisation(s) Indirect to Organisation(s)

Qualitative (or non-quantifiable)

Improved visibility and distinctiveness for Symphony Hall More and more diverse opportunities to engage with audiences and users More accessible building that is more welcoming to younger, newer, diverse audiences Helps increase Symphony Hall’s learning programme with more activities for children, young people and adults, both free and charged

Contributes to the animation of Centenary Square Extends Birmingham’s reputation as a cultural city

F3: Qualitative Benefits Scoring

The relative importance of each criterion was weighted in relation to the investment objectives as follows.

Investment Objectives

Qualitative Benefits Weight

Investment Objective 1: To deliver 1,441m2 new and refurbished space for Symphony Hall

Improved visibility and distinctiveness for Symphony Hall Contributes to the animation of Centenary Square Extends Birmingham’s reputation as a cultural city

33.3%

Investment Objective 2: To increase audience numbers to 669,000 by 2023/24

More accessible building that is more welcoming to younger, newer, diverse audiences Helps increase SH’s learning programme with more activities for children, young people and adults, both free and charged Provides more and more diverse opportunities to engage with audiences and users

33.3%

Investment Objective 3: To build financial resilience by generating £1.5m more income per year by 2023/24

N/a – covered by cash releasing benefits 33.3%

F4: Analysis of Key Results

The results of the benefits appraisal are:

Benefits appraisal table

2

2 Weighted scores rounded to one decimal place


Benefit Criteria and Weight

Option 1

Option 2 Option 3

Raw (R) and weighted (W)scores

R W R W R W

Investment Objective 1: To deliver 1,441m2 new and refurbished space for Symphony Hall

0 0 8 2.6 10 3.3

Investment Objective 2: To increase audience numbers to 669,000 by 2023/24

3 1 6 2 8 2.6

Investment Objective 3: To build financial resilience by generating £1.5m more income per year by 2023/24

3 1 6 2 8 2.6

Total 6 2 20 6.6 26 8.6

Rank 3 2 1

The key considerations that influenced the scores achieved by the various options were as follows: Option 1 – do minimum This option ranks third. Key considerations influencing its score are: this option delivers minimal improvements to the building so it is able to realise minimum benefits against the stated investment objectives for the project.

Option 2 – open Symphony Hall onto Centenary Square through a new entrance and ground floor foyer/café This option ranks second. Key considerations influencing its score are: this option delivers greatly increased new space, audiences and income compared to option 1.

Option 3 – investment to create the amenities of option 2, plus an enhanced frontage onto Centenary Square, plus enhanced learning, event and performance spaces which facilitate a much-expanded programme This option ranks first. Key considerations influencing its score are: this option delivers further increased new space over and above option 2, with a consequent further uplift of audiences and income compared to option 2.

G: Risk Appraisal – Un-quantifiables

A workshop was held at 4pm on 3rd December 2018 to evaluate the risks associated with each option. The attendees were: — Nick Reed, CEO, Performances Birmingham Limited — Nick Loveland, Chief Operating Officer, Performances Birmingham Limited — Alex Homfray, Associate Director, BOP Consulting — Jonathan Todd, Chief Economist, BOP Consulting This workshop built on multiple earlier risk workshops, starting in 2016 at feasibility stage, and culminating in the completion of the two detailed Risk Registers for the preferred option in July 2018.


The Risk Registers are appended to this business case. They comprise a Capital Project Risk Register (identifies and assesses 57 risks) and a Commercial Risk Register (10 risks).

G1: Methodology

Risk appraisal has been undertaken and involved the following distinct elements:

Identifying all the possible business and service risks associated with each option;

Assessing the impact and probability for each option; and

Calculating a risk score.

G2: Risk Scores

For the purposes of differentiating between options in the analysis below, each option was assessed within a risk workshop against each broad theme within the Risk Registers. These themes are: Design risks, i.e. considerations around achieving the best possible design Site risks, i.e. considerations around accessing, securing and delivering works on site Funding risks, i.e. considerations around raising the necessary capital funds Commercial risks, i.e. the possible impact of the project on operations and stakeholder relationships. The workshop on 3rd December 2018 assigned the risk scores shown in the following table on the basis of participants’ judgment and assessment of previous procurements. These scores are aligned as far as possible with the detailed assessment of individual risks in the two Risk Registers. The range of scales used to quantify risk was as follows:

Low equals 2;

Medium equals 3; and

High equals 5.

Table 7 Summary of the risk appraisal results

Summary of Risk Appraisal Results (Pr = probability)

Risk category no.

Impact Option 1

Option 2

Option 3

Pr. Tot. Pr. Tot. Pr. Tot.

Design risks 3 2 6 3 9 2 6 Site risks 3 2 6 3 9 3 9 Funding risks 5 2 10 3 10 3 10 Commercial risks

3 2 6 3 9 3 9

Total 28 37 34 Rank 1 3 2

The key considerations that influenced the scores achieved by the various options were as follows:

Option 1 – do nothing/ do minimum/ status quo

This option ranks first.


It provides limited risk as there are much more limited capital works under this option.

Option 2 – reference project (less ambitious)

This option ranks third. It is also considered to represent an acceptable and manageable level of risk. The scores are similar to those of Option 3 as this scheme is very similar – only, this option is considered to have higher risk of not achieving an optimal design, due to its less imaginative treatment of the Centenary Square frontage and more modest learning / event / performance spaces provided.

Option 3 – reference project (more ambitious)

This option ranks second. It is considered to represent an acceptable and manageable level of risk. See the detailed Risk Registers for assessment of each individual risk and the mitigation tactics.

H: The Preferred Option

The results of investment appraisal are as follows:

Table 8 Summary of Overall Results

Evaluation Results Option 1 Option 2 Option 3

Economic appraisals 3 2 1

Benefits appraisal 3 2 1

Risk appraisal 1 3 2

Overall Ranking 3 2 1

Conclusion Option 3 is the preferred option because it generates the greatest positive economic impact and other benefits, while involving risks that PBL has processes in place to manage. While option 1 entails the least risk, it generates less positive economic impact and other benefits than either of the other two options.

I:Sensitivity Analysis

We undertook the following sensitivity tests:

increased costs (20%),

reduced revenues (20%),

and combined effects of the increased costs and reduced revenues.

If the capital costs associated with option 2 were to increase by 20%, its cost would be £14.0m. The same increase in option 3 would generate a cost of £15.8m. If the annual revenues for the GBSLEP economy, under option 2, were to reduce by 20%, the value of these benefits over 30 years at a 3.5% interest rate in NPV terms would be £330.1m. In the same terms, the same reduction in annual revenues to option 3, would reduce its NPV value to £407.4m. Given a 20% increase in costs and 20% reduction in revenues, the ratio of NPV benefits to capital costs reduces under both option 2 (23.5 equals £330.1m divided by £14.0m) and option 3 (25.7 equals £407.4m divided by £15.8m) – but the ratio remains higher under option 3.

10: PREFERRED OPTION

The preferred option remains option 3, because the ratio of benefits to costs is more favourable under


option 3 than option 2 in our sensitivity analysis.


11: THE COMMERCIAL CONSIDERATIONS

A: Introduction and Required Services

PBL will start the procurement process for its main contractor in November2018, completing procurement by January 2019. See section G overleaf for an explanation of the process. A copy of the intended contract is attached in Appendix 25

B: Potential for Risk Transfer

The general principle is to ensure that risks should be passed to ‘the party best able to manage them’, subject to value for money (VFM). We have agreed that we will apportion service risks in the design, build and operational phases as illustrated below.

Table 9 Risk transfer matrix

Risk Category Potential allocation

Public Private Shared

1. Design risk

2. Construction and development risk

3. Transition and implementation risk

4. Availability and performance risk

5. Operating risk

6. Variability of revenue risks

7. Termination risks

8. Technology and obsolescence risks

9. Control risks

10. Residual value risks

11. Financing risks

12. Legislative risks

13. Other project risks A

C: Agreed charging mechanisms

The payment will be governed by a JCT contract and based on monthly valuations of work completed on site with a 3% retention half of which is released on Practical Completion and the other half on completion of making good, defects. The main risks are ensuring funding is in place to maintain sufficient cashflow without the need for over-reliance on PBL Charity reserves. This risk will be mitigated through a series of measures:

1. Trust and Foundation Fundraising strategy for T&Fs front loaded to 2018 and 2019


2. Application for an in-year prudential borrowing facility during 2020

3. Application to LEP for monthly claims, and if necessary submit a claim as soon as the relevant

invoice is paid, thus minimising its cashflow gap

4. Application for bi-monthly claims from ACE

5. Maintaining unrestricted reserves throughout the project to underwrite any temporary cash

deficit

Supporting arrangement for payments will be delivered through delegated levels of authority to spend delivered through a web-based Purchase Ordering process. Payments to suppliers for products and services will be in accordance with agreed terms and approved for payment by the project budget holder (being the COO). Given that payment terms may vary (for example stage payments; fees in advance; payment on goods received or 30 days) the payment for Making an Entrance will be maintained through a weekly payment schedule. Faster payment methods will also be accommodated as necessary. Monthly reporting of expenditure to date against budget will be produced and interrogated by the Director of Finance.

D: Agreed Contract Lengths

Agreed contact length can only be the anticipated contract period, which is 52 weeks, with 12 months

defects correction period.

E: Key contractual clauses

A sample of the proposed JCT form of contract is attached as Appendix 25. This contract will be issued with the schedule of amendments attached as Appendix 26 In terms of cost overruns the Contractor takes responsibility for delivering the works as specified in the contract documents for the agreed contract sum. PBL’s exposure to cost overrun risk relates to any changes that may be required and instructed formally by PBL and to the standard clauses (e.g Relevant Events) within the contract that give rise to a financial adjustment. By adopting the JCT Design and Build contract the risk of delay and expense due to finalising design details for construction on site is transferred to the Contractor. The contract will include liquidated and ascertained damages of £25,000 per week in the event of delay by the Contractor.

F: Personnel implications (including TUPE)

TUPE – Transfer of Undertakings (Protection of Employment) Regulations 1981 will not apply to this investment as outlined above.

G: Procurement strategy and implementation timescales

Please state how the asset or service will be procured in accordance with the Government Procurement Agreement (WTO) and the EU Consolidated Public Sector Procurement Directive (2004). This may involve the use of an existing contract; a call-off contract or framework agreement; or the requirement for a new procurement under the above. After careful consideration the main contractor for the project will be procured via an established OJEU compliant framework. Use of a framework offers considerable programme advantage; competitively tendered rates; performance management and incentivises the contractor by way of repeat business. A number of available frameworks were considered including Constructing West


Midlands (CWM) and SCAPE. However, following due diligence, the Pagabo framework has been selected as the best fit with our needs and preferred arrangement. Pagabo offers the largest pool of suitable contractors and is flexible enough to meet PBL’s specific requirements including novation of the appointed design team and a two-stage tender process. A two-stage tender is proposed with a contractor being selected on the basis of a first stage tender based on fixed preliminaries, overheads and profit which are likely to account for 20-25% of the overall construction value. A schedule of rates for selected work packages will also form part of the stage 1 tender. At Stage 2 the selected contactor will work alongside the design team during RIBA Stage 4 under a pre-construction services agreement. The contract sum will be based upon the agreed schedule of rates where applicable or upon competitively tendered sub-contract work packages. This will be a completely transparent and open book process ensuring that the full value of the construction works is subject to competition in the marketplace. In addition to the financial criteria a key aspect will be the quality of the contractor’s personnel and contribution to the buildability, logistics and phasing of works given PBL intends to remain operational to the fullest extent possible. This is the primary reason for adopting a two-stage approach and is considered vital to the successful delivery of the project. Having considered a traditional approach (design team remaining in the employ of PBL throughout) versus a design and build arrangement the latter has been selected as the preferred option. There is a considerable amount of sub-contract design which would need to be covered by a contractor’s design portion supplement in any event and novating the design team to compete any unresolved design detailing on behalf of the contractor will reduce the risk associated with information flow during the construction phase. The potential for compromise on quality will be minimised by novating the design team at an advanced stage of the design process. Consideration will also be given to the appointment of a Clerk of Works to monitor quality in support of the Employers Agent.

H: FRS 5 accountancy treatment

The assets underpinning delivery of service will be on the balance sheet of the organisation as they satisfy the conditions required to classify them as fixed assets. This treatment is in accordance with The Charities SORP (FRS 102) an extract from which is set out below. A2: Tangible fixed assets 10.25. Tangible fixed assets, such as land and buildings, plant, vehicles and equipment, are held to provide an on-going economic benefit to a charity through their contribution, directly or indirectly, to the provision of goods or services by the charity. 10.26. Tangible fixed assets must be measured initially on the balance sheet at their historical cost. All costs incurred to bring a tangible fixed asset into its intended working condition should be included in the measurement of cost. The proposed treatment has been discussed with our external auditors.


12: FUNDING AND AFFORDABITLITY

A: Introduction

The purpose of this section is to set out the indicative financial implications of the preferred option. This section should also contain the funding profile for programmes projects and respective work-stream spend profiles.

B: Capital and Revenue Costs

The payment stream for the project over its intended life span is set out in Table #.

Table 10Summary of financial appraisal

Year 0 Year 1 Year 2 Total

18-19 19-20 20-21 £

£m £m £m

Preferred way forward:

Capital £1.1m £7.2m £4.9m £13.2m

Revenue £0m £0m £0m £0m

Total £1.1m £7.2m £4.9m £13.2m

Funded by:

Existing (LEP)

£0.4m £1.8m £3.8m £6m

Additional £1.4m £2.8m £3.0m £7.2m

Total £1.8m £4.6m £6.8m £13.2m

Impact on the balance sheet As explained in section 11F, the assets underpinning delivery of service will be on the balance sheet of the organisation as they satisfy the conditions required to classify them as fixed assets.

C: How Scheme will be Funded

The funding plan for the £13.2m project is as follows:

Source Amount Status as of December 2018

ACE £ 4,500,000 First round pass received, awaiting round 2 decision May 2019

LEP £ 6,000,000 First round pass received, awaiting round 2 decision

Philanthropy £ 1,500,000 £825,000 raised or pledged by December 18

Reserves £ 200,000 Available for use

Prudential borrowing (via Birmingham City Council)

£ 1,000,000 Approved by BCC Cabinet meeting in November 2018

Total £ 13,200,000 This funding plan is broken down and expanded in a timeline as Appendix 22 Confirmation of the BCC decision regarding prudential borrowing is in Appendix 23 The letter confirming PBL’s invitation to apply to ACE stage two is at Appendix 29


PBL is currently awaiting a draft heads of terms for this loan from BCC but the maximum interest rate has been confirmed at 4.7% plus costs, and these amounts have been included in the cash flow. The cash flow forecast is attached as Appendix 24 The philanthropy fund raising required for this project is well advanced with 55% (£825k) of the £1.5m target already raised. The remaining £675k will be raised by further applications to trusts and foundations, and PBL will be targeting trusts with bids of ~ £1m in order to deliver the £675k required. This ratio anticipates a realistic failure rate and still gives a high degree of confidence that this funding component is achievable. The detail of these approaches is as follows: Live Bids

- The Wickes Foundation £200,000 – Outcome December 2018 - 29 May 1961 £50,000 – Outcome December 2018 - Wolfson £150,000 – Outcome (Stage 1) February 2019 - Clore Duffield Foundation £100,000 – Initial assessment January 2019

Imminent Bids Further bids to a total value of £500,000 of applications are pending until planning permission for the project has been granted, which is expected in February 2019.

- Garfield Weston £250,000 - Fidelity UK £250,000

Any significant underachievement on philanthropic fund raising will be underwritten by increasing prudential borrowing from the £1m currently factored. A facility of up to £3m is available. T

D: Overall Affordability

Three possible iterations of this project were presented to the PBL board of trustees on 11th July 2018. The preferred option was presented as Option 2. The board approved the preferred option and associated funding package. An extract from the minutes of this meeting is included as Appendix 15 As shown in section 12C, there is no affordability gap. The breakdown of the £13.2m costs is:

Cost element Amount

Pre-construction £ 55,680

Construction £ 9,439,735

FF&E £ 300,000

Fees & Charges £ 1,214,730

Client Costs £ 580,000

Client contingency (fees & construction) £ 1,139,300

Contingency (campaign) £ 220,555

Campaign Costs £ 250,000

Total £ 13,200,000

A more detailed budget for the project is attached as Appendix 28 Allocation of the client contingency is explained in Appendix 27


13: THE MANAGEMENT ARRANGEMENTS

A: Introduction

This section of this Business Case addresses the ‘achievability’ of the scheme. Its purpose is to set out the actions that will be required to ensure the successful delivery of the scheme in accordance with best practice.

B: Programme Management Arrangements

Not applicable

C: Project Management Arrangements

The project will be managed in accordance with PRINCE 2 methodology.

C1: Project Reporting Structure

An organogram for the project is attached as Appendix 16, showing the roles, responsibilities and reporting arrangements. Please read with reference to section C2 text below.

C2: Project Roles and Responsibilities

PBL has implemented senior staffing changes over the past few years to ensure that the senior team are not only equipped with expertise in their own specific fields, but also possess the industry knowledge to be able to manage tasks and projects which require a less specific and more expanded approach, and to be able to manage both sides of these roles without any compromise. The team will work on this project collaboratively with a number of external providers and there will be both internal project advocacy and external project management experience to steer the team through the process. PBL will:

Build new skills and competencies in the organisation both for the development and delivery of the capital programme and the new areas of activity to manage post-capital project (e.g. managing the new café, expanding development and commercial work, education and informal programmes, reaching younger and more diverse audiences, etc)

Build a transitional plan to ensure staff capacity and skills are developed progressively. The plan also typically covers matters relating to communications, branding and marketing, and the involvement of key staff and partners in the fundraising and engagement activities.

In particular, the Chief Executive will be driving this forward from within the team. He was recruited specifically with a more commercial brief and likely capital project in mind and, as such, he is significantly focussed on ensuring that his team are able to deliver what is asked of them. He is supported by the Chief Operating Officer – a relatively new role within the organisation, and again, another created with these outputs in mind. Both individuals each have over 25 years’ experience of the industry, and also specific capital project experience. The Chief Executive project managed the major capital redevelopment of Scunthorpe Baths Hall and the York Barbican. The organisation was also heavily involved with the £35m refurbishment of Birmingham Town Hall in the years leading up to its reopening in 2007 – early on, PBL was selected as the end user for this venue and the team was able to ensure that the works would deliver the vision of the plan – so, very similar to Making an Entrance. The senior team will deliver specific work streams between them, reporting back up the management chain. This will ensure that the organisation continues with “business as usual” while the work is taking place. PBL has also supplemented the internal team by appointing an additional staff member to the Development Team to support the Capital Campaign and by appointing an Independent Project


Advisor with considerable experience of large scale projects. In addition, consultants have been appointed to develop the project, including: Catering and Catering Design Specialists) to develop a detailed strategy and design/layout for the new café, incorporating integrated management of bars and hospitality/catering; architects and engineers to develop designs to RIBA Stage 3; Business Planning Advice to support internal teams and develop a Detailed Business Plan; independent access audit; VAT advice; and environmental sustainability appraisals.

C3: Project Plan

The latest project timeline is attached as Appendix 17, showing full details of delivery of the project.

D: Use of Special Advisors

Special advisers have been used in a timely and cost-effective manner in accordance with the Treasury Guidance: Use of Special Advisers.

Table 11 Specialist advisors

Specialist Area Adviser

Lead Consultant/architect Page \ Park

Principle Designer Page \ Park

Services Engineer Max Fordham

Structural Engineer Arup

Acoustician Hoare Lea

Fire Engineer JGA Fire Engineering Consultants

Access Jane Topliss Associates

Catering Pat McDonald Consultancy

Legal Browne Jacobson

VAT Advice Value Added consultancy

Financial and economic analysis and support

BOP Consulting

Fundraising analysis and support

Achates Philanthropy

d

E: Arrangements for Change Management

As indicated on the project organogram the trustees of PBL are represented by the Capital Working Group which consists of two trustees and two co-opted advisors. This group has delegated authority to act on behalf of PBL and the chair of this group reports in to the PBL board of trustees for information. Notwithstanding this, to date all key decisions have effectively had the oversight of the full board. On the appointment of the Contractor and the Employer’s Agent, a formal protocol will be established which formally defines the financial tolerance at which decisions are escalated from the CWG to the full board. A similar methodology will be established for any decisions that impact on the project timeline.

F: Arrangements for Benefits Realisation

The project Benefits Register attached to this application (Appendix 4) provides full details. This sets out who is responsible for the delivery of specific benefits, how and when they will be delivered and the required counter measures.

G: Arrangements for Risk Assessment

The project Risk Registers are appended to this business case. They comprise a Capital Project Risk Register (identifies and assesses 57 risks) and a Commercial Risk Register (10 risks). Appendices 5


& 6. This sets out who is responsible for the management of risks and the required counter measures.

H: Arrangements for Contract Management

As noted above, the project will be managed in accordance with PRINCE 2 methodology. An organogram for the project (Appendix 16) is attached, showing roles and responsibilities. PBL will start the procurement process for its main contractor in January 2018, completing procurement by March 2018. A copy of the intended contract is attached in the Appendices.

I: Arrangements for Post Project Evaluation

The arrangements for post implementation review (PIR) and project evaluation review (PER) have been established in accordance with best practice and are as follows: Post implementation review (PIR) There will be an initial post implementation review in December 2020 which will include empirical evidence from the re-opening season and audience feedback on the qualitative benefits of the project collated using face to face interviews on site, and an online survey. Thereafter the benefits of the project will be measured using a suite of KPIs including:

Total attendance

% of new attenders

Non-event based footfall

Postcode/demographic analysis

Income from new revenue channels (bars, food, enhanced ticket offers, meetings)

Gross profit/net profit/contribution Project evaluation review (PER) This review will appraise how well the project was managed and whether or not it delivered to expectations. It is timed to take place after any post completion snagging period, most likely by early spring 2021. This review will consider:

Cost: was the project delivered to budget

Quality: was the anticipated materials specification achieved

Scope: did the project deliver all of the physical elements anticipated

Performance against programme: were critical dates achieved

Project management: how effective was PBL’s governance and interface with the design team

Learning: how did the project enhance individual and organisational capacity and skill

Funding partners: how effectively the building and the work that it enables meets the objectives of funding partners.

J: Gateway Review Arrangements

K: Contingency Plans

The project could be regarded to have failed if it significantly under-achieves on its quantifiable outputs in respect of foyer events, new audience generation or growth in secondary income streams. The PBL business model one of a mixed ecology where highly commercial events co-exist and support free and low-priced events which have social rather than commercial objectives. PBL will retain the option of


varying this mix, and reducing in volume those events that require the greatest internal subsidy. It would be possible to take less risk which would impact on programme diversity but allow a sustainable business model. PBL also has a range of tools including ticket price, discounting and hire charges over which it has discretion and could contribute to a remodelling of the business if the project fails to fully deliver. Although a remodelled business would not deliver so fully on PBL’s charitable objectives, it would ensure the continued delivery of service.

14: STATE AID COMPLIANCE

A letter from Browne Jacobson is included as Appendix 18. This letter states: On the basis of the conversation to data and the document we have seen, our view is that the funding is capable of being structured in a manner which complies with State aid law. This can be achieved through the use of Article 53 of the General Block Exemption Regulation 2014, which permits aid for culture and heritage consents.


15: SENIOR RESPONSIBLE OWNER DECLARATION

As Senior Responsible Owner for Symphony Hall Extension I hereby submit this request for Local Growth Fund allocation on behalf of Performances Birmingham Limited and confirm that I have the necessary authority to do so. In doing so, I also confirm that the project proposal has secured outline approval through the sponsorship body’s governance process.

Name: Nick Reed

Signed:

Position: Chief Executive Officer

15: SECTION 151 OFFICER (OR CHIEF FINANCIAL OFFICER) DECLARATION

As Section 151 Officer (or Chief Financial Officer) for Symphony Hall Extension I hereby agree that this request for Local Growth Fund] allocation on behalf of Performances Birmingham Limited is financially compliant and confirm that I have the necessary authority to do so.

Name: Janine Bradley

Signed:

Position: Director of Finance

16: APPENDICES

Index of Appendices

Appendix Item

Appendix 1: Location map of Symphony Hall

Appendix 2: Detail map of extension

Appendix 3: 5 year business plan

Appendix 4: Benefits Register

Appendix 5: Capital Project Risk Register

Appendix 6: Commercial Risk Register

Appendix 7: Diversity Strategy

Appendix 8: NEC Group letter of support

Appendix 9: CBSO letter of support

Appendix 10: Pagabo Social Value Policy

Appendix 11: Sustainability Policy


Appendix 12: Sustainability Action Plan

Appendix 13: BCC Letter of comfort

Appendix 14: Economic Appraisal

Appendix 15: Extract of PBL board minute

Appendix 16: Project Organogram

Appendix 17: Project Timeline

Appendix 18: State Aid Letter

Appendix 19: Design Team OJEU notice

Appendix 20: Cost Consultant OJEU notice

Appendix 21: Elemental Cost Plan

Appendix 22: Fundraising Milestones

Appendix 23: BCC prudential borrowing approval

Appendix 24: Cash flow forecast

Appendix 25: JCT D&B Sample contract

Appendix 26: Schedule of contract amendments

Appendix 27: Client contingency allocation

Appendix 28: Detailed project budget

Appendix 29: ACE letter inviting stage two application

Appendix 30: SWOT analysis

Item 5c

1 of 3



20th March 2019

Project Investment Decision – Journey Time Reliability Phase 2 Recommendations

1. The Programme Delivery Board is requested to:

i. Consider the investment of £501,500 (five hundred and one thousand and five hundred pounds)

of Local Growth Fund (LGF) capital grant to Birmingham City Council (BCC) towards the delivery

of the Journey Time Reliability Phase 2 project. This is in accordance with the LEP Assurance

Framework following the submission of a Full Business Case and its Independent Technical

Evaluation.

Background

2. The Journey Time Reliability project was included in the 2014 Growth deal submission aiming to

ease congestion in traffic hot spots, as a number of junctions were already identified for a first phase

it was considered a low risk with quick wins. In June 2015, BCC submitted a Full Business Case

(FBC) for £2,416,500 (two million four hundred and sixteen thousand five hundred pounds) to deliver

the Journey Time Reliability project covering the Birmingham and Solihull areas.

3. The FBC was independently evaluated and approved by the GBSLEP Programme Delivery Director

on the 6th August 2015 allocating £1,111,000 (one million one hundred and eleven thousand pounds)

to BCC and £1,303,500 (one million three hundred and three thousand five hundred pounds) to

Solihull Metropolitan Borough Council (SMBC) as capital grant.

4. A Funding Agreement was entered into with SMBC in November 2015 for Phase 1 in Solihull, which

they delivered, they then submitted an FBC for the Phase 2 which was approved in January 2017

and the project was financially and practically completed in May 2017.

5. A Service Level Agreement was entered into with BCC 30th June 2016 granting £211,000 to cover

Phase 1 of delivery in Birmingham and requiring a FBC to be submitted for Phase 2. Due to

additional works being carried out as part of the Phase 1, overall spending was re-profiled via a

change request and deed of variation in February 2018 to include £399,000 of additional spend. This

has left £501,000 for Phase 2 works.

6. Phase 2 was originally anticipated to be approved by GBSLEP in 2017 but re-forecast to July 2018

due to significant slippage in the FBC development. The final FBC was submitted in December 2018

and independent technical evaluation completed in January 2019.

7. Some spend has already been defrayed by BCC in developing Phase 2, however a change request

has been submitted supplementary to the FBC to request further slippage of £100,000 LGF from the

current financial year into 2019/20120.

Item 5c

2 of 3

8. In relation to the outcomes of BCC’s Phase 1 a Signal Junction Improvements Summary Report has

been submitted by the deliver contractor Amey PLC in January 2019 and is attached as Appendix A.

Case for Change

9. The Journey Time Reliability project is a package of highway measures designed to improve journey

reliability, supporting a modal shift to public transport throughout the Greater Birmingham area to

help to unlock economic growth & aspiration, with planned major housing and employment growth.

10. At Phase 1 the project aimed to trial local priority at traffic signals, essentially detecting vehicle type

on approach to signals and dependent on priority either, leave signals on green or change the

signals to green. Initially priority is for Buses (and HGV’s on main routes) and only operational when

the junction is not saturated by traffic i.e. it will be automatically turned off at busy times.

11. The intention for Phase 2 was for the project to roll out the traffic priority modelling methodology

being trialled in Phase 1. The FBC for Phase 2 has also taken into account the findings of the West

Midlands Urban Traffic Control research by the Transport Research Laboratory.

12. Initially phase two was intended to address 19 junctions however given the reduced amount of

remaining funding and the overlap with Birmingham Cycle Revolution and Sprint this has been

reduced to 6 alternative junctions prioritised due to significance of delays. These are;

A435 Moseley Road/Brighton Road/Cromer Road

A38(S) Bristol Road/Selly Oak Station

A38(S) Bristol Road/ Sir Herbert Austin Way

A38(S) Bristol Road//Bell Lane/Church Road

A38(S) Bristol Road/Frankley Beeches Road

A38(S) Bristol Road/Great Stone Road

13. The independent technical appraisal (ITE) states the economic case for the scheme has been based on economic efficiency through reduced delays and journey times. New national guidance sets the lower Benefit to Cost Ratio (BCR) threshold at 1:5. The key monetised costs and benefits, and the methodology behind the case for Journey Time Reliability Phase 2 indicate a BCR just above at 1:6.

14. Since the inception of the Journey Time Reliability project there has been significant change across Birmingham with many infrastructure developments on the go including, Metro extensions, HS2 related projects and the impending developments for the Common Wealth Games. As such there is a possibility journey priorities may change in the coming years. The ITE has highlighted a risk in relation to how the junction operation may improve or worsen as a result of adjacent schemes, or schemes on the same corridors.

15. Project Milestones

Milestone Completion date

BCC Approvals January 2019

Appoint Design and Build Contractor January 2019

LEP approval January 2019

Item 5c

3 of 3

JTR Detailed Design (6 sites) Complete

Commence construction works March 2019

Complete construction works June 2019

Monitoring and Evaluation January 2020

Project close February / March 2020

Outputs and Outcomes

13. The project is expected to result in a benefit cost ration of 1.6 (Medium Value for Money):

Funding Profile 14. The Phase 1 and 2 funding profile is set out below.

15. The project declares as the scheme will deliver general interest public works, it is compliant with

State Aid rules.

Conclusions 16. As a second phase of delivery the project will provide delivery changes to 6 traffic junctions within

Birmingham in order to prioritise traffic and ease congestion.

17. The GBSLEP Director/Programme Delivery Board is asked to consider Phase 2 of the Journey Time Reliability project and make a decision to;

a. Approve investment of £501,000 (five hundred and one thousand pound) LGF capital

grant funding.

b. Placing the project on a reserve list for consideration should there be financial slippage at

the end of 2019/20 or 2020/21

Reviewed by: Russell Eacott Interim Programme Director Prepared by: Wendy Edwards

Project Champion Contact: [email protected] Mobile - 07548 712827

Date: 22 February 2019

2016/17 2017/18 2018/19 2019/20 Total

Capital Funding

Local Growth Fund £211,000 £420,000 £200,000 £280,000 £1,111,000

Integrated Transport Block

£73,000 £24,000 0 £262,000 £359,000

Section 106 0 0 0 £55,000 £55,000

Section 278 0 0 0 £25,000 £25,000

Total Capital Funding 284 444 200 622 1,550


Journey Time Reliability for Growth Scheme

Signal Junction Improvements Summary Report

January 2019

!

Journey Time Reliability to Growth Areas

1

Journey Time Reliability to Growth Areas Summary Report V.1 290119

Issue and Revision Record This document is issued for the party that commissioned it and for specific purposes connected with the above titled project only. It should not be relied upon by any other party or used for any other purpose. We accept no responsibility for the consequences of this document being relied upon by any other party, or being used for any other purpose, or containing any error or omission which is due to an error or omission in data supplied to us by other parties.

Revision Date Originator Checked Approved Description V.1 10/11/2016 SG First Draft


2


Contents

1. EXECUTIVE SUMMARY

2. SITE REPORTING

3. SITE IMPROVEMENTS

4. BUS JOURNEY TIME ASSESSMENTS

5. SUMMARY OF BENEFITS

6. APPENDIX A NOTE ON SCOOT AND MOVA CONTROL


3


1. EXECUTIVE SUMMARY The Journey Time Reliability to Growth Areas Scheme is a package of highway measures designed to help improve journey reliability throughout the Greater Birmingham & Solihull Area that will help to unlock economic growth & aspiration and with planned major housing and employment growth.

The improvements made to each JTRfG junction are based upon improving the overall efficiency of the junction by using, or restoring, adaptive control methods, in this case either SCOOT or MOVA control or a combination of both (ref. Section 6: Note on SCOOT and MOVA Control). This approach has required, in most cases, site detection to be restored, extended and utilised for Bus Priority use. The operational design taken for each site has been to use the minimum amount of vehicle detection utilising a value engineered approach based on using existing roadside assets and minimal use of new assets. Consideration has also been given to the future maintenance requirements of each site and the ease of maintaining the operational status of the site.

Where viable, localised bus and freight priority measures have been introduced using vehicle classification from detector loops. In most cases this is confined to the main road approaches, although on some sites this extends to all approaches, and consists of providing a short green extension (typically 3-5 seconds) to allow a bus, or freight vehicle, to avoid stopping if the approach is about to go to red. Stage calls are not provided at present as this is considered to be disruptive to junction cycle time due to the additional recovery time needed, which can typically be 2-3 cycles of the junction.

At the moment bus journey time has been the only performance measure taken which has indicated improvements at some sites. However, in most cases the bus journey time measured across a junction is short that typically provides either static or small improvement in journey time. A better measure would be to use either a longer journey time for isolated junctions i.e. use timing pints further away from the junction or measure the overall journey time across a number of junctions on a route, such as the A45 Coventry Road junctions, which would provide a more accurate measure of benefit.

Equally, no measure of the improvement to all vehicle journey times has been made within the scope of this project but the junction improvements made, by upgrading and validating and the junctions, will have had a positive effect to all vehicles with SCOOT giving typical delay savings of 15%* and MOVA 10-20%*. Consideration also must be given to the impact of the year on year growth in traffic across the junctions in terms of car, van and lorry traffic.

Additionally, the junction improvements made through the JTRfG Scheme have provided wider benefits by establishing a design and operational standard that has been replicated at many other junctions. This work has also enabled GLOSA (Green Light Optimised Speed Advisory) to be initially trialed at JTRfG sites along the Coventry Road and is now being extended to the Tyburn Road junctions. This award-winning project (ITS UK Project of the Year 2018) has addressed a wide range of challenges and concerns as to how to deliver accurate Signal Phase and Timing (SPaT) information in an adaptive traffic signal control environment (i.e. SCOOT and MOVA controlled junctions) as current use of SPaT has been associated with fixed time plan signal junctions. The JTRfG investment in providing maximum adaptive control capability has been directly beneficial to this project.

*Source: TRL


4


2. SITE REPORTING Each site was subject to an initial operational assessment to establish its current operational status, fault status and provide recommendations for improvements. This resulted in a report generated for each site that provides a operational assessment of each of the Birmingham traffic signal junctions identified for improvements by the Scheme. Each report documents:

• The operational conditions prior to improvement in line with the Scheme requirements • The improvements made to the junction operation • Analysis of Bus journey Times through the junction: pre-changes, post changes and 1 year prior • Overall assessment of the benefits gained as a result

The control methodology of each site has been assessed with regard to: • Congestion and queue clearance • Bus movements through the junction • Bus priority measures, either existing or potential • Pedestrian/Cyclist demand • Junction layout; Stage and Phase operations • General junction operation, right turning issues, SVD potential for Bus and HGV movements

3. SITE IMPROVEMENTS Table 1 below summarises the improvements made at each site, the traffic control method and the bus priority measures implemented.

Site Improvements Control Method Bus Priority E0613 Heath Mill Lane / Liverpool Street / Fazeley Street

• All faults rectified • Update to latest version of

MOVA • MOVA Datasets Revised • Bus and Freight priority

measures implemented using RTEM functionality

• Site commissioned and validated

MOVA • Heath Mill Lane: Phase A • Great Barr Street: Phase C • Liverpool Street: Phase D

E1912 Asda Store / Bordesley Green / Birmingham College

• Implementation of Compact MOVA control

• Bus priority measures: RTEM not implemented

• Site Commissioned and Validated

Compact MOVA Using Compact MOVA does restrict the use of RTEM bus priority measures but if MOVA control proves to be successful buses will benefit from the overall efficiency gained from the junction. If needed RTEM bus priority could be implemented using the X loops


5


but this needs further consideration after the performance of the junction has been properly assessed.

E1991 A45 Coventry Road / Kings Road

• Implementation of SCOOT and MOVA control

• RTEM Bus priority measures implemented:

• All IN loops cut as SCOOT loops • Site commissioned and

validated for SCOOT and MOVA operation

This site also forms part of the DfT GLOSA project test sites along the A45 Coventry Road.

SCOOT & MOVA • Phase A Coventry Road E/B, Detectors IN1, IN2 & IN3

• Phase C: Coventry Road W/B, Detectors IN9, IN10 & IN11

E1992 A45 Coventry Road / Berkeley Road






SCOOT & MOVA • Phase A Coventry Road E/B

• Phase C: Coventry Road W/B

E1994 A45 Coventry Road / Holder Road / Forest Road






SCOOT & MOVA • Phase A: Coventry Road E/B

• Phase C: Coventry Road W/B

E2132 East Meadway / Tile Cross / Gressel Lane

• All faults rectified (Detectors DIN & BSL as identified)

• Update to latest version of MOVA

• MOVA Datasets Revised • Bus and Freight priority


MOVA • East Meadway: Phase A • Gressel Lane: Phase B • Cooks Lane: Phase C • Tile Cross Road: Phase D


6



E4241 Lichfield Road / Tamworth Road

• Updated to latest version of MOVA

• MOVA Datasets Revised • Bus and Freight priority



MOVA • Lichfield Road SB: Phase A

• Tamworth Road: Phase B

• Lichfield Road NB: Phase C

• Anchorage Road: Phase D

E4439 Tyburn Road / Bromford Lane





This site also forms part of the DfT GLOSA project Phase 2 test sites

SCOOT & MOVA • Phase A/B Tyburn Road W/B

• Phase G: Tyburn Road E/B

E4451 Tyburn Road / Jarvis Way


• RTEM Bus priority measures implemented



This site also forms part of the DfT GLOSA project Phase 2 test sites

SCOOT & MOVA • Phase A Tyburn Road E/B

• Phase C: Tyburn Road W/B

Table 1: Summary of Traffic Signal Improvements

4. BUS JOURNEY TIME ASSESSMENTS The improvements delivered by The Journey Time Reliability to Growth Areas Scheme are independently measured by assessing the improvements in journey time from the National Express AVL system. As an initial analysis detailed cross-junction times have been examined and are detailed below. The times for each junction are based on the 80th percentile of the time required for buses to travel from and to the closest stops either side of that junction. The baseline site data is taken from bus journey times in October 2016 in comparison to the post scheme implementation data taken in October 2017.


7


5. SUMMARY OF BENEFITS It is important to view the journey time analysis in the correct Context as there are a number of factors that need to be taken into account when comparisons are made between the journey times provided in the individual site reports:

• There will be variable dwell times for buses as they pick up and set down passengers at bus stops between their timing points

• The journey time data can be adversely affected by road works either on the route or adjacent to it. • Certain routes can be adversely affected by incidents on the Motorway network that generate

abnormally high levels of traffic on the urban network. • The year by year comparisons cannot take into account the annual growth in traffic across the routes.

To put this in context the Department for Transport (DfT) released the following update on traffic growth for the year ending in March 2017:

o The provisional figure of 324.3 billion vehicle miles (bvm) travelled on Great Britain’s roads in the year ending March 2017 was 1.7% higher than the previous year and 3.2% higher than the pre-recession peak in the year ending November 2007.

o DfT reported that rolling annual motor vehicle traffic has now increased in each quarter in succession for four years.

o Although the number of cars on the roads rose during the year by 1.4% to a record 252.9 bvm, van traffic rose three times as fast, increasing by 4.5% to a new peak of 49.6 bvm.

o For the last four years, van traffic has increased on average by 4.8% a year, and has been the fastest growing traffic type (in percentage terms) over this time. While lorry traffic fell over the year by 0.8% to 16.6 bvm, DfT officials said HGV traffic is 7.5% higher than four years ago, making it the second fastest growing traffic type in this period

Table 2 below summarises benefits and conclusions for each site.

Site Summary of Benefit Conclusions

E0613 Heath Mill Lane / Liverpool Street / Fazeley Street

The Bus journey time data comparison between October 2016 and October 2017 does show some improvements in journey time across the day but unfortunately the site was subject to major utilities work during this month, so the journey time comparisons are not a true like for like comparison.

The lack of a suitable like for like journey time comparison does not allow a definitive assessment of the benefits gained from the upgrade of the junction and further analysis is required.

E1912 Asda Store / Bordesley Green / Birmingham College

The Bus journey time data comparison between October 2016 and October 2017 does show a fairly static journey time with some slight increases but these are only between 0.1 and 0.2 of a minute. It should also be noted that the journey time across this junction is very short and will largely fall within the cycle time of the junction.

The initial comparisons of like for like journey time does not allow a definitive assessment of the benefits gained from the upgrade of the junction. Further analysis is required potentially utilising a longer journey time period.


8


E1991 A45 Coventry Road / Kings Road

The Bus journey time data comparison between October 2016 and October 2017 does show a fairly static journey time with some slight increases but these are only 0.1 of a minute. It should also be noted that the journey time across this junction is very short and will largely fall within the cycle time of the junction. Therefore, it is recommended that the bus journey time comparison is re-run for alternate months using a longer journey time (from Haybarnes Island to Swan Island) where a more representative like for like comparison on journey time can be made.

The initial comparisons of like for like journey time does not allow a definitive assessment of the benefits gained from the upgrade of the junction and further analysis is required potentially utilising a longer journey time period.

E1992 A45 Coventry Road / Berkeley Road

The Bus journey time data comparison between October 2016 and October 2017 does show a fairly static journey time with some slight increases but these are only 0.1 of a minute. It should also be noted that the journey time across this junction is very short and will largely fall within the cycle time of the junction. Therefore, it is recommended that the bus journey time comparison is re-run for alternate months using a longer journey time (from Haybarnes Island to Swan Island) where a more representative like for like comparison on journey time can be made.


E1994 A45 Coventry Road / Holder Road / Forest Road

The Bus journey time data comparison between October 2016 and October 2017 does show a fairly static journey time with some slight increases on the westbound side of the junction. As with sites E1991/E1992 it should be noted that the journey time across this junction is very short and will largely fall within the cycle time of the junction. Therefore, it is recommended that the bus journey time comparison is re-run for alternate months using a longer journey time (from Haybarnes Island to Swan Island) where a more representative like for like comparison on journey time can be made.


E2132 East Meadway / Tile Cross / Gressel Lane

The Bus journey time data comparison between October 2016 and October 2017 does show an improvement in the journey time from Tile Cross Road to East Meadway with some slight increases on

The initial comparisons of like for like journey time does not allow a definitive assessment of the benefits gained from the upgrade of the junction and further analysis is


9


East Meadway to Tile Cross approach. It should be noted that the journey time across this junction is very short and could fall within the cycle time of the junction.

required potentially utilising a longer journey time period.

E4241 Lichfield Road / Tamworth Road

The Bus journey time data comparison between October 2016 and October 2017 does show an improvement in 50% of the journey times with either a static or small dis-benefit in the remaining journey times. It should be noted that the journey time across this junction is short and could fall within the cycle time of the junction. Therefore, it is recommended that the bus journey time comparison is re-run for alternate months using a longer journey time, including the bus priority measures on the Anchorage Road and Tamworth Road approaches, where a more representative like for like comparison on journey time can be made.


E4439 Tyburn Road / Bromford Lane

The Bus journey time data comparison between October 2016 and October 2017 does show an improvement in 50% of the journey times for buses crossing Tyburn Road towards Erdington with either a static or small dis-benefit in the remaining journey times. Similarly, buses crossing Tyburn Road towards Castle Vale a similar improvement in 50% of the journey times measured with either a static or small dis-benefit in the remaining journey times. It should be noted that the journey time across this junction is relatively short and could fall close to the cycle time of the junction at peak periods. Therefore, it is recommended that the bus journey time comparison is re-run for alternate months using a longer journey time where a more representative like for like comparison on journey time can be made.


E4451 Tyburn Road / Jarvis Way The Bus journey time data comparison between October 2016 and October 2017 show a static or small dis-benefit journey times. It should be noted that the journey time across this junction is very short and will fall within the cycle time of the junction during all periods. Therefore, it is recommended that the bus journey time



10


comparison is re-run for alternate months using a longer journey time where a more representative like for like comparison on journey time can be made.

Table 2: Summary of Benefits

6. NOTE ON SCOOT AND MOVA CONTROL The strategy outlined within this report to improve bus journey time reliability is based on the results and experience gained using similar techniques at traffic signal junctions. The key interventions and potential benefits are detailed below: Restore SCOOT Operation & Validate: This process has been widely implemented on strategic routes via the application of the West Midlands UTC Major Scheme. The most recent example of the improvement gained for bus journey time reliability is evidenced at two sites on the A34 and A453 namely the Wellhead Lane junction and Holford Drive junction. Prior to validation buses were experiencing severe delays of up to 20 mins through the junctions particularly through the PM peak period. Both junctions had detection faults that were rectified and they were both restored to SCOOT control and validated. The subsequent improvement to the bus journey time through these junctions has been monitored using the National Express bus AVL system that has shown a consistent improvement in journey time through both junctions with a reduction in delay of 4-5 mins on the overall journey time between timing points. Locally the journey time improvement is much higher with the delays of up to 20 mins no longer evident. Implementation of MOVA control & configuration of joint SCOOT & MOVA control options: MOVA and SCOOT have co-existed for 20 years now, the former designed for isolated signal controlled junctions and the latter for networks. For about half that time, MOVA has also been used in small networks, generally becoming known as ‘Linked MOVA’. Recent advances in traffic control technology have made the proposition of changing from SCOOT to MOVA and vice versa at the ‘flick of a (software) switch’ practicable. As part of the West Midlands UTC Major Scheme four signal controlled junctions in Solihull were equipped to allow MOVA or SCOOT to control them on an individual basis. The project was set up to investigate the potential benefits of being able to run the optimum signal control strategy for given conditions either at selected junctions or the whole network. In order to measure the benefits and to help provide a business case for the implementation of a Journey Time Monitoring System (JTMS) across strategic routes, a number of ANPR cameras were set up so that number plate matching with times could be used to measure journey times over a large sample of journeys. The traffic patterns in the network were observed and consideration given as to the best combinations of strategies was made. At the lower flows experienced during the off peak MOVA offered better performance than SCOOT. In the PM peak where flows were higher, SCOOT was starting to gain some advantage, although MOVA still performed slightly better over the whole PM peak period. This is broadly as would be expected given that at low flows, greater variation in arrivals per cycle occurs than when flows are higher. The speedier


11


response to changes in traffic conditions on a cycle-by-cycle basis is likely to give MOVA the edge. As traffic builds up, MOVA maintained some advantage here, though probably partly due to the use of linked MOVA in this implementation. Also, the flows in the evening peak were not that high, with congestion rarely seen as an issue. Therefore, in this network, MOVA appears to offer some useful benefits over a range of traffic flows, from quite low to quite high. SCOOT performs better at the higher flows experienced during the evening peak. It wasn’t an objective to show which strategy was best particularly, but rather to optimally combine the strengths of the two. All networks will have their own characteristics, as this one did. Here the junctions were close together and a School entrance at one of the junctions (with the exit being a priority entry into the network between two of the junctions) proved to be a significant factor in the morning peak period. If the network had been more spread out with greater distances between junctions, there may have been more scope for mixing SCOOT and MOVA control at the same time. As it was, this option was not applicable for the reasons explained above. The West Midlands UTC SCOOT / MOVA trials (undertaken by TRL) provide evidence of the potential benefits of using hybrid adaptive control techniques and this approach has been trialled elsewhere with positive results. Many new junctions are now being installed with joint SCOOT / MOVA capability and recent examples of this in Birmingham are the following junctions: A45 Morrisons Access Site, A456 Hagley Road / Galton Road and Hagley Road / Bearwood.

1

Item 6b

Greater Birmingham and Solihull Programme Delivery Board

20th March 2019

ENTERPRISE ZONE INVESTMENT PLAN 2019

1. Purpose 1.1 This paper sets out the content of the Enterprise Zone Investment Plan (2019),

including the phased programme, financial principles, and governance and reporting.

2. Recommendations

That the Board: 2.1 Note the current draft of the Enterprise Zone Investment Plan (2019) attached as

Appendix 1.

2.2 Note that once the funding requirement for Birmingham Smithfield has been defined

the final draft of the Enterprise Zone Investment Plan (2019) will be presented to the

GBSLEP Board in June 2019.

3. Background 3.1 The Enterprise Zone (EZ) was formed in 2011 with the purpose to accelerate

development in the City Centre, delivering the strategy of the Big City Plan (2010)

and GBSLEP priorities including;

Improving economic performance and creating jobs

Delivering the spatial strategy for growing the City Centre Core by over 25%

through five Areas of Transformation as set out in the Big City Plan.

Delivering enhanced infrastructure including improvements to public transport

and public realm all focused on attracting inward investment, occupiers, visitors,

residents and workers.

3.2 The first EZ Investment Plan was launched in 2012 with a £128m programme of

investment. In 2014 the Investment Plan was updated to reflect a longer term

investment period up to 2022/23 and a revised £275m infrastructure programme. In

2015 the EZ area was extended from its original 26 sites to 39 sites, covering 113ha.

In 2016 the Curzon Investment Plan was launched setting out a £724m programme,

consisting of £587m of further EZ funding and £137m of West Midlands Combined

Authority (WMCA) resources to maximise the potential of HS2. A further commitment

from the EZ of £183m was made to support delivery of the Midland Metro from

Digbeth, through East Birmingham, to UK Central. The EZ investment plans are

2

Item 6b

funded through the projected growth in business rates generated within the EZ sites

managed through a financial model.

3.3 Decisions relating to the EZ are taken by the EZ Board, which is part of GBSLEP.

BCC is the Accountable Body for the GBSLEP and the EZ. Capital projects are

carried out by the City Council (or it could potentially be other organisations), and are

funded by BCC borrowing, which is supported by an annual revenue grant from the

EZ. The capital expenditure and the borrowing are therefore BCC’s, with

accountability to the EZ through the revenue grant.

Progress

3.4 Since the launch of the EZ in 2011 considerable progress has been made in

delivering investment, development and jobs in the City Centre. In total 4,226 jobs

and 208,000sqm of new floorspace has been created. To date the EZ has committed

over £118m for infrastructure investment which has leveraged £575m of private

sector investment. This represents a ratio of over 1:5 for public to private sector

spend. A summary of the impact to date is set out in Table 1 below.

3.5 The EZ investment has been instrumental in unlocking and accelerating key strategic

sites. One of the largest EZ sites is the Paradise development which has seen

considerable progress following an initial investment of £87.790m in 2013. All the key

highway works and infrastructure preparation work are complete for Phase 1 and its

set to deliver 335,000sqft of prime office space with Price Waterhouse Coopers

taking occupation of the first building, One Chamberlain Square (150,000sqft,) in mid-

2019. In January 2019 the GBSLEP approved a further investment of £51.277m to

deliver Phase 2 and work is already underway to deliver the first building, One

Centenary Way, which will be speculatively built to deliver another 275,000 sqft of

office space. In total the Paradise scheme will deliver 10,000 jobs and 1.5m sqft of

new floorspace.

3.6 Birmingham Smithfield, which is a £1bn redevelopment and the largest single EZ site,

will see expansion of the city core creating opportunities for over 300,000sqm of new

leisure, retail, cultural and commercial floorspace and 2,000 new homes. As part of

developing the EZIP 2014 and to reflect the site’s importance and the benefits it will

deliver, funding was allocated to accelerate development, including resources to

relocate Wholesale Markets. Birmingham City Council, as the major landowner, has

recently procured Lendlease as its development partner and there will now be a

period of design and development work over the next 6 months to define the

infrastructure requirements and level of EZ investment required. Once complete the

EZIP 2019 will be updated and presented to the GBSLEP Board.

3.7 A further £5.8m has contributed towards the delivery of business space supporting

the creative and digital sectors, such as the Garrison Data Centre, Eastside Locks

and Innovation Birmingham.

3.8 The EZ also has a crucial role to play in maximising the impact of HS2 within the

region and an initial £1.1m has been approved for design work of the public realm

3

Item 6b

surrounding the HS2 station which will be essential for connectivity and opening up

EZ sites. £9m has also been committed to support delivery of the Metro stop, within

the HS2 Station, as part of the Eastside extension of the Midland Metro. Funding has

also been approved for feasibility work to develop schemes for key infrastructure

projects, such as the remodelling of Moor Street and Digbeth High Street, to improve

connections and unlock sites.

3.9 In addition to the significant progress in delivering development sites, the EZ has

invested £24m to bring forward the Westside extension of the Midland Metro and the

redevelopment of Centenary Square; whilst £4m of funding has supported the

delivery of improvements to the ring road and the progress of key public realm

schemes connecting EZ sites at Snowhill and Birmingham Smithfield.

Table 1 – EZ output achievement since 2011

Number of jobs created 4,226

Number of businesses locating in the EZ 64

Land Developed - (Sqm) ('000) 208

Land reclaimed and made ready (ha) 15

Total Investment (£m) 693

Investment - Public (£m) 118

Investment - Private (£m) 575

Uplift in Business Rates (£m) secured 11.8

EZ Investment Programme Total Expenditure (£m); 129.4

EZ Investment Programme Capital Expenditure (£m) 118.2

EZ Investment Programme Revenue Expenditure (£m) 11.2

4. The Enterprise Zone Investment Plan (2019)

4.1 Today the EZ consists of 39 sites covering 113ha of the city centre. With the EZ

programme set out across 2 Investment Plans, the EZIP (2014) and the Curzon IP

(2016) and a consolidated approach is needed in order to manage the programme

and investments. Linked to this has been the comprehensive review of the

programme including governance, financial principles and model, development

phasing, business rates projections and project delivery. The creation of the EZIP

2019 will ensure that there is a clearly defined programme with a robust governance

framework in place to deliver the transformational EZ programme now and into the

future.

4.2 The EZIP 2019 focuses on a 10-year period over which to manage investment

against forecasted income and deliver upon clear priorities. This approach responds

to the need to continue the acceleration of major development schemes and

infrastructure works that will unlock growth and maximise the potential of HS2. This

approach is fully aligned to the Big City Plan, Curzon HS2 Masterplan and HS2

Growth Strategy as well as continuing the delivery of GBSLEP priorities. Appendix 2

4

Item 6b

sets out the 10 year phased investment programme, which has been structured as

follows:

Accelerate delivery of current commitments (Phase 1-2).

Maximising early opportunities from HS2 (Phase 3-5).

Longer term strategic priorities (Phase 6-9).

4.3 The EZIP 2019 is attached as Appendix 1 and sets out the overall strategy for the EZ

including the detail of each phase and associated projects.

Affordability of the EZIP 2019

4.4 The EZ is forecast to generate £2.2bn from the uplift in business rates over the

programme’s lifetime up to 2046. Programme delivery and decision making is based

on secured business rates income and as more business rates income is secured

then projects within each phase of the EZIP 2019 can be accelerated and business

cases developed which would be assessed against the overall affordability of the

programme.

4.5 The financial model for the EZ has evolved since its inception to a more sophisticated

position. In developing the EZIP 2019, the business rates which are expected to be

generated from each EZ site have been reviewed to ensure income projections are

robust and in line with the profile of future development, particularly with a number of

schemes on-site/completing and creating business rates i.e. Paradise, Snow Hill 3,

Arena Central and Beorma. Based on this review there is sufficient funding, including

the contingency, to deliver phases 1-3 of the investment programme and full

business cases can be developed for each project. Further phases will be brought

forward as the level of development on the EZ sites increases and the growth in

business rates income is secured.

5. Financial Management

5.1 In 2012 the GBSLEP and Birmingham City Council established a number of financial

principles to manage the delivery of the EZ and associated Investment Plans. Over

the last 12 months a comprehensive review of the EZ programme has been

undertaken as set out at 5.4. In particular a more robust approach to the

consideration of business rate income has been taken to manage the financial risks

associated with the EZ model. The Business Rate income from each of the EZ sites

has been categorised according to its risk status. This is intended to identify the

“secured income” which may reasonably be relied on to support borrowing costs and

in EZ financial planning. The categories are as follows:

a) Secured – business rates paid or legally due.

b) Committed – where construction is on site or business are guaranteed via

legal agreement i.e. business rates are deemed to be reasonably secure.

5

Item 6b

c) Other Committed - specifically relates to Commitments on the Paradise

redevelopment. A separate category was deemed necessary due to the

size and impact of Paradise on the wider EZ Programme £ 160.2m

(Phase 1 only).

d) Uncommitted – developments not yet started so business rate income is

not secure.

5.2 For reasons of prudence the 2019 EZIP has been modelled on the basis of ‘secured’

business rate income only and ignores the additional business rate income from

future planned investments. Additionally the financial model has been developed to

include some prudent contingencies around business rate income. As each year

progresses it would not be unreasonable to expect the EZ resource base to grow

above that currently anticipated. As with all EZ projects the GBSLEP will receive

Business Cases and will consider them for approval based on the latest information

available around the authority’s prudential borrowing limits and cash affordability.

Developments in business rate forecasting

5.3 Over time business rate income forecasting methodology has developed with the

benefit of experience. Improvements include:

More rigorous forecasting of individual sites with BCC Planning and Business

Rates officers.

For prudence, building in longer lead-in times for the actual receipt of

Business Rate Income on completed developments , typically 6 months

Only taking into account secured and committed business rate income figures

into the Financial Model for affordability assessments (see above and below).

Basing the contingency allowance on the Secured and Committed income

only.

Building in 5% deductions into the Projected Business Rate income forecasts

every year from 2022/23.

In addition to the provisions created for both bad debts and reliefs, a new

provision has now been built into the financial model to cover the potential

impact of future Appeals on Business Rates income forecasts.

5.4 Following the review of the EZ programme and the more focussed methodology for

identifying “secured income” it is now reasonable to review the Financial Principles,

which will now be applied as identified below.

Financial Management/Approval In deciding on the use of EZ resources the following tests will be considered;

o 15% of the business rates income every year is ring fenced for uncertainties and the release of contingency kept under review on an annual basis.

6

Item 6b

o Of the remaining 85% of business rates income, financial commitments

through borrowing will be monitored to ensure they are no greater than 65%

of the total business rates income.

o All borrowing is repaid within the life of the Enterprise Zone.

o Interest charges for local authority assets are rolled up to smooth out cost and

income cash flows.

o All EZ expenditure must comply with Birmingham City Council accounting and

debt repayment policies.

o Risk Allowances will be made to account for circumstances such as bad

debts, appeals, rate relief and future rate rises.

o The availability of contingency funding.

Project Approval

o All project expenditure is supported by individual business cases.

o EZ funding approvals for site developments are supported by appropriate

legal agreements linked to the business rates uplift.

o Birmingham City Council, as the Accountable Body, will ultimately endorse all

EZ funding decisions to ensure affordability based on the availability of future

business rates income.

o Expenditure outside Birmingham will be the responsibility of the relevant local

authority.

Reporting

o Quarterly updates on key indicators and progress will be presented to the

GBSLEP Board.

o An Annual Report on performance against the EZIP 2019 and a review of the

EZIP Programme will be presented to the GBSLEP Board.

Governance

5.5 The GBSLEP Board has overall strategic ownership of the EZ and for setting and

approving EZ Investment Plans. To continue to deliver upon this transformational

programme of investment and ensure the successful outcomes of the EZ robust

governance and programme management will be put in place. This includes financial

management and a detailed gateway process which supports effective and affordable

decisions. The terms of references for each organisation and decision making board

are summarised below and in the GBSLEP Assurance Framework.

5.6 The GBSLEP is supported by the Programme Delivery Board (GBSLEP PDB), which

is charged with ensuring the delivery of the EZ to help achieve the objectives of the

Strategic Economic Plan. It’s empowered to grant full approval to projects seeking

funding of up to £10m and the release of development funding or change requests

within this level of delegation.

7

Item 6b

5.7 The EZ requires a single statutory body to take on the role of Accountable Body. This

Body must be a legal entity, nominated to act on behalf of the GBSLEP for the receipt

and investment of business rate growth and uplift within the EZ designation.

Birmingham City Council acts as the Accountable Body on behalf of the GBSLEP

Partnership to manage and redistribute the business rate growth and where capital

expenditure is to be financed; Birmingham City Council will facilitate the borrowing. If

funding becomes available to support projects outside the EZ then the relevant local

authority will take responsibility for providing the Accountable Body function for that

project.

5.8 Delivering, developing and managing the programme will be led by both the GBSLEP

and BCC. Overall programme management will be led by the GBSLEP Executive

Team, which will provide secretariat support to the Boards and associated

governance requirements. It will co-ordinate all aspects of appraising funding

applications and day to day monitoring and performance management of projects

and will report to both the GBSLEP PDB and main Board.

5.9 BCC will lead the delivery of the programme and provide multidisciplinary technical

expertise across a range of disciplines, including planning, property, project

management and transport/ highways infrastructure.

5.10 The GBSLEP Board will receive quarterly updates which will report on delivery,

performance and expenditure. An annual update will also be provided to the board

which summarises performance against the EZIP 2019 along with a review of the

investment programme.

Prepared for: GBSLEP Board Prepared by: James Betjemann Head of Enterprise Zone and Curzon Development [email protected] Appendices: Appendix 1 – EZIP Investment Plan 2019


Project Exception Report

Change Management Policy – Appendix C – Project Exception Report Page 1 of 8

Project Name: HS2 Curzon Station Enhanced Public Realm

Project Sponsor: Richard Cowell

Project Manager: Nick Matthews EZ Approved Date (actual/forecast) 17th June 2017

Project Start On Site Date:

1st April 2018 Report Completed by (Sponsor/PM)

Nick Matthews Report Date 5th February 2019



Background Context of project and funding including current status and reason for change

In February 2014 the GBSLEP and City Council launched the Curzon Masterplan as part of the wider HS2 Midlands Growth Strategy to maximise the economic impact of HS2. The Masterplan set out how the arrival of HS2 and the growth and regeneration opportunities around the terminus station could be unlocked. Covering 141 hectares of the City Centre, with the area centred on the HS2 Curzon Station, the strategy of the Masterplan is to deliver a fully integrated and connected world class station, which will support growth and regeneration for the City Centre and wider area. This will be achieved through the delivery of five big moves:

Station design to create a landmark building and world-class arrival experience

Paternoster Place

Curzon Promenade and Curzon Square

Station Square and Moor Street Queensway

Curzon Station Metro stop In July 2016 the GBSLEP approved the Curzon Investment Plan, which included the allocation of additional EZ funding of £556.8m towards a £724m local infrastructure investment package to maximise the impact of HS2 arriving in the region in 2026. The package will be delivered in two phases:

Phase One - upfront investment in the infrastructure required to unlock growth immediately around the station including the Big Move projects and Metro Extension to Digbeth,

Phase Two - further investment over wider area including area wide public realm and local transport/highway improvements and social infrastructure to support new residential neighbourhoods.

The economic impact across the Curzon area is estimated as 36,000 jobs, 600,000 sqm of commercial floorspace, over 4000 new homes and £1.7bn private sector investment. In June 2017 the GBSLEP approved Enterprise Zone approved funding of £564,000 to design the enhanced public realm surrounding the HS2 Curzon Station. Originally this funding was intended to deliver RIBA 3 designs for Paternoster Place, Curzon Promenade and Curzon Square and Curzon Canalside . However, once the Station Design team was appointed in March 2018 it became clear that this funding was insufficient to deliver the work. Following negotiations with HS2 it was agreed by the GBSLEP EZ on the 7th March 2018 that the design of the public realm would be delivered in 2 phases (See Appendix 1);

Phase 1 (DAL 1-2) – RIBA 2 Concept Design to select single options (April – July 2018)

Phase 2 (DAL 3-5) – RIBA 3 Scheme Design (July – December 2018)



The initial funding approval would deliver Phase 1 at a cost of £550,120. This work completed in September 2018, at which point HS2 confirmed the cost for delivering Phase 2. In November 2018 the GBSLEP approved Enterprise Zone funding of £600,046 to deliver Phase 2, which included;

£500,046 - HS2 Design Work to DAL 5 (RIBA 3)

£50,000 - QS to independently appraise the costs

£50,000 - Consultant to produce a full business case. Phase 2 completed in December 2018 and HS2 has now confirmed that additional funding of £319,596 is required for the next stage of work to;

Prepare and Submit a Planning Application

Prepare the ITT to procure the station design and build contractor

Prepare a Delivery Agreement A breakdown of the funding is attached as Appendix 2. The actual amount of funding required is £295,346 as there is an underspend of £24,250 for the consultant to produce the full business case. It was not possible to identify this cost in November 2018 as HS2 and their design team could not confirm the level of resource required to prepare the ITT or planning applications as it was dependent on the RIBA 3 designs, for example it could not be determined if planning could be obtained under Schedule 17 of the HS2 Act or it required a traditional Town and Country Planning Application - These require a different level of resource to complete. The timeline for this work, including the full business case, is attached as Appendix 3. The key risk of not providing this additional funding is that HS2 will not be able to instruct the Station Design Team to prepare the planning application, which means that the projects cannot be incorporated into the ITT and delivered as part of the main station construction programme. The impact of this would mean that either the projects are not delivered or they would be delivered 5-10 years after the station is complete. The draft FBC indicates that over 2,500 jobs would not be created if the projects were not delivered or substantially delayed. In addition the costs may increase as works delivered by HS2 would need to be replaced and the potential efficiencies in the costs of materials, procurement and construction would be lost.



Forward EZ Forecast £’000’s

2018/2019 Q1 Q2 Q3 Q4 Total

SLA/Funding agreement profile 550,120 600,046 1,150,166

Current Profile 0 1,125,916 1,125,916

2019/2020 Q1 Q2 Q3 Q4 Total

SLA/Funding agreement profile 0 0

Current Profile 319,956 319,956

2020/2021 Q1 Q2 Q3 Q4 Total

SLA/Funding agreement profile

Funding Agreement/SLA Project End Date 31/ 12 / 2018

Current Forecast Project End Date 31 / 05 / 2019

Variance + / - (months) 5 months

Reason for time variance

Additional time is required for preparing and submitting the planning application, preparing and releasing the ITT and preparing the delivery agreement. This was not included within the original timescales.

Funding Agreement/SLA Forecast Total Project Cost

£1,150,166 Current Forecast Total Project Spend

£1,445,512 Variance + / -

£295,346

Funding Agreement/SLA Total EZ Allocation

£1,150,166 Current Forecast Total EZ Required/Allocated

£1,445,512 Variance + / -

£295,346

Reason for required/allocated EZ variance

Additional funding is required for preparing and submitting the planning application, preparing and releasing the ITT and preparing the delivery agreement. This cost was not included within the original budget.

Funding Agreement/SLA Forecast EZ Claims to date

£550,120 Actual EZ Claimed to date

£0 Variance + / -

£550,120

Reason for claim variance

The invoices have not been paid due to incorrect banking details being provided by HS2.



Current Profile

Key Risks and Issues (showstoppers) Planned mitigation / contingency

HS2 cannot instruct the station design team to prepare the planning application

Ongoing discussions with HS2, station design team and BCC to ensure all information is available to minimise the time required to prepare the planning application

HS2 cannot incorporate the enhanced public realm works within the ITT to procure the station design and build contractor.

Ongoing discussions with HS2 to agree the requirements for the ITT

The delivery agreement between HS2 and BCC cannot be signed. A negotiation framework between HS2 and BCC has been agreed to set out the process and issues for developing the agreement.

Unable to process payments and therefore payment will slip to the next financial year

BCC and HS2 payments systems will be set up correctly to ensure funding can be paid without delay.

HS2 are unable to sign the Council’s charter for Social Responsibility BCC and HS2 procurement officers are meeting to agree the CSR plan and the issue has been escalated.

Critical milestones completed this quarter/year

RIBA 3 designs for the enhanced public realm complete.

Critical milestones DUE but NOT completed this quarter/year

Reason not completed and planned date(s) for completion

N/A N/A



Critical milestones to still be completed Date for completion

GBSLEP Funding Full Business Case submitted January 2019

GBSLEP FBC appraisal February 2019

GBSLEP Board Decision March 2019

BCC Cabinet April 2019

RIBA 3 Design for Curzon Canalside area March 2019

Forecast Outputs (inc date(s), as per

SLA/Funding Agreement) Forecast variance to outputs Reason for variance

RIBA 3 Designs N/A

Full Business Case N/A

Planning consent N/A

Delivery Agreement N/A

Decision required

Define any decision required from PDB e.g. agreement to slip funding or changes to outputs or scope including rational and impact should agreement not be given;

PDB is requested to approve additional funding of £295,346 to prepare the planning application, ITT and Delivery Agreement for the HS2 Curzon Station Enhanced Public Realm project.

Supporting information



Insert/Append any supporting documents/visuals/site plan here

Appendix 1 – HS2 Design Assurance Levels Appendix 2 – HS2 Curzon Station Enhanced Public Realm Costs Appendix 3 – Additional Funding Timeline



GBSLEP use only

LEP Project Champion: Wendy Edwards Project Support: Theo Tsang Report Received Date 08.02.2019

Programme Team Review The FBC for the project is due imminently and this will undergo full Independent Technical Evaluation However HS2 critical path means a decision on this request for additional funding needs a decision to be made before the FBC is submitted and evaluated, therefore to enable continued integration of the enhanced public realm design into the core HS2 scheme and avoid the need for additional work and cost at a later stage it is recommended this change is approved.

PDB Decision Date

ACTIONS

Action By who By when Status 1

2

3

4

Project Risk RAG

Risk type RAG Time Benefits Cost

RAG Status key:

Green On target to hit original forecast (including within agreed tolerance)

Amber Current - No longer on target to meet original forecast & minor impact on the overall project Future – At risk of missing original forecast & minor impact on the overall project

Red Current - No longer on target to meet original forecast & significant impact on the overall project Future – At risk of missing original forecast & significant impact on the overall project

1

Draft Change Request Template v 3

Greater Birmingham & Solihull LEP Local Growth Fund

Project Change Request

Project Name Selly Oak New Road Phase 1B

Organisation Birmingham City Council

Date of Request 27th February 2019

Project Manager Yin Liu Project SRO Phil Edwards

Project Manager

contact details

0121 675 4409

[email protected]

Project SRO

contact details

1 Lancaster Circus Queensway,

PO Box 14439, Birmingham, B2

2JE (Sat Nav B4 7DJ)

0121 303 6467

07557 203167

[email protected]

www.birmingham.gov.uk

Project Manager

signature

Project SRO

signature

Section 1: Project Progress to date

Please include a brief outline of project progress to date. (E.g. milestones achieved expenditure to

date and challenges faced.)

Service Level Agreement Deed of Variation was signed in March 2018.

Detailed design is complete.

Construction works are programmed to start in March / April 2019.

£200k slippage is expected against LGF forecast this year.

Section 2: Change requested

Type of change requested

Check each that apply

2


Project Scope Project outputs/outcomes Project finances

Programme/Timescales Other

Description of

change

£200k slippage is now expected against LGF forecast this year.

Reason for change

request

To seek GBSLEP approval to the revised spent profile for SONR 1B

Alternative options

considered: with

reasons why the

recommended

option is the most

appropriate.

N/A

Detail of

stakeholder

consultation

regarding change

request

The revised spend profile have been reported to GBSLEP via LGF Project Board

meeting.

3


Section 3: Impact of recommended change

Please provide

a description of

the impact of

the

recommended

change

including:

Project cost,

Timescales,

Resourcing,

Benefits,

Quality, Scope

For guidance – find table in grant agreement or business case.

SLA DoV Profile £'000

Previous Years 2017/18 2018/19 2019/20 2020/21 Total

Capital Funding Local Growth Fund 200 230 1656 1547 0 3633 Integrated Transport Block 20 10 0 1000 550 1580

Section 106 0 0 0 2560 2560 Bus Lane Enforcement 450 450

Prudential Borrowing 238 762 1000 Total Capital Funding 220 240 1656 5795 1312 9223 Revenue Funding

Birmingham City Council Approved Budget

0 0 0 0 20 20

Total Revenue Funding 0 0 0 0 20 20

Revised Profile £'000

Previous Years 2017/18 2018/19 2019/20 2020/21 Total

Capital Funding Local Growth Fund 200 230 1456 1747 0 3633 Integrated Transport Block 20 10 0 1000 550 1580

Section 106 0 0 0 2560 2560 Bus Lane Enforcement 450 450

Prudential Borrowing 238 762 1000 Total Capital Funding 220 230 1456 5995 1312 9223 Revenue Funding

Birmingham City Council Approved Budget

0 0 0 0 20 20

Total Revenue Funding 0 0 0 0 20 20

Steps required

to deploy

change

4


Is there an

impact on

Communication

planning?

No

Section 4: To be completed by GBSLEP

Change Request Number

TA Number? LOGASnet number

Date required for response

Deed of Variation required?

Yes No

Date Deed of Variation signed

Recommendation from GBSLEP

Approved Rejected Deferred (detail: )

Justification of decision Change request deferred until final claim is paid out before

end of Q4 18/19. On payment of agreed final claim, change

request will be approved and DoV instructed. If final claim

is not submitted in time for payment by year end 18/19,

change request will be rejected and another change

request will need to be submitted to reflect financial

slippage into 19/20. Finances will need to be re-profiled

accordingly

Decision date 7th March 2019

Does this change impact SEP

objectives?

Does the business case need to be

reviewed and updated, in light of

the change?

Signed LEP Programme Manager/

Project Champion

5


Dated 06/03/2019

Checklist: Updated Project Plan, Updated Risk register

Item 8

1 of 2

Greater Birmingham & Solihull LEP


20th March 2019

Enterprise Zone Projects Health Check Report

Recommendations

The Programme Delivery Board (PDB) is requested to:

note the findings of the health check of Enterprise Zone (EZ) projects (Appendix A); and

note that the implementation of the heath check’s recommendations and remedial actions is

in progress and is being managed through an action log.

Background

1. An independent project health check was commissioned in September 2018 to review the status

of all appropriate live EZ capital projects, as the majority of GBSLEP Programme Delivery Board

members and Programme Management Office (PMO) were not involved in the original project

appraisals or the programme management process.

2. The aim of the health check was to understand project progress to date and identify key issues

and risks that need to be managed moving forward. The expectation of the health check was

not to test whether projects were compliant with the GBSLEP Assurance Framework (which they

were not previously required to be), but rather to advise on any key issues or risks and remedial

action required.

3. A project health check framework was agreed with the consultant, which was used to assess

each of the projects on a risk basis (RAG). The framework covered key project success factors

such as objectives, governance and management, financial management and control,

deliverables, compliance and documentation.

4. The desk based review of documentation commenced in October and discussions with

individual project managers took place through to December. The final report was issued in

January 2019 and is included as Appendix A.

Findings and next steps

5. The review concludes that a good level of progress has been made to date in delivering the

infrastructure improvements across the EZ area. There aren’t any critical issues identified

amongst the projects assessed, albeit a number of them are currently behind schedule.

6. The factors impacting on performance are summarised as:

o negotiation and finalisation of funding and other service level and contractual

agreements;

o project interdependencies and delays in related externally controlled works;

Item 8

2 of 2

o changes in the design of the project following initial feasibility work;

o ascertaining and meeting the requirements of land owners and adjacent uses;

o administrative delays; and

o stakeholder consultation processes.

7. The issues identified in the review are largely in line with expectations and are familiar themes to

those experienced by the Local Growth Fund programme in previous years. Some of key issues,

such as outstanding contractual documentation, had previously been identified by the

Birmingham City Council (BCC) EZ Delivery Team and were in the process of addressing when

changes to the EZ programme management arrangements were introduced.

8. The remedial actions and recommendations within the health check report have formed an

action log that the LEP PMO and BCC are currently using to address issues across individual

projects, prioritising on a risk basis.

9. The majority of the programme-level recommendations are already captured by the GBSLEP

Assurance Framework that EZ projects are now required to adhere to. For those projects that

are in the earlier stages of development, the robust stage gateway review process will ensure

standards are met before proceeding to the next stage and enable clear baselines to be

established for projects.

Conclusions

10. The EZ projects health check has provided an independent review of the relevant EZ projects.

The recommendations and project specific remedial actions are now being progressed by the

GBSLEP and BCC.

Prepared by: Tom Fletcher

Acting Head of Delivery Contact: [email protected]

07860 906438 Date: 5th March 2019


LIVERPOOL Winslow House > Rumford Court > 16 Rumford Place > Liverpool L3 9DG T: 0151 227 5563 M: 07940 540260 LONDON 78 York Street > London W1H 1DP T: 0207 183 6790 www.amion.co.uk AMION Consulting is the trading name of AMION Consulting Limited. Registered Office: Langtons, The Plaza, 100 Old Hall Street, Liverpool L3 9QJ. Company No: 3909897

The Greater Birmingham & Solihull Local Enterprise Partnership (GBSLEP)

Enterprise Zone Projects Health Check Final Report January 2019

http://www.amion.co.uk/


Enterprise Zone Projects Health Check - Final Report January 2019


Enterprise Zone Projects Health Check

Final Report January 2019

Reviewed and approved by:

Signature(s): Name(s): Graham Russell Job Title(s): Chief Executive

Date: January 2019

AMION Consulting is the trading name of AMION Consulting Limited Registered Office: Langtons, The Plaza, 100 Old Hall Street, Liverpool L3 9QJ Company No: 3909897 Tel: 0151 227 5563 This document including appendices contains 49 pages Ref: K:\CLIENTS\GBSLEP\EZ Projects Health Check\Deliverables\GBSLEP Health Check Report 240119 Final.docx


Enterprise Zone Projects Health Check - Final Report

January 2019

Contents

1 Introduction ................................................................................................................... 1

1.1 Purpose of the report ................................................................................................................... 1

1.2 Our approach ................................................................................................................................ 2

1.3 Structure of the report contents................................................................................................... 3

2 The Enterprise Zone Programme ..................................................................................... 4

2.1 Overview of the programme ......................................................................................................... 4

2.2 EZ projects currently being delivered ........................................................................................... 5

2.3 Governance arrangements ........................................................................................................... 7

2.4 Programme and financial management ....................................................................................... 8

2.5 EZ approval and monitoring processes ......................................................................................... 9

3 Assessment of the projects ........................................................................................... 11

3.1 Overview ..................................................................................................................................... 11

3.2 Delivery timetable ....................................................................................................................... 12

3.3 Project management and administration ................................................................................... 13

3.4 Overall progress assessment ...................................................................................................... 15

4 Conclusions .................................................................................................................. 18

4.1 Summary of factors impacting performance .............................................................................. 18

4.2 Recommendations for the programme ...................................................................................... 18

Appendix A – Project level Assessments



1

1 Introduction

1.1 Purpose of the report

The Greater Birmingham and Solihull Local Enterprise Partnership (GBSLEP) Executive has determined that programme management of the Birmingham and Curzon Enterprise Zone (EZ) should now be undertaken ‘in-house’ by the GBSLEP Programmes Team instead of the EZ team within Birmingham City Council (BCC). BCC will continue to manage individual project delivery where they are the funding recipient.

The GBSLEP commissioned AMION Consulting to undertake an independent review or health check of the projects, as they were not involved in the original appraisal or programme management process, to understand progress to date and identify key issues and risks that need to be managed moving forward. The projects reviewed comprise:

• Former Curzon Station

• One Station/Moor Street Queensway

• Making the Connections/Southside Link

• HS2 Curzon Station Public Realm

• Curzon Metro Stop

• Digbeth High Street Remodelling

• Metro Extension to Centenary Square

• Complementary Highway Works – Navigation Link

• Centenary Square (Phase 1 – 3)

• Pinch Point – Ashted Circus

• Ladywell Walk (Closure) Hurst Street TRO FBC

• Birmingham Smithfield

It should be noted that this list does not include all EZ projects that have been approved to date. A small number of projects were excluded from the review as a result of other work currently being undertaken or because they were revenue projects. Projects outside scope, included:

• Paradise – this project has been excluded as a revised FBC is currently being appraised independently;

• Snow Hill Public Realm – the FBC for this project is also currently being independently appraised;

• Relocation Services (BSF 1601) – revenue project

• Sector Sales (BSF 1602) - revenue project

• MIPIM (BSF 1804) – revenue project



2

1.2 Our approach

Following an inception meeting and agreement on the projects to be reviewed, a template was prepared to guide the review of each project – in terms of progress, risks and proposals for necessary remedial action.

Based on the GBSLEP brief for the review, the key stages for each project involved:

• a review of appraisal documentation including its conformity with the LEP Assurance Framework and the adequacy of the business case presented for each project with reference to HM Treasury’s 5-cases structure (e.g. strategic, economic, commercial, financial, and management) and whether this has been fully reflected at appraisal stage. It was recognised however that many of the original applications, appraisals and approvals pre-dated the current LEP assurance processes and were not formally expected to conform with the LEP framework. Where relevant, the review considered whether:

• outputs have been appropriately quantified and, where possible, monetised in accordance with HM Treasury Green Book guidance, including that the additionality of outputs for each project has been properly considered;

• attention has been given to the persistence of the economic benefits for each project and whether wider benefits have been identified;

• a comprehensive and robust investment appraisal has been conducted for each project, including the calculation of Net Present Value (NPV) using a discounted cash flow (DCF) method; and

• the strategic risks and associated risk mitigation measures have been identified and have informed the appraisal process.

• a review of contract documentation - to ensure that all contracts or other agreements fully reflect the basis of the funding approvals given and are adequately reflected in the text. This will also need to consider whether requirements have been adequately cascaded through any sub-contracting processes;

• a review of project status reports to assess the degree to which they are realistic, sufficiently comprehensive and adequately consider risks and dependencies (including interdependencies between projects);

• following completion of the above reviews of documentation, face-to-face or telephone discussions were held with all project managers to discuss project progress and issues arising from the documentation review (including their status reports); and

• preparation of a summary assessment for each project identifying expenditure to date; adherence to timetables; the appraisal and approval processes; project documentation; progress to date, delivery and benefit realisation; and overall risk. The assessments used a red, amber, green (RAG) rating.



3

1.3 Structure of the report contents

The remainder of this report is set out in the following sections:

• Section 2: provides an overview of the Birmingham and Curzon EZ programme and the processes and procedures in place to appraise, approve, and monitor projects that have been successful in securing funding from the programme;

• Section 3: outlines progress and expenditure to date for the projects under review and the extent to which procedures are in place to monitor performance and risk on an ongoing basis. Where necessary remedial action has been identified for a number of projects to ensure that the projects remain on track for delivery; and

• Section 4: provides a summary of the key factors that have impacted performance to date, and recommendations for improving management and delivery arrangements moving forward alongside actions already being implemented to ensure that the projects conform to the new project management arrangements that will be implemented by GBSLEP in line with their assurance framework.



4

2 The Enterprise Zone Programme

2.1 Overview of the programme

Since its establishment in 2011, the EZ has been a key driving force in facilitating the accelerated transformation of the City Centre – one of the region’s most important economic assets. It has attracted £511 million of private sector investment, brought forward over 185,000 sqm of floorspace and delivered close to 3,800 jobs in a range of occupiers including for example HSBC and HS2 Ltd. As part of the West Midlands Devolution Deal in 2015, the EZ was extended to include the Curzon area, taking the number of strategic sites from 26 to 39. The 2016 Curzon Investment Plan described a £724 million programme to be funded through the projected growth in business rates generated within the EZ sites managed though a financial model.

The draft Enterprise Zone Investment Plan (EZIP) 2018 sets out the next steps in creating the conditions for economic growth over the period 2018-2028, through a phased programme of investment for major schemes and infrastructure. It describes how investment will continue to accelerate development across the EZ to maximise the potential of HS2 arriving in 2026 and the expansion of the Midland Metro Tram network from the City Centre through East Birmingham to North Solihull and UK Central. With nearly £1 billion of planned investment, GBSLEP and BCC aim to unlock the delivery of 1.1 million sq m of new commercial floorspace, create over 71,000 new jobs and contribute £2.3 billion GVA per annum (p.a.) to the economy. Ensuring that both residents and businesses share in the benefits that will be generated, will be of paramount importance.

While the draft 2018 EZ Investment Plan consolidates the two existing investment plans: City Centre EZIP (2014) and the Curzon Investment Plan (2016), the EZ will continue to focus on 39 sites across the city (covering 113ha), with the most significant opportunities for growth. The strategy will focus on delivering a phased programme of £480 million of projects over the next ten year period 2018-2028. The programme aims to unlock the major growth opportunities by removing barriers to development, creating a supportive environment for investment, job creation and growing the city and regional economy. It will be supported by a set of financial principles by which investment decisions to allocate EZ resources are made and robust governance arrangements to oversee the programme. The key areas for investment will be:

• Strategic Site Investment

• Infrastructure

• Business Support

The proposed phased investment programme as set out in the new draft plan (shown in Table 2.1) has been structured as follows:

• accelerating current activity (Phase 1-3);

• maximising early opportunities Investment for HS2 (Phase 4-5);

• longer term strategic priorities (Phases 6-9).



5

Table 2.1: Phased Investment Programme

Programme Phase Timescales Project list Capital Spend

1 2013-2024 Current commitments £187,455,435

2 2014-2023 Paradise £49,450,000

3 2014-2020 Westside Metro £4,474,000

4 2018-2026 HS2 Station Environment £60,000,000

5a 2019-2022 Digbeth Public Realm £15,000,000

5a and 5b 2019-2027 Digbeth Public Realm £70,900,000

6 2019-2023 GBSLEP Investment Fund £20,000,000

7 2022-2026 East Birmingham Metro £183,300,000

8 2028-2046 Curzon Programme £372,992,239

9 2028-2046 HS2 Interchange £20,000,000

Total 2013-2046 All Phases £983,571,674

Source: Enterprise Zone Investment Plan, June 2018

2.2 EZ projects currently being delivered

The EZ projects reviewed as part of this health check, largely fall into Phase 1, although early stage feasibility, development and design work has started in relation to Phase 4: HS2 Station Environment (e.g. Moor Street/Queensway; HS2 Curzon Public Realm; Curzon Metro Stop) and Phase 5: Digbeth Public Realm (e.g. Digbeth High Street Re-modelling).

The projects approved to date, relate to the following developments - as described in the 2018 Investment Plan:

• Metro Extension - to support the integration of the Westside area with the wider City Centre Core, the Metro will be extended from Birmingham New Street to Centenary Square linking directly with the major developments at Arena Central and Paradise.

EZ Allocation £15.95m Timescale Operational in 2019

• Centenary Square - the redevelopment of Centenary Square will provide high-quality public realm and world class setting to those landmark buildings and developments around it, such as the new Library of Birmingham, ICC, Arena Central and Paradise. The Square will not only continue to provide an attractive environment for existing business and visitors but its iconic design will attract new visitors to the area and support business investment in the wider area.

EZ Allocation £10.55m Timescale 2019

• Birmingham Smithfield - the vision, as set out in the Smithfield Masterplan, is to create a landmark, sustainable, mixed use development including a family leisure hub, supported by retailers, restaurants, hotels, SME office space, new retail markets and public spaces as well as a residential neighbourhood and integrated transport facilities. The scheme will be the largest single city centre redevelopment site in the UK and will deliver 3,000 jobs, 2,000 new homes and 300,000 sq m of new floorspace for a mix of uses.

EZ Indicative Allocation £35m Timescale 2019 Approval



6

• One Station – The One Station project will develop proposals to provide an improved passenger transfer between New Street and Moor Street stations and the Birmingham Curzon HS2 Station. This route is the most direct for pedestrians and cyclists between the stations and is currently used by approximately 1.4 million rail interchange passengers per annum; this is forecast to nearly double to 2.3 million per annum with the arrival of HS2 in 2026. EZ funding has been allocated for initial feasibility work and proposals will be taken forward in conjunction with plans to remodel Moor Street Queensway to create a high-quality public space in front of the new HS2 station and a connection with New Street Station.

EZ Allocation £1m Timescale OBC 2018; Phased delivery 2019-2026

• Southside Public Realm – Recognising the important interface and connection to the EZ’s largest site at Smithfield, in 2016 approvals were granted to fund a permanent Traffic Regulation Order to close part of Ladywell Walk and Hurst Street to through traffic, as well as £600,000 of funding to develop proposals for the public realm works in this area. The Southside Link will provide the transformation of the route from New Street Station via Southside to Birmingham Smithfield with the creation of a safe and attractive pedestrian and cycle route. The Link will extend the highway improvements to Hill Street and Navigation Street that were delivered as part of the New Street Station project. The preferred option has been agreed and additional EZ funding of £9.5m has been allocated to deliver the scheme.

EZ Allocation £10.6m Timescale 2020

• Enterprise Zone pinch points – The A4540 Ring Road provides vital vehicular access to development sites within the EZ, linking the City Core with the main radial routes serving the City and the Strategic Road network. The road suffers from severe traffic congestion, which is projected to increase significantly by virtue of the EZ developments. Therefore significant investment is required to improve capacity at key locations along the Ring Road. The investment is focussed on the following areas: Bordesley Circus; Haden Circus; Ashted Circus; Holloway Circus.

EZ Allocation £4m Timescale All works complete by 2020

• Former Curzon Station – Located right next to the new HS2 Curzon Station building, the Grade 1 listed former Curzon Station building is an important heritage asset that was once the world’s first mainline passenger terminus. HS2 and the EZ are jointly funding the redevelopment of the building to bring it back into use as a visitor and information centre for the whole HS2 project, along with office and educational space for other occupiers. It marks the first phase of regeneration activity linked to HS2 and the Curzon Programme which will create a focal point and legacy asset for the area.

EZ Allocation £2m Timescale 2019

• HS2 Curzon Station Public Realm - The Curzon Masterplan (2015) set out how the arrival of HS2 and the growth and regeneration opportunities around the terminus station could be unlocked. Covering 141ha of the City Centre, with the area centred on the HS2 Curzon Station, the strategy of the Masterplan is to deliver a fully integrated and connected world class station, which will support growth and regeneration for the City Centre and the wider area. EZ



7

funding is allocated to develop and deliver the Big Moves including: Paternoster Place; Curzon Promenade and Curzon Square; Station Square and Moor Street Queensway; Curzon Station Metro Stop.

EZ Allocation £60m Timescale Design 2018-2020; Delivery 2021-2026

• Digbeth Public Realm - In order to attract investment and maximise the potential of the Curzon area improvements to the quality of the public realm including safe and attractive walking and cycling routes, parks and other outdoor spaces is needed. Key to maximising the impact of HS2 will be ensuring these connections and environments are of the highest quality. The first phase of activity will focus on Digbeth High Street, which is dominated by pedestrian barriers and few crossing points across six lanes of traffic and is a key investment priority for unlocking growth. Many sites along the road are underutilised and have not benefited from the natural growth of the City Core, leaving pockets of activity isolated and with relatively low foot-fall.

EZ Allocation £15m (High Street) Timescale Preferred option 2018, Delivery 2020-23

2.3 Governance arrangements

Delivering the transformational programme of investment and outcomes for the EZ requires robust governance and programme management. The EZ governance arrangements and roles and responsibilities are described in Figure 2.1 and the text below, although it should be noted that the EZ Executive/Directors Boards were superseded in August 2018 by the GBSLEP Programme Delivery Board:

Figure 2.1: EZ Governance

• GBSLEP Board – has overall strategic ownership of the EZ and for setting and approving the EZ investment plan. It does this by setting an overarching investment strategy and ensuring that there are clear governance, management and delivery arrangements in place;



8

• BCC – management and redistribution of the business rate growth from the EZ requires a single statutory body from the GBSLEP Board to take on the role of ‘Accountable Body’. BCC is the accountable body for the EZ and is obliged to manage investments and their financing;

• GBSLEP Programme Delivery Board – the GBSLEP Board initially delegated programme management responsibility, including decision making on full business cases, monitoring and performance management, to the EZ Executive Board. However, this responsibility has now been taken over by the GBSLEP Programme Delivery Board. This board is charged with ensuring the delivery of the EZ and Growth Deal (Local Growth Fund and Revolving Investment Fund) to help achieve the objectives of the Strategic Economic Plan. It also oversees progress on delivery of the City Deal and Growing Places Fund. It has authority from the Board to make investment decisions up to £10m in value. Membership of the Board has been extended to include representatives from the EZ Executive Board to ensure continuity;

• EZ Directors Board – this Board was initially established to provide co-ordinated management of the EZ linked to the provision of resources and wider project delivery. It operated until August 2018 but the role of the Board has since been taken over by the LEP Programme Delivery Board. The Board was chaired by BCCs nominated officer and included a GBSLEP senior member of staff and senior level BCC officers responsible for delivering the EZEB endorsed projects; and

• Curzon Partnership Board – this Board has responsibility for developing and maintaining the important local partnerships, co-ordination and leadership to progress the implementation of the Curzon Investment Programme – providing a mechanism to engage relevant development and landowner interests in the area in support of delivering growth. The Board oversees the development of projects prior to consideration by the Programme Delivery Board.

2.4 Programme and financial management

To date, all delivery, development and management of the programme has been led by the EZ Delivery Team and Accountable body:

• EZ Delivery Team within BCC – led by the Head of Delivery the team provides a multi-disciplinary professional service that ensures robust processes are in place for project development, funding applications, monitoring and performance management. Moving forward, the EZ delivery team will retain responsibility for developing and delivering EZ projects, but responsibility for the overall programme management and monitoring will pass over to the Programmes Team at the LEP.

• Accountable Body – BCC acts on behalf of the GBSLEP Partnership to manage and redistribute the business rate growth from the EZ. Within the EZ where capital expenditure is to be finance, BCC will facilitate the borrowing. The council will calculate the borrowing costs using its existing arrangements for recharging costs (i.e. interest and the statutory requirements for debt repayment). These borrowing costs will be funded from EZ revenue resources generated from the additional business rates.



9

The EZ financial model has evolved since its inception to a more sophisticated position. In developing the EZIP 2018, the business rates which are expected to be generated from each EZ site have been reviewed to ensure income projections are accurate and in line with the profile of future development, particularly with a number of schemes on-site/completing and creating business rates i.e. Paradise, Snow Hill 2 and 3, Arena Central and Beorma. Based on this review phases 1-5a of the investment programmes are assessed to be affordable and full business cases can be developed for each project.

Further phases will be brought forward as the level of development on the EZ sites increases and the growth in business rates income is secured. Each project will be supported by a business case which clearly identifies how the projects will achieve its objectives, deliver the benefits and manage any risk. All funding approvals will be supported by an appropriate legal agreement which protects the interests of the EZ and ensures the applicant is responsible for meeting its obligations.

2.5 EZ approval and monitoring processes

2.5.1 The application and appraisal process

The initial EZ application, appraisal and approval process managed by the BCC EZ Programme Manager is outlined in Figure 2.2 below:

Figure 2.2: EZ Funding Approval Process

The flow chart demonstrates that for each project application, a range of documents were required by projects at each stage of the process, including:



10

• the relevant application form/and any subsequent change variation forms;

• an appraisal report;

• an EZ Board Paper with proposed recommendation; and

• a letter/draft funding agreement (if successful).

The EZ programme management team developed a series of application forms, separate annexes to record expenditure and outputs, and guidance notes for each type of application1, which required varying levels of detail, proportionate to the level of funding being requested.

As the EZ programme has developed over time, so too have the requirements for project application and appraisal processes managed by LEP partnerships. This follows the introduction of Assurance Frameworks in 2014, to demonstrate that the LEPs had the necessary systems and processes in place to manage delegated funding from central Government budgets effectively. While the Assurance Framework guidance has since been updated again, most recently in 2017-18, the focus remains on implementing practices and standards which are necessary to provide Government and local partners with assurance that decisions over funding are proper, transparent, and deliver value for money.

As a result, all EZ applications are now being appraised and monitored in line with the GBSLEP assurance framework. This describes the application, appraisal, contracting and monitoring procedures in greater detail, and includes examples of all documentation that needs to be completed and retained by project sponsors from the pre-application stage through to the final project evaluation. The procedures for example require all project expenditure to be supported by a Full Business Case that is compliant with HM Treasury’s Green Book Standards (and the five-case business case model).

2.5.2 Future programme management and project monitoring

During the development of the Draft 2018 Investment Programme, a comprehensive review of all aspects of programme management was undertaken, including: the financial principles and model; business rates development phasing; the programme database and team resources; reporting; due diligence; governance and monitoring. The decision to separate the overall programme and performance management function from the development and delivery of the programme followed the outcome of this review.

As this responsibility moves over to the LEP, it is envisaged that the results of this review will be used to identify actions required by the existing EZ projects approved to date, to assist the transition process and compliance with GBSLEP’s current assurance framework2 (and the policies and procedures within it).

1 Development Funding; Full Application; Site Development and Access Funding (although it should be noted that these applications are

subject to a different appraisal mechanism) 2 GBSLEP Assurance Framework V3, 22/11/2018



11

3 Assessment of the projects

3.1 Overview

In total thirteen capital projects have been reviewed3 as part of the Health Check, comprising seven applications for development funding to carry out feasibility/design work, and six full applications. The projects fall into the following categories:

• 1 strategic site project

• 10 infrastructure projects

• 2 business support

In total £41.95 million EZ funding has been approved for the projects that are the subject of this review. Additional EZ funding has been spent for example £87m on the Paradise Development, but this is not within the scope of the health check. Of the 13 projects approved only 2 have yet to start. There have been slippages with a number of other projects, as set out in the next section that will need close monitoring as the programme moves forward, as subsequent phases of development are dependent on their completion.

As shown in Table 3.1, the breakdown of the £41.95m EZ funding shows that £30.57m has been spent to date.

Table 3.1: EZ Expenditure

Project Name Ref Project Type EZ Budget EZ Funding Approved

Expenditure to date 4

Former Curzon Station SIF1707 Full Application

Strategic site £2m £0

Making the Connections/Southside Link

IFD1502/ IFD 1504

Development Infrastructure £84,000 £391,500

£171,847

Moor Street Queensway/One Station

BSD1803

IFD1403

Development Business Support

Infrastructure

£220,789

£1m (On Hold)

£220,789

HS2 Curzon Station Public Realm

IFD1703 Development Infrastructure £1.05m £550,120

Curzon Metro Stop

IFD1801 Development Infrastructure £946,005 £0

Digbeth High Street Remodelling

IFD1802 Development Infrastructure £710,366 £195k

Metro extension to Centenary Square

IFF1409 Full Application

Infrastructure £15.95m

£4.474m

£15.95m

Complementary Highway Works

IFF1305 Full Application

Infrastructure £251,800 £251,800

3 Making the Connections and Southside Link were merged in early 2018 4 To the end of September 2018 (Q2)



12

Centenary Square IFF1604 Full Application

Infrastructure £10.55m £9.45m

Pinch Point – Ashted Circus IFF1607 Full Application

Infrastructure £2.298m £2.298m

Ladywell Walk IFF1702 Full Application

Infrastructure £920,000 £612,978

Birmingham Smithfield BSD1609 Development Business Support

£1.1m £870k

TOTAL £41.95m £30.57m

While the total EZ funding approved represents the total cost for many of the projects, a small number included contributions from other sources. These include:

• Former Curzon Station – Total Cost £4m - EZ Contribution £2m; HS2 Ltd £2m

• Digbeth High Street Remodelling – Total Cost £770k – EZ Contribution £710m; TfWM £60k

• Metro extension to Centenary Square – Total Cost £34m – EZ Contribution £18.65m; LTB £4.85m; WMCA £6m; Third Party Contribution £4.7m (as set out in the funding agreement, which includes business case development costs)

The following sections provide an assessment of the projects – with regard to their delivery timetable; project management and administration (with regard to the application, appraisal and approval processes and project documentation); and an overall assessment of progress particularly in terms of delivery and risks. The assessment uses a red, amber, green (RAG) rating, where green indicates that a project is on track, with no remedial action required and no risk to the delivery of the project; amber indicates that there are some issues that need to be resolved and red indicates that action/close monitoring is required as there are key issues with the project that are likely to impact on their delivery.

3.2 Delivery timetable

As shown in Table 3.2, eight projects approved to date are currently running behind schedule. This ranges from 9 months to over two years (for example, Southside Link/Making the Connections). As a number of the projects are interlinked, slippages with some projects are having a knock-on impact on others. The reasons given for the timetable delays include changes to the design of the project, legal complications and delays in external factors (beyond the projects’ control, such as HS2). It is evident therefore that the overall programme delivery timetable will need to be kept under close review, to ensure that subsequent development phases will be able to proceed as planned.

Table 3.2: Timetable for completion

Project Name Ref Rating Comments/key issues

Former Curzon Station SIF1707 Significant slippage – original end date Aug 2018 now revised to Feb 2020

Making the Connections /Southside Links

IFD1504/ IFD1502

Significant slippage – project running 18-24 months behind schedule. FBC decision Oct 2019



13

Moor Street Queensway /One Station

BSD1803/ IFD1403

Slippage but masterplan forecast for delivery March 2019. One station on hold.

HS2 Curzon Station Public Realm IFD1703 The design works are on schedule. FBC currently being finalised.

Curzon Metro Stop IFD1801

The design project is now well progressed, but there has been some slippage due to extended legal discussions.

Digbeth High Street Remodelling IFD1802 Outline design stage completed. Some slippage due to initial project delays and continuing issues in finalising the Grant Funding Agreement.

Metro extension to Centenary square

IFF1409 On track for completion and delivery of passenger services from Dec 2019

Complementary Highway Works IFF1305 Slippage due to redesign of the project. To be completed in conjunction with Metro extension works

Centenary Square IFF1604 Significant slippage – the project is currently 9 months behind schedule, but due for completion in June 2019

Pinch Point – Ashted Circus IFF1607 The project is progressing well and is currently on track to finish in March 2019. All milestones achieved to date.

Ladywell Walk IFF1702 Project largely completed. Final account settlement expected Jan 2019.

Birmingham Smithfield BSD1609 On track for the final deliverables, but currently running a year behind.

3.3 Project management and administration

The EZ projects approved to date are currently being managed by dedicated project managers from Planning and Regeneration (BCC), Transportation and Connectivity (BCC) and Travel for West Midlands (WMCA). As such their management and administration procedures, for example with regard to procurement and financial control currently operate in line with Local Authority Standing Orders and Regulations. Following the transfer of project management responsibilities to the GBSLEP it is envisaged that these core procedural requirements will continue to apply, alongside the LEP procedures set out in its Assurance Framework.

As the projects reviewed comprised a mix of both development and full business case applications, the level of project documentation available was variable. However, the desk-based review of the documentation provided to date, and through consultations, did highlight a number of key issues:



14

• for a number of projects, final versions of the application forms have not been provided (and a number still have track changes) and some applications do not have signatures from the project manager;

• where available, appraisal documents provided were primarily checklists, rather than full assessments of the project;

• only a limited number of approval letters have been supplied and there are similarly only one or two projects which have provided copies of Grant Funding Agreements;

• absence of Service Level Agreements – for projects managed by BCC officers, historically SLAs were not put in place. Work has been underway with BCC’S legal department to create an SLA template for use between the EZ and BCC delivered projects;

• quarterly project monitoring/management forms have been completed, but the risk assessment related to expenditure to date, the timetable and achievement of benefits is variable and inconsistent across the projects; and

• very few projects have been completed to date but where they have finished, project completion reports have not been provided, although we are aware that the Transport and Connectivity department require projects to complete PIR reports for Cabinet, to ensure that lessons are learnt for subsequent projects.

These deficiencies in the information provided in part reflect changes in programme administration arrangements that have evolved over the duration of the programme. There is therefore a need to ensure much better systems are in place for retention of necessary documentation and we aware that steps are being taken to ensure that these are in place, in line with the Assurance Framework. It will be is important that suitable service level agreements and grant funding agreements are put in place where they do not exist at the moment.

An example of these changes, as described earlier in Section 2.5, relate to the evolution of the EZ application and approval process since the start of the programme in 2011 and the first set of project approvals in 2013/14. The Full Business Cases that have been required by Birmingham City Council, in support of Cabinet reports, do not follow the five-case business case model which was only introduced by HM Treasury in 2015. While the application forms still do not cover all aspects of the Treasury 5 cases (i.e. strategic, economic, commercial, financial, and management cases) they do request information related to – purpose, strategic fit, project management, linkages/dependencies, risks, options, finance, benefits, evaluation, sustainability and monitoring. Table 3.3: Business Case/adequacy of the supporting documentation

Project Name Ref Rating Comments/key issues

Former Curzon Station SIF1707 Delayed contractual agreements have resulted in substantial delays to the project. Final copies of documents/application to be retained.

Making the Connections /Southside Links

IFD1504/ IFD1502

Project only at development stage.



15


BSD1803/ IFD1403

Project only at development stage. One station on hold, no documentation provided.

HS2 Curzon Station Public Realm IFD1703

Grant Funding Agreement required and final, signed copies of documents to be provided/ retained.

Curzon Metro Stop IFD1801

An SLA needs to be agreed and efforts to agree the Grant Funding Agreement escalated.

Digbeth High Street Remodelling IFD1802 Finalisation of the Grant Funding Agreement required. Final and signed copies of documents to be provided/retained.


IFF1409 Project supported by a Full 5 case Business Case with options assessed and BCR provided. Funding agreement between BCC and WMCA signed.

Complementary Highway Works IFF1305 Feasibility/design stage complete. Signed copy of S278 legal agreement required.

Centenary Square IFF1604 Good level of application documentation provided. Rephasing information, a copy of the commercial settlement agreement, and revised risk register required.

Pinch Point – Ashted Circus IFF1607 Very good level of supporting documentation provided including a Full 5 case Business model. Project also in receipt of LGF and compliance with LEP assurance framework.

Ladywell Walk IFF1702 Good level of supporting documentation provided and evidence of additional reports held on-line.

Birmingham Smithfield BSD1609 Service level agreement required.

3.4 Overall progress assessment

Table 3.4 presents an overall summary assessment of the projects’ progress to date and risks going forward. Mitigation measures and lessons learnt for the ongoing administration and management of the programme are provided in the next section.

Table 3.4: Project assessment

Project Name Ref Rating Assessment

Former Curzon Station SIF1707

The project has been subject to substantial delay due to contractual issues. It is understood that these issues are close to being resolved. However, there is a risk that continuing delays could affect the ability to successfully deliver the project - for example due to cost inflation.



16

Southside Link/Making the connections

IFD1504/ IFD 1502

The project has been subject to delay but now appears to be on course to deliver an approved scheme by October 2019. Risks that may potentially lead to further delay are being actively managed and relate to outstanding factors that may impact upon the detail of the final design.

Moor Street Queensway/One Station

BSD1803/ IFD 1403

The project has been subject to delay as a result of the HS2 station design delays. Risks that may potentially lead to further delay have been identified. They primarily relate to external factors and are under active review.


IFD1703 The project is broadly on target, although the legal agreement remains to be finalised.

Curzon Metro Stop IFD1801 The design project is now well progressed although there has now been some slippage and the legal agreement remains to be finalized.


IFD1802

Outline Design stage completed but some slippage due to initial project delays and continuing issues in finalising the Grant Funding Agreement.


IFF1409 A dedicated project manager is in place within TfWM with responsibility for monitoring progress on a daily basis – to ensure that there is a client contractor relationship with the MMA. A detailed work programme with key milestones is in place and the project remains on track for testing and commissioning to start in October/November 2019 with a view to passenger services commencing in December 2019. Delivery risks are being actively monitored and managed by the project manager following delays associated with the ENGIE main works in Centenary Square.


IFF1305 The feasibility/developmental work is now complete and a less costly option – Swallow Street will be delivered instead of the original Navigation Street works. Responsibility for implementation/delivery has passed to TfWM. The project manager (Infrastructure Projects Delivery Team) is in regular contact with TfWM/MMA to work through the metro programme and action works for the delivery of the Swallow Street. The project is on site, and works are being phased alongside the Metro Extension to Centenary Square and the Paradise Development Programme during 2019.

Centenary Square IFF1604

This project cannot be brought back on track and is currently projected for completion by June 2019. The risk register and programmed works have been updated and require careful monitoring and oversight at a senior level to ensure that further cost over-runs are minimised.

Pinch Point – Ashted Circus

IFF1607 Project is progressing well and the preferred option (new traffic signal junction layout) is expected to provide the traffic benefits to support economic growth (a new employment development is already being progressed next to the new traffic junction). The junction is expected



17

to offer scope for traffic flow management, by linking traffic signals along the ring road between Dartmouth Middleway and Bordesley Circus.

Ladywell Walk IFF1702 The construction works associated with this scheme are now complete, enabling the other public realm improvements to the Hippodrome Square. The project – part of the EZ Connecting Economic Opportunities Programme – will provide a safe and attractive route between New Street Station and Birmingham Smithfield in the Southside area.

Birmingham Smithfield BSD1609 The project has currently slipped by over a year although it is forecast that this slippage will be made up. It has involved the management of a very large and complex procurement process.



18

4 Conclusions The assessments provided in the previous section demonstrate that a good level of progress has been made to date, and is continuing to be made, in developing a range of infrastructure improvements that will facilitate future business investment and growth across the Enterprise Zone Area. Approximately 75% of the EZ funding approved to date has been spent and while a number of projects are currently behind schedule, for a range of reasons summarised below, construction works have been reprofiled and delivery is being closely monitored by project managers to ensure that projects will be completed without any further significant cost overruns.

While the review found considerable variation and at times, lack of consistency with regard to the production and retention of documentation, it is recognised that this is partly due to the evolution of systems over time and the introduction of more thorough processes that have accompanied, for example, the implementation of assurance frameworks. Prior to the programme management responsibilities moving over to GBSLEP, it will be imperative that key, outstanding documentation such as service level agreements and grant funding agreements are put in place as a matter of priority.

4.1 Summary of factors impacting performance

As noted earlier there has been slippage in the delivery timetables for a number of the projects that have been allocated and awarded EZ funding. The factors causing these are described below, and provide valuable lessons for the ongoing and future administration and management of projects:

• negotiation and finalisation of funding and other service level and contractual agreements;

• project interdependencies and delays in related externally controlled works – for example, HS2; Network Rail/Metro Extension to Centenary Square/Public Realm works;

• changes in the design of the project following initial feasibility work;

• ascertaining and meeting the requirements of land owners and adjacent uses;

• administrative delays – for example, delays in approvals; appointment of consultants; and

• stakeholder consultation processes – including statutory/public consultations with residents, businesses and partner agencies.

4.2 Recommendations for the programme

Based on the findings of the projects reviewed, it is recommended that the following key issues be taken on board as part of the ongoing administration and management of the programme:

• the time taken to approve contractual arrangements should be monitored and appropriate action, such as escalation, taken to expedite processes;



19

• introduction of more stringent risk assessment processes – including for example closer working between project managers to ensure that inter-project dependencies are fully recognised and accounted for;

• undertake and provide a review of costs across all projects on a regular basis;

• ensure that new projects set realistic timetables that take into account the time required to gain approvals, carry out consultations and negotiate appropriate contractual agreements;

• ensure that all project managers are aware of, and follow, the LEP policies and procedures underpinning the assurance framework, particularly in relation to risk management and monitoring and evaluation – for example through the delivery of a training session for new and existing project managers; and

• ensure that project managers retain a standard/consistent level of project documentation at each stage – i.e. project application, appraisal, approval, implementation and evaluation – in line with those recommended for growth deal funding for example.



Appendix A – Project level Assessments



Project level Assessments This section provides an assessment for each project reviewed – in terms of their progress to date, expenditure, timetable, application process

Former Curzon Station

Project: Former Curzon Street Station Refurbishment Ref

Description: The project involves the proposed refurbishment of the former Curzon Street Station, which is a Grade 1 Listed Building. The refurbishment works are to be funded 50:50 by EZ funding and HS2 Ltd. Birmingham City Council is to dispose of the property on a 125-year lease to HS2 Ltd; who will provide a sublease to Birmingham City University (BCU) and Historic England on a peppercorn rent. BCU are to take on the internal repair liabilities for the building. HS2 Ltd will procure the works through its Enabling Works Contract for Curzon.

Progress to date

Currently delayed pending agreement of Service Level Agreement (SLA) and other legal agreements

Funding Allocated

EZ grant - £2m

Total cost - £4m

Expenditure to date

Nil

Original Timetable for completion

Proposed start date – 01/09/17

Proposed end date – 31/08/18

Revised timetable for completion

Start on site - Jan 2018

Project and financial close – Feb 2020

Commentary and issues (e.g.) Rating Action required

Application/ Appraisal/ Approval

An unsigned copy of the Full Project Application Form has been provided to date. This sets out details of the proposed project and of alternative options, including forecast jobs created and safeguarded.

The application is supported by a design report setting out the design development work to RIBA Stage 3 – Developed Design prepared by Atkins on behalf of HS2 Ltd. A Commercial Deliverability Report (albeit in draft) has also been provided prepared by Savills, along with a cost plan. The latter is in the form a simple spreadsheet.

No appraisal report has been provided to date.

• Final copies of documents should be retained/provided

• Signed copies of application forms should be retained/provided

Contract Documentation

The contractual requirements are understood to be the main reason why the project has been delayed by over a year despite the project otherwise being able to progress with the two sub-lessees still understood to be keen to occupy the building once refurbished.

The four areas where contractual conditions are still outstanding are as follows:

• Contractual agreements have resulted in substantial delays. The time taken to approve contractual arrangements should be



(i) A Service Level Agreement (SLA) has been under consideration for many months although it is understood that progress is being made. The draft SLA provided includes, for example, a provision that the applicant should notify the funder if the costs change by +/- £20,000 against the Estimated Financial Profile. This seems to be a very low variance (0.5%) compared with the total project cost;

(ii) Grant Funding Agreement - BCC is understood based on discussions to have agreed a draft funding agreement with HS2 Ltd. However, HS2 Ltd is required to accept the terms and conditions of the Birmingham Business Charter;

(iii) BCC lease to HS2 Ltd – this has been subject to negotiation and is understood to now be agreed but not signed pending completion of the SLA and GFA. The requirement for HS2 Ltd to secure HM Treasury approval to enter into a 125 year lease is understood to have taken a significant amount of time; and

(iv) HS2 sublease to BCU and Historic England – it is understood that the two proposed tenants remain committed to taking up accommodation in the project

The project manager has indicated that these are now close to agreement.

monitored and appropriate action taken to expedite the process, although it is understood that much of the delay has been due to HS2

Project progress, delivery, benefit realisation

The project has, as noted, been subject to substantial delays due to contractual issues. However, it understood that these are now close to resolution.

The delays may result in an increase in estimated costs due to inflation. The Grade 1 listing of the building may mean that the potential to value engineer these costs down could be more limited.

The Draft Project Management Report presents a good summary of the current status of the project and highlights the delays and reasons.

Financial management

No payments have yet been made.

The project will be subject to BCC Standing Orders and will be administered under the City Councils financial systems.

Overall assessment

The project has been subject to substantial delay due to contractual issues. It is understood that these issues are close to being resolved. However, there is a risk that continuing delays could affect the ability to successfully deliver the project - for example due to cost inflation.

Key actions required

A review should be undertaken of contractual arrangements to ensure that the process is escalated and expedited and that lessons are learned for other EZ projects



Making the Connections and Southside Link

As described below, a decision was taken to merge ‘Making the Connections’ with the Southside Link Project.

Project: Southside Link / Making The Connections Ref IFD 1504 / 1502

Description: The Southside Link was a key project (estimated final cost £7.4 million) in the EZ Connecting Economic Opportunities Programme (EZCOP) approved by BCC in July 2014. It aims to provide a safe attractive route from New Street to Smithfield. It encompasses pedestrian crossing and public realm improvements on upper Hurst Street, Ladywell Walk and Dudley Street.

Following a competitive tender process, Atkins Ltd were appointed to carry out the development of design options for the EZCOP programme and for an associated programme of pedestrian connectivity improvements to Temple Street, Lower Temple Street and Lower Hill Street (Making The Connections). The contract value was originally £211,000 and was increased by a further £55,000 in March 2016 (all from EZ resources). Following completion of the design options appraisal stage the EZEB agreed to pursue the Southside Link as a priority project.

The final project aims to deliver a coherent public realm design that balances the space requirements for vehicles, pedestrians and cyclists against an aspiration to provide an attractive and safe link to and from the city core. The new high quality civic space will support community and cultural events as well as occasional street markets.

Progress to date The project is running some 18-24 months behind schedule. The funding FBC submission is now forecast for decision March 2019 (originally September 2017) and detailed design is now forecast to be complete by August 2019 (originally forecast to be May 2017). FBC approval by Cabinet is projected for October 2019 (originally October 2017).

Funding Allocated

£391,500 (Southside Link)

£84,000 (Making The Connections)

Expenditure to date and forecast

2017/18 £118,560

2018/19 Q1/Q2

£53,287

2018/19 Q3/Q4 £56,666

2019/20 £246,987


Development Phase End -September 2016

Detailed Design Stage End – March 2017

FBC Submission to EZB – September 2017

FBC approval by Cabinet - June 2019


Development Phase End – April 2019

Detailed Design Stage End – August 2019

FBC Submission to EZB – March 2019

FBC approval by Cabinet October 2019



Project: Southside Link / Making The Connections Ref IFD 1504 / 1502



Project is only at development stage

BCC procurement regulations have been followed. The contract extension ensured the retention of necessary expertise and knowledge

Contract Documentat-ion

Project Development Application Forms

Monitoring / Highlight Reports

EZ Funding Approval

Tender documentation and contracts

Job Descriptions

Final copies of all documents, including signed copies of application forms) should be retained/provided


Study commissioned by BCC Planning and Regeneration Department.

Overseen by a project Steering Group - BCC representatives, BCC Client Project Manager, Consultant representatives, TfWM Network Manager, BCC Traffic Manager or their representative and representative from BCC Transportation policy team. Group will meet on a monthly basis.

The lead BCC project officer is the key contact for the EZ and is responsible for ensuring all funding conditions and approvals are in place.

Full project delivery is targeted for 2020.

Key outstanding risks at this stage relate to factors affecting potential design – all are being actively managed. They include

- Securing the necessary TROs;

- Potential conflicts with underground services; and

- Meeting Hippodrome requirements

The Highlight Report presents a good summary of the current status of the project and its development to date.


The project is subject to BCC Standing Orders and is administered under the City Councils financial systems.

Overall assessment

The project has been subject to delay but now appears to be on course to deliver an approved scheme by October 2019. Risks that may potentially lead to further delay are being actively managed and relate to outstanding factors that may impact upon the detail of the final design

Key actions required Design-related risks and their implications for final scheme costs need to be actively monitored.




Project: Moor Street Queensway/One Station Ref BSD1803/ IFD 1403

Description: Development works leading to creation of a new interchange corridor as a gateway for new Birmingham Curzon Station, Moor St Station and linking to New St Station and rest of City Centre. The expenditure (except for c.£10k for officer time) is primarily for external fees involved in:

a) Masterplanning. A £200,000 Study to provide detailed engineering and design principles that will inform the Architectural Design Brief for HS2 Curzon Station and surrounding public realm landscaping.

EZDB Approval 17/02/2017 EZEB Approval 01/03/2017. Proposed End Date 31/07/17

b) OBC Development (£20,789) including a scheme design for temporary works to close Moor St plus the business case and cost for permanent closure.

EZDB Approval 21/05/2018 EZEB Approval 04/06/2018 Proposed End Date 18/09/18

Progress to date The Invitation to Tender for the Masterplanning was issued under WM Transportation Professional Services Framework in February 2017.

There were delays in appointing a consultant and in the subsequent work primarily due to the need to align the public realm portion of the project with the HS2 station construction programme and its associated design work which has been subject to delays.

Aecom were appointed and their contract was extended (on cost efficiency and knowledge grounds) to embrace development of the OBC. Work has now commenced

Funding Allocated (a) Masterplanning - £200,000

(b) OBC Development - £20,789

Expenditure to date and forecast

Original spend forecast:

2017/18 £200,000 2018/19 £20,789

Latest spend forecast:

2017/18 £34,991

2018/19 £185,798 (Q1 £15,638; Q2 £6,203)


Masterplan original completion date 31/07/17 OBC 18/09/18


Final written report with options summary, analysis and preferred approach with rationale now forecast to be delivered March 2019





Project is only at development stage

BCC procurement regulations have been followed. The contract extension ensured the retention of necessary expertise and knowledge


Project Development Application Forms

Monitoring / Highlight Reports

EZ Funding Approval

Tender documentation and contracts

Final copies of all documents, including signed copies of application forms) should be retained/ provided


Study commissioned by BCC Planning and Regeneration Department.

Overseen by a project Steering Group - BCC representatives, BCC Client Project Manager, Consultant representatives, TfWM Network Manager, BCC Traffic Manager or their representative and representative from BCC Transportation policy team.

The lead BCC project officer is the key contact for the EZ and is responsible for ensuring all funding conditions and approvals are in place.

Delays in appointment of consultant and delivery have been caused by need for alignment with the HS2 station construction programme which has been subject to delays

Key outstanding risks moving forward relate to:

- Possibility of further delays in HS2 and the Metro Eastside programme; and

- The outcome of consultations on related TROs.

Financial management The project is subject to BCC Standing Orders and is administered under the City Councils financial systems.

Overall assessment The project has been subject to delay as a result of the HS2 station design delays. Risks that may potentially lead to further delay have been identified. They primarily relate to external factors and are under active review.

Key actions required The project is closely linked to the One Station project (IDF1403) which has an approved budget of £1million and is currently on hold. The relationship between the two projects needs to be resolved.




Project: Curzon Station Enhanced Public Realm Ref IFD1703

Description: The project involves the design and development of viable, costed public realm proposals to enhance the design of the HS2 Curzon Station environment. The designs will be to scheme design standard and enough to secure planning permission as part of the overall Curzon Station planning process led by HS2 Ltd. The designs and costings are being used to prepare a Full Business Cases for EZ funding to deliver the projects.

Progress to date Costs and designs completed by HS2 and currently subject to review by BCC’s advisors.

Full Business Case currently being finalised.

Funding Allocated EZ grant - £1.05m

Total cost - £1.05m

Expenditure to date

£550k


Design



Works (full project)

Indicative start date – 01/20

Indicative end date – 12/25


Design

Start date – 01/01/18

End date – Feb 2019



An unsigned copy of the Full Project Application Form has been provided. This sets out details of the proposed design and costing project. The initial fee cost estimate provided by HS2 for Phase 1 was £564k (which was later revised to £550k). Subsequently, a figure of £500k was agreed for Phase 2. Therefore, total cost of the project is £1.05m.

No appraisal report has been provided.

• Final copies of documents should be

retained/provided

• Signed copies of application forms should be retained/ provided


There is no Service Level Agreement (SLA) for this project.

In terms of Grant Funding Agreement between BCC and HS2 Ltd this has been drafted. However, HS2 Ltd is required to accept the terms and conditions of the Birmingham Business Charter and has not yet done so.

• Efforts to agree the Grant Funding Agreement should be escalated




HS2 and BCC have been working closely on this project which is progressing broadly on target with some limited slippage.

Various alternative design options have been assessed and costed. The Full Business Case for the project is currently being finalised.

The Draft Project Management Report presents a good summary of the current status of the project and explains reasons for the slight slippage.

Financial management £550k has been paid to date.

The project is subject to BCC Standing Orders and is being administered under the City Councils financial systems.

Overall assessment The project is broadly on target, although the legal agreement remains to be finalised.





Curzon Metro Stop

Project: Curzon Metro Stop Ref IFD1801

Description: The purpose of this project is to design the Curzon Station Metro Stop scheme, in order to secure planning permission and develop the Full Business Case.

The HS2 Curzon Station Masterplan sets out the vision for the Curzon area, which includes proposals for the Metro route and integrated tram stop at the HS2 Curzon Station. The Enterprise Zone has approved £9m of funding to deliver the Metro Stop, subject to the approval of a Full Business Case.

Progress to date Design and cost work undertaken via HS2. This is subject to appraisal by Birmingham City Council’s advisors and a Full Business Case is about to be prepared.

Funding Allocated EZ grant - £946,005 (approval reduced from £1.07m following audit of costs)

Total cost - £946,005

Expenditure to date

Nil


Design stage



Full project (indicative)


Proposed end date – 2025


Design stage


End date – slippage due to extended legal discussions



A signed copy of the Full Project Application Form has been provided. This sets out details of the proposed design project and description of the full project to integrate the Metro stop into the Curzon HS2 Station.HS2 provided a cost for designing the project. No specific outputs from the stop itself were identified, such as forecast usage. The Benefits and Benefits Cost (BCR) ratio for the overall Birmingham Eastside Metro Scheme (4.8:1) are identified. The results of options assessment work in relation to the alignment of the Metro was also summarised.

No appraisal report has been provided to date.

The following conditions to any approval were identified in the Board papers: (i) Birmingham City Council (BCC) and the Midland Metro Alliance (MMA) will carry out an appraisal of the cost estimate to



ensure its value for money; and (ii) delegated authority will be given to the EZ Executive Board Chair to approve the final cost for EZ funding.

It is understood following discussions with the Project Manager that the project design and costs provided by HS2 are to be appraised. A Full Business Case is about to be prepared for the project.


There is no Service Level Agreement (SLA) for this project.

In terms of Grant Funding Agreement this is understood to have been a difficult process with legal discussions ongoing between BCC, HS2 Ltd and the MMA.

• An SLA should be agreed

• Efforts to agree the Grant Funding Agreement should be escalated


The Draft Q2 2018/19 Project Management Report indicated that the project was on target to meet its funding conditions, benefits and financial targets. However, it is understood that there has been some slippage in timescale, although this is not expected to affect the proposed end date for completion of the full project.

Financial management No payments have yet been made.

The project will be subject to BCC Standing Orders and will be administered under the City Councils financial systems and subject to the conditions within the Grant Funding Agreement

Overall assessment The design project is now well progressed, although there has been some slippage and the legal agreement remains to be finalised.


• A review should be undertaken of contractual arrangements to ensure that the process is escalated and expedited and that lessons are learned for other EZ projects




Project: Digbeth High Street Ref IFD1802

Description: This project comprises a comprehensive review and the development of costed proposals for remodelling Digbeth High Street, including public realm, Metro integration, highway and public transport requirements.

Progress to date

Outline Design stage completed but some slippage due to initial project delays and continuing issues in finalising the Grant Funding Agreement.

Funding Allocated

EZ grant - £0.71m

(£0.52m capital and £0.2m revenue)

Total cost - £0.77m

Expenditure to date

£195k



Proposed end date – 08/18


Start date - Feb 2017

End date – Q4 2018/19



An unsigned copy of the Full Project Application Form for the initial revenue funding has been provided. This sets out details of the proposed revenue project.

No appraisal report has been provided.

• Final copies of documents should be

retained/provided



The Grant Funding Agreement between BCC and Midland Metro Alliance (MMA) has not yet been agreed

• Contractual agreements have resulted in

l delays. The time taken to approve contractual arrangements should be monitored and appropriate action, such as escalation, taken to expedite the process.


The initial feasibility work (£195k) was undertaken by MMA. Various options were assessed and a preferred option identified. The additional GBSLEP funding (£515k) is being used to develop the preferred option to Full Business Case stage.

Finalisation of the project is now subject to delays due to contractual issues.

The Draft Project Management Report presents a good summary of the current status of the project and highlights the reasons for variations in performance.

• It may have been appropriate to escalate

the issue and to identify actions to expedite the conclusion of the contractual arrangements.


The initial revenue funding of £195k has been paid. The expenditure has slipped due to delay in agreeing the Grant Funding Agreement




Overall assessment

The project is subject to delay due to contractual issues. Key actions required




Metro Extension to Centenary Square

Project: Metro Extension to Centenary Square Ref IFF 1409

Description: The project will involve the extension of Midland Metro from Birmingham New Street Station to Centenary Square via Victoria Square [and Paradise Circus].

The scheme aims to provide easy access between the new leisure and business facilities around Centenary Square and the primary Birmingham Railway stations as well as delivering connectivity improvements from locations along Line 1 of the Midland Metro.

Funding covered detailed design, utilities diversions, procurement and construction of the Metro Extension Project.

Progress to date This project is being delivered by MMA in line with the original business case. A decision was made early on to put the utilities diversion back to Oct 2018 to align with other works in the area.

The construction strategy was revised in conjunction with approval to close Paradise Circus to facilitate completion of the key deliverable (operational tram service) by Dec 2019.

Detailed design completed by June 18 to allow all long lead items to be procured.

Additional costs requested to cover increased specification of works, design amendments to other projects; shortfall from PCLP (JVC delivering Paradise Street). Approved by Board in Mar 18.

Funding Allocated £3m EZ Metro development works

£15.95m EZ

Additional £4.474m approved by EZ Board in Mar 2018

Expenditure to date

Development Costs - £3m

2013/14 £2.2m

2014/15 £800k

2015/16 £2.8m

2016/17 £6.1m

2017/18 £3.9m


PDD Approved Oct 13

Scheme business case approved by LEP Dec 14

Revised Timetable AIPs approved July 2017

Utilities Diversion moved to Oct 2018



Public Inquiry 2014 (Decision May 16)

FBC approved by cabinet May 15

Utilities Diversion Jan 2015

Design AIP’s to be approved by BCC Oct 16

Value engineering (Pinfold/Broad St Crossover) Nov 16

Construction Strategy/Programme Nov 16

Enabling works start Jan 17

MMA Review and completion of detailed design Sept 18

Closure/reopening of Paradise Circus Sept 18-June 19

Track laying Jan 19 – Sept 19

Public Realm Mar 19 – Sept 19

Testing/Commissioning - Aug 19

Complete main works - Dec 19

Tram operational – Dec 19

Construction Strategy programme design complete following revision for Paradise Circus closure June 2018

Construction works to commence Jan 19

Testing & commissioning Oct 19

Passenger services operational 22nd Dec 2019



Following completion of the initial PDD a detailed business case was produced in Dec 2014, which considered a range of different options to identify the preferred option that maximized value for money (including sensitivity analysis). Robust cost estimates and detailed financial planning was carried out at the outset to inform the Business Case – which has a BCR of 2.9:1 (e.g. high value for money for transport schemes).

Centro (owned by WMCA) has experience in procurement of Midland Metro extensions and a strong project team with a mixture of in house project managers and technical and operational light rail experts together with a strong team of supporting consultants and advisors covering all aspects of the development and delivery of the project. The team has a robust, programme-managed, delivery focused organisation in place, supported with the correct resources, skills and leadership.

In June 2016, the WMCA completed a procurement exercise which resulted in Colas Rail and Egis Rail (and consortium partners) appointed to undertake all design and construction activity in relation to the Midland Metro for up to the next 10 years. These organisations along with colleagues from the WMCA are



working collaboratively as a single integrated team - the Midland Metro Alliance (MMA).

The team are tasked with delivering all extensions and improvements to the Midland Metro Programme.

An additional funding application was approved by the EZ Board in March 2018.


The project is supported by:

• A Full Business Case (5 Cases) – Dec 2014

• Detailed cabinet papers seeking approval for the release of funding to

Centro subject to EZIP governance clearance (by the Project Delivery

Boards, EZ Directors Board, EZ Executive Board) and grant payments in

line with an SLA/grant funding agreement

• Grant Funding Agreement (February 2017)

• Additional funding application and technical appraisal report -

supported by detailed costings from TfWM and a due diligence report

prepared by Turner and Townsend


Original business case approved in 2015.

Project being delivered by MMA in line with original plan with exception of utilities diversion which moved to Oct 2018.

Additional costs requested to cover increased specification of works, design amendments to other projects; shortfall from PCLP (JVC delivering Paradise Street). Approved by EZ Board in Mar 18.

The construction strategy has been revised in conjunction with approval to close Paradise Circus allowing the key deliverable (i.e. operational tram service) by Dec 2019.

Detailed design completed by June 18 to allow all long lead items to be procured.

The project is currently on track to become operational in December and being managed by a dedicated PM within TfWM, who is providing regular Cllr briefings and liaising with highways to ensure remedial work is taken to avoid delays to the timetable.

The projected benefits will be realised thereafter, namely:

• enhanced connectivity between business, labour pools and key development

sites

• enhanced connectivity to the cultural offer and increased connectivity for

deprived areas



• creation of new jobs and economic growth

• improved journey times, provision of sustainable travel modes, and

environmental benefits

Financial management A Grant Funding Agreement between Birmingham City Council and the WMCA was signed in February 2017. This details the full scheme costs of £34.2m funded by £18.65m from the EZ (including £3m development funding); £4.85m LTB funding; £6m from WMCA; £4.7m Third Party/Developer contributions. The funding agreement also outlined the terms and conditions and processes/schedule for claims.

A subsequent request for additional funding of £5.474m was made and the EZ Board approved £4.474m in March 2018. The appraisal was supported by due diligence carried out by Turner and Townsend.

TfWM have designated personnel with oversight for processing claims and managing the Metro Extensions.

Overall assessment A dedicated project manager is in place within TfWM with responsibility for monitoring progress on a daily basis – to ensure that there is a client contractor relationship with the MMA. A detailed work programme with key milestones is in place and the project remains on track for testing and commissioning to start in October/November 2019 with a view to passenger services commencing in December 2019. Delivery risks are being actively monitored and managed by the project manager following delays associated with the ENGIE main works in Centenary Square.


Ongoing monitoring of this project alongside the Public Realm Improvements to Centenary Square and Complimentary Highway Works – to ensure it remains on course for completion in Dec 2019.




Project: Complementary Highway Works – Navigation Link

Renamed Swallow Street

Ref IFF1305

Description: The project will provide an outlet for vehicles that will be affected by the changes to traffic in Hill Street and other roads affected by the Metro Extension and the Paradise Circus redevelopment. It will consist of a two-way link on Brunel Street, a new signalised junction and two-way traffic on Suffolk Street Queensway.

Progress to date Swallow Street scheme has now started on site, following acceleration by MMA. It will be carried out in 2 phases to allow for the metro works to be completed on time. The project will complete in Spring 2019.

Funding Allocated £251.8k (Development costs)

Expenditure to date

£251.8k


Phase 1 to commence on site – June 2017

Phase 2 on site – Sept 2018

Completion – Spring 2019

S278 Legal Agreement sign off - March 2018

Revised Timetable S278 agreement to be signed in Dec 2018 following minor amends to phase 2 design drawings

Completion due Spring 2019



This project was initially part of a package of Complimentary Highways Works (CHW) that would be needed to accompany the Metro Extension to Centenary Square.


This project was initially part of wider package of CHW support. The majority of the paperwork relates to change requests made following initial feasibility work and alternative plans related to Swallow Street (which presented a less costly option) which have resulted in the original funding being reallocated back to the EZ.

Signed copy of the S278 agreement required.


In 2013, EZEB approved £270k for the development of CHW to accompany the Metro Extension to Centenary Square. The works included Broad St, Signage Strategy for the area, Five Ways Junction; and the Navigation Street link. A further £80k was also added to fund the implementation of Five Ways.



In Oct 2015, a funding swap was agreed between Centro and CHW to allow Centro to use LGF ahead of EZ, so CHW is now being funded by EZ vs LGF, with a total budget of £3.05m comprising £350k development fees and £2.7m for delivery.

In Nov 2015, the EZ board reallocated £75k from Navigation Street implementation stage to the development stage to take an alternative, less costly option for Navigation Street, known as Swallow Street to FBC and detailed design.

In June 2016 TfWM agreed in principle to take ownership and responsibility for the design, development and delivery of the Swallow Street Scheme element of the Metro CHW, which would be delivered by MMA. £2.235m was re-allocated back to the EZ budget, with a view to this funding going to TfWM to continue development and delivery of the scheme. This funding was subsequently reallocated back to the EZ (Oct 2016), with £40k retained by BCC to cover feasibility costs and fees associated with setting up legal agreements, approving designs and public consultation.

It was agreed that the Swallow Street Scheme would be resourced by TfWM from contributions no longer required for Holloway Circus (£1.5m) and the Navigation Street Scheme (£0.5m).

The project will complement the Metro delivery through Centenary Square by providing an alternative traffic route following closure of Hill Street due to Metro Works.

Financial management The feasibility and development funding has now been spent, but responsibility for the delivery and financial management of the Swallow Street highway works have now passed to TfWM who will complete the works in conjunction with the Metro Extension to Centenary Square.

The project manager within Infrastructure Projects also manages the other CHW schemes. They are responsible for reporting progress to the BCC project Board and the EZ Board.

Overall assessment The feasibility/developmental work is now complete and a less costly option – Swallow Street will be delivered instead of the original Navigation Street works. Responsibility for implementation/delivery has passed to TfWM. The project manager (Infrastructure Projects Delivery Team) is in regular contact with TfWM/MMA to work through the metro programme and action works for the delivery of the Swallow Street. The project is on site, and works are being phased alongside the Metro Extension to Centenary Square and the Paradise Development Programme during 2019.




Centenary Square

Project: Centenary Square - Public Realm Improvement Scheme Ref IFF 1604

Description: The Centenary Square refurbishment and public realm scheme is part of a programme of transformational works to the Westside of the City Centre - connecting Paradise Forum, Arena Central, HSBC, the Library, REP theatre, Symphony Hall and the Metro extension.

Progress to date This project has been subject to a range of contractor delays from the outset. As a result, the project is currently 9 months behind schedule and £4m over budget.

Funding Allocated

£10.55m

Projected costs for completion estimated at £15.76m. Less S106 contributions, final project cost estimated at £14.55m (Q2 2018/19)

Expenditure to date

£9.45m

Timetable for completion

PDD – Oct 2013

Appoint Designers – Aug 2015

Agree design with Metro – Sept 2015

FBC approval – April 2016

Start on site - April 2017

Handover Hall of Memory – May 2018

Water Feature complete – July 2018

Handover REP – Aug 2018

Project complete – July 2018


Hall of memory – Sept 18

Water feature – Sept 18

Handover REP – Sept 18

Completion – June 2019



Following approval of the PDD (and budget for feasibility work) an international design competition was carried to appoint a designer for the project.

The designer worked with the initial contractor to work up the costs of the scheme for the FBC.

At this stage the costs of the project increased from £8m to £10.55m, and Thomas Vale were appointed (via the Constructing West Midlands Framework – on agreed Target Cost under Option C of NEC Contract) to undertake the works, following cabinet approval of the FBC in April 2016.

The BCC FBC is available which outlined aims, objectives, consultation, procurement processes, deliverables, dependencies and milestones. The business case did in particular highlight the project interfaces required with:

- the Metro in terms of seamless design and construction and close

working arrangements

- HSBC and Arena Central in terms of design and choice of materials




A number of documents have been reviewed including:

- details of the design competition

- EZ Board progress reports

- Cabinet report and FBC

- CWM Breakdown of Costs

- EZ Funding Approval request

- Monitoring reports

- Funding approval letter

Copies of the commercial settlement agreement to be kept on file; revised costings; timetables; risk register; cabinet report re overspend.


The project is being managed internally by a skilled programme manager from the Planning and Regeneration Department (who has experience of delivering projects of a similar scale e.g. the City Park Scheme). Gleeds have been appointed to manage the project and contractors on a day to day basis.

Early progress delayed due to BCC lighting approval; placing the order for granite; completion of construction drawings; ground obstructions; utility designs; MMA removal of railings; poor contractors performance.

Currently running 9 months behind schedule.

Report currently with the Cabinet on the implications of the project delays on projected overspend.


The project delivery partners were selected via the Constructing West Midlands Framework Lot 7 – in accordance with BCC standing orders and financial regulations.

Dedicated and experienced project managers have been overseeing the delivery of the project, however a range of complex/external factors (some of which are associated with the Metro Extension to Centenary Square have adversely impacted on the delivery of the scheme – leading to a significant overspend.

Commercial settlement on costs and time agreed with all parties.

Overall assessment

This project cannot be brought back on track and is currently projected for completion by June 2019. The risk register and programmed works have been updated and require careful monitoring and oversight at a senior level to ensure that further cost over-runs are minimised.


This project needs to be monitored closely in conjunction with the Metro Extension Timetable to ensure that further timetable delays (and additional cost overruns) are minimized.



Pinch Point – Ashted Circus

Project: Ashted Circus Ref IFF 1607

Description: The project will deliver capacity enhancement to the ring road to alleviate future capacity constraints that will impede economic growth within the EZ and HS2 Curzon.

Five pinch point schemes were initially identified following the announcement of the Local Pinch Point Fund in the 2012 Autumn Statement. Curzon Circus, Bordesley Circus and Haden Circus were all completed in Spring 2016. The works at Holloway Circus are due for final completion in Feb 2019 (this allows for the maximum 12 month window to correct defects) and Ashted in March 2019.

The City’s ring road plays a vital role in providing access to the City Centre with improvements required to reduce congestion and accommodate key EZ developments. The pinch points were identified to relieve congestion; reduce severance for cyclists and pedestrians; improve connectivity between the City Centre and economic centres in the east and improve accessibility to the CBD, Curzon HS2 area and other key destinations to support EZ growth.

Progress to date

The project is progressing well and is currently on track to finish in March 2019. All milestones achieved to date.

As LGF funding will be spent first, project is likely to deliver an underspend of approx. £400k for the EZ.

Funding Allocated

£300k – Development Funding (2014)

£1,998m – Full Application

Expenditure to date

2018/19 - £1.4m

2019/20 - £898k


Contractor procured – March 2017

Complete detailed design – Sept 2017

Agree target costs – Nov 2017

Commence on site – Jan 2018 (Feb 2018)

Finish on site – March 2019

Defect correction – March 2020

Practical completion – Dec 2020

Revised Timetable

All milestones achieved to date, and on track to deliver remaining ones on time.



Development funding application available for Ashted as part of the wider pinch points scheme. Funding used to develop a 5 case business case FBC to accompany the LGF funding application. Therefore detailed application with consideration of:

- Long list of options/shortlist

- Sensitivity analysis

- Value for money /Benefit Cost Ratios

- Risks

Appraisal report and recommendation for approval.




Development/Design funding application available with supporting scheme details/programme timetable

BCC Cabinet report available

Full Business Case (in line with the 5 case business case model) – as this is required for LGF funding

Technical appraisal report checklist

EZ Programme manager report with recommendation for approval of funding

Full application for EZ funding

Monitoring data for both LGF and EZ (including Risk register)

No confirmation of funding approved by the EZ /contract – however an SLA is in place for the LGF funding approval.

EZ funding approval to be kept on file. EZ systems to be brought in line with LGF/LEP gateway/document retention systems.


This project is progressing well and on track for completion on site in March 2019.

This is likely to be a result of the very detailed design work undertaken at the project development stage and the robust procedures put in place for management and delivery of transport schemes within the Highways/Transport Infrastructure team (as set out in section 2.7 of the application form).

As the project is also in receipt of LGF funding, ongoing monitoring also requires risks to be reported on, in addition to spend and outputs.

All traffic outcomes are expected in Jan 2019. However, systems are in place to capture and monitor the projected outputs and outcomes.

As a result of the preferred option, a new business development opportunity is being progressed close to the new junction.


BCC financial monitoring systems are being adhered to, which require submission of invoices to the BCC Construction manager which are then considered against the projected/scheduled costs, approved by the project manager and then the section head. Copies of all invoices are held by Transport/Highways and copies provided to the LEP in line with the LGF requirements as opposed to the EZ.

The project is due to spend the LGF funding in the first instance and then EZ. As a result of detailed planning and design, the project is expected to come in under budget.

Overall assessment

Project is progressing well and the preferred option (new traffic signal junction layout) is expected to provide the traffic benefits to support economic growth (a new employment development is already being progressed next to the new traffic junction). The junction is expected to offer scope for traffic flow management, by linking traffic signals along the ring road between Dartmouth Middleway and Bordesley Circus.


No further action required. Evidence of outcomes to be provided to the EZ team following completion of the scheme.



Ladywell Walk

Project: Ladywell Walk (Southside-Hurst Street Proposed Permanent TRO) Ref IFF 1703

Description: This scheme will permanently close Ladywell Walk to motorised vehicles in Birmingham City Centre. This includes permanent changes to the road layout and adjacent junctions to allow the closure to operate effectively and mitigate the effects on local traffic and access for car parks and deliveries/servicing.

The closure is the first phase towards the public realm improvements in an extended Hippodrome Square.

Progress to date

Project completed. Minor changes are currently being made to signs and lines to reduce driver confusion. The TRO will be sealed after this and final account settlement with the contractor – expected January 2019.

Funding Allocated

EZ grant - £920k application

Expenditure to date

£550,057

£62,921 forecast for reminder of 18/19

Underspend of £306,937


Start on site - March 2017

Works complete – July 2017

Remedial works complete – July 2018

Financial completion – Jan 2019

Revised Timetable

Start on site – Oct 2017

Works complete – Dec 2017

Remedial works – Nov 2018

Financial completion – Jan 2019



A signed copy of the Full Project Application Form has been reviewed (April 2017). This sets out details of the proposed project and is supported by phase 2 (Highway alterations) and phase 3 (southside link) scheme plans; high level programme timetable; and consultation summary.

The application demonstrates that other options were considered but this option was the most cost effective, primarily as removal of the central island under the alternative option would have significant cost implications due to a major power cable underneath that feeds New St Station and Grand Central. It also provided a detailed risk assessment for the project.

EZ Board report available recommending approval and cabinet report seeking approval for the EZ funding/agreement also available.

No approval letter on file – copy of board report minutes usually provided.

Copy of the approval letter/board report minutes to be retained on file.


Evidence of online documentation was provided e.g. PDD, Cabinet Report (Transport and Connectivity), Financial claims, and the internal project monitoring system used to track progress and spend.

The cabinet report also provides delegated authority for the project manager to proceed with the tender procurement process using the Transport and Highways Framework for tender quotations.

See above

Copy of BCC PIR to be provided to the EZ office on financial completion.



Full application provided and performance management information.

Internal Project Implementation Report (PIR) due for completion in Jan 2019, following final payment to the contractor – outlining progress, lessons for the future.


This project was slightly delayed, as further initial consultation was required and changes to the design requested by the Cabinet member. Following sign off of the PDD, the project was broadly delivered on schedule, in line with the programme timetable provided with the application, although there was a slight delay in signing the BCC FBC as the Cabinet member was awaiting the outcome of the Taxi TRO.

Robust QS procedures are applied to costing and managing all Highway Infrastructure Projects. As a result, and due to lower than expected tender price and site investigations showing that utility equipment could be designed around, approx. £300k is due to be returned to the EZ.

While the project was delayed slightly, this has only had a minor impact on the start date for the final public realm works associated with Southside Link.

To date, the permanent TRO has been successful in reducing through traffic in the area. This will in turn improve access to employment areas and help in attracting investment and benefits for the EZ in the longer term.


The project management arrangements are outlined within the full application, with the Head of Infrastructure Projects responsible for overall delivery, Governance arrangements are provided by legal services, finance and highways (transport delivery group), while project management is led by an officer within the Highways team. The contractor (approved from the Highways Framework) was managed by a construction supervisor from BCC.

Financial management is in accordance with the Councils standard procedures. The EZ funding/spend is tracked using the voyager system and allocation of project code.

The BCC construction manager submits invoices to the project manager for checking, before these are signed off by the head of section. The EZ team provides quarterly updates on spend against the relevant cost code. Copies of invoices are retained by the project manager.

Overall assessment

The construction works associated with this scheme are now complete and minor changes to signs and lines are being carried out to reduce driver confusion, following monitoring post completion.

The permanent closure of Ladywell Walk will build on the success of the temporary TRO in restricting traffic in the area. These works will be the catalyst to allow for public realm improvements in an extended Hippodrome Square.

The project – part of the EZ Connecting Economic Opportunities Programme – will provide a safe and attractive route between New Street Station and Birmingham Smithfield in the Southside area.


Lessons learnt (as highlighted in the PIR) should be noted and transferred/applied to the delivery of other projects of a similar nature.



Birmingham Smithfield

Project: Birmingham Smithfield Ref BSD1609

Description: The aim of the project is to develop a Delivery Strategy and Full Business Case to bring forward the development of Birmingham Smithfield area in accordance with the Birmingham Smithfield Masterplan that will radically transform the City’s visitor economy creating a major cultural and leisure destination with a dynamic mix of uses that will include vibrant markets and leisure and cultural facilities, offices, a major public square, and an exemplar residential neighbourhood.

Progress to date

Tender process completed and Outline Business Case (OBC) approved by BCC

Funding Allocated EZ grant - £1.1m (revenue)

Total cost - £1.1m (revenue)

Expenditure to date

£870k (Nov 2018)






End date – 30/11/20



A draft unsigned copy of the Full Project Application Form has been provided. This sets out details of the proposed project and of alternative options, including forecast jobs created and safeguarded.

The application included funding for staff, with job descriptions provided in appendices.

No appraisal report has been provided. However, the Project Manager explained that the application was subject to internal appraisal.

• Final copies of documents

should be retained/provided



There is no Service Level Agreement (SLA) for this project. Internal BCC correspondence notes that for projects managed by BCC officers historically there were no such agreements. However, work has been underway with Birmingham City Council’s (BCC’s) Legal Department to create an SLA template for use between the EZ and BCC delivered projects. All projects still in delivery stage are expected to receive an agreement in the next few months.

The procurement has comprised what appears to be a very robust process which has resulted in the selection of a preferred bidder.

• An SLA should be agreed


As noted above, a preferred bidder has been selected and an OBC completed and approved by BCC.



The project has currently slipped by approximately a year. This is due to Sponsor’s requests:

a) to consult Cabinet on Project Objectives and approve Delivery Structure options prior to commencing Competitive Dialogue Process and delays in Issuing Contract Notice ;

b) for Bidders to present to Members;

c) for the dialogue period to be extended to enable sufficient time for the council to obtain one or more proposal from the shortlisted bidders that is capable of meeting the project needs including detailed Heads of Terms; and

d) for the evaluation time to be extended to ensure that evaluators received comprehensive expert advice from the Property Adviser.

The project end date and benefit delivery dates are still forecast to be on target, although the latter is likely to be challenging

The Draft Project Management Report presents a good summary of the current status of the project and highlights the delays and the reasons for these.

The preferred bidder’s masterplan inevitably shows different outputs and outcomes to those set out in the original Masterplan and application.

Financial management The BCC financial control system shows the agreed LEP EZ funding to now be £1,092,647. The original approval was for £939,889.

The BCC financial control system shows that £870k (80%) of the EZ funding has been spent

Staff time is recorded using timesheets.

Additional costs have been incurred in relation to some services (such as the provision of a Marketing Strategy and further legal advice). The intention is to ask the Preferred Bidder to contribute towards these, although additional EZ funding may be requested.


Overall assessment The project has currently slipped by over a year although it is forecast that this slippage will be made up. It has involved the management of a very large and complex procurement process.


Documents

Subject Pre Purpose Presenter Read - GBS LEP...To receive a presentation on Innovation Projects and QTIH Approving the Programme-Level Entry and the conditional allocation of £3,021,000