Agenda item - Covid-19 - Impact on the Capital Programme

[To consider capital budget implications arising from the global pandemic]

That Council be recommended to:

1. Note that the Covid-19 pandemic has had a damaging impact on capital projects, internationally, across the UK and in the city, leading to cost pressures associated with new ‘social distanced’ operating models, materials and how they are sourced. Major development projects such as the Civic Halls and WV Living sites have been affected by this global issue.

2. Approve budgetary provision for specific risks emerging from the Covid-19 global pandemic in relation to the Civic Halls project, that cannot be contained within the contingencies already provided for within the existing budget.

3. Delegate authority to the Cabinet Member for City Economy in consultation with the Director for Regeneration, to approval the award of the construction contract for the Civic Halls restoration project, to Willmott Dixon Interiors Ltd of Lock House, Castle Meadow Road, Nottingham, NG2 1AG for a total contract value of £X.

4. That, due to the impact of Covid-19, a capital repayment holiday is provided to WV Living.

5. That, due to the impact of Covid-19, equity of £X million is provided to WV Living once evidence has been provided to satisfy the Director of Finance and the Director of Governance that the investment would comply with the relevant rules.

6. Delegate authority to the Cabinet Member for Resources, in consultation with the Director of Finance to approve the final terms of the capital repayment holiday and the equity provision.

7. Delegate authority to the Director of Governance to execute the necessary agreements to give effect to the decisions made.

The Chair announced that this item had been included on the agenda in the public section to be transparent on the important issues of the costs of Covid-19 on the Council’s Capital Programme, as it had impacted on capital projects across the world as well as nationally and regionally. The detailed figures would need to be covered in private session as these included key financial information that if included could prejudice the Council’s or its partners financial position. If for example the actual budget provision was disclosed in relation to Covid-19 costs that would prejudice the Council's ability to seek to reduce those Covid-19 costs to their bare minimum.

Councillor Louise Miles presented the open session report on the true cost and impact on the Council's finances of the Covid-19 pandemic. Two of the Council’s projects had been identified as experiencing difficulties purely as a result of Covid-19. The first of those was the Civic Halls which is a very important project for the City. Immediately prior to the Covid pandemic it was on target and on budget. Unfortunately, it had been impacted on because of delays in construction work as a result of Covid-19 safety measures that would have to be introduced for construction workers. WV Living found itself in a similar position with projected delays in construction but also because of a drop in the housing market. It was proposed to continue the Council’s support for the projects. The exempt report on the private session on the agenda outlined in more detail how it was proposed to continue the Council’s support. The immediate step was to stabilise the position on the projects.

Members of Cabinet commented reiterated that Civic Halls remained a key priority for the Council and would play a major role in the City’s economic recovery. They also noted that WV Living had successfully built and sold houses over a period of years and were projecting a profit on current committed schemes. It was is therefore clear it was a viable and sustainable business and was delivering much needed properties and meeting all of its obligations to the Council.

Resolved: