Agenda item

The Committee received a report of the Corporate Director of Regeneration Economy and Growth and presentation that set out the approach to the management, monitoring and performance of Major Programmes and Projects delivered by the Regeneration, Economy and Growth Directorate. The report also provided an update on some programmes and projects as requested by Economy and Enterprise Overview and Scrutiny Committee (EEOSC) (for copy of report and presentation slides, see file of minutes).

 

The Committee were provided with a detailed presentation that focused on:-

 

·        REG Major Programme Portfolio and Capital Programme;

·        Major Programmes Board and Portfolio Office Approach;

·        Project Reporting Timeline;

·        Controls and Guidance;

·        Case Studies requested by EEOSC.

 

The Corporate Director of Regeneration, Economy and Growth highlighted that the major programmes was an ambitious programme and in the process of pulling the report and presentation together for members, it was felt important that members were provided with detail of the approach to the management of the major programmes and projects, how they are monitored and the performance. 

 

The Corporate Director of Regeneration Economy and Growth advised that the key aim was to provide assurance that appropriate standards and controls were in place to ensure programmes and projects were managed successfully within the delivery framework with appropriate levels of controls, challenge and intervention. In addition, the Corporate Director of regeneration, Economy and Growth continued by confirming that the report and presentation focused on the major programmes and projects of the REG Service Grouping and that detail had been provided in the form of case studies for some of the REG major programmes and projects which had been requested by members of the committee prior to the meeting. She highlighted that in relation to these case studies specific high-level overviews had been provided with budget information where commercially not sensitive.

 

The Corporate Director of Regeneration, Economy and Growth continued that in relation to the REG Major Programmes Portfolio it totals £878m with £628m committed or secured and a further £250m at different phases of development however this does not include where we have oversight of a project such as a joint venture with the private sector. It was highlighted that there was significant private sector investment in relation to the major programmes and projects of £1.4 billion with examples including Milburngate £130m, Aykley Heads £250m, Jade Business Park Phase 2 £100m and Forrest Park £120m.  In addition, 70 major programmes and projects for the REG Service Grouping, the Service was also managing 103 non-REG schemes for other services totalling over £100m.

 

In relation to the REG Capital Programme it was confirmed that for 2023/24 there are 149 schemes totalling over £136m and it was highlighted that this will change throughout the year to reflect the receipt of windfall grants etc with the figures in the table provided from 2018 to 2025 showing a significant increase in the value of the programme, highlighting the need for robust management.

The Corporate Director of Regeneration, Economy and Growth then passed across to Funding and Programmes Manager and the Strategic Programme Manager.  

 

The Funding and Programmes Manager explained that she was responsible for the Portfolio Office (PO) and that the Strategic Programme Manager leads the Major Programmes Team managing projects across the county.  It was confirmed that the Major Programmes Board (MPB) this was established in P2021 to oversee the REG portfolio and that it was chaired by the Corporate Director of REG.  It was highlighted that the Board had an increasing portfolio to oversee and that it had developed a Portfolio Office (PO) which had devised the relevant documentation for the management of the programmes. The PO was a virtual information hub and centre of excellence for all programmes and projects receiving various information and collecting data for all the portfolio including detail of risks in relation to any project.

 

The members were then provided with a slide showing the Major Programme Board, project reporting timetable.

 

In relation to controls and guidance it was confirmed that in addition to the Process Flow Diagram followed by the MPB, there was a guidance framework to help sponsors, programme and project managers understand the requirements and outputs needed to set projects up and ensure delivery of activities in accordance with REG’s Portfolio Office (PO).  This guidance will facilitate consistent and effective project setup, development and delivery and will allow the MPB to track and assure the programme mandates and objectives and that the projects are achieving the expected outcomes.

 

The Strategic Programme Manager commented that the MPB had established and agreed a programmes and projects business process which provides an agreed framework through which all REG programmes and projects both capital and revenue are delivered. Each stage of the process covers a prescribed set of activities, including expected deliverables required to navigate assurance Gateway checkpoints. Each Gateway will seek to revalidate programme and project assumptions, viability and progress against plan.  It was highlighted that all projects have to go through four Gateway changes during the cycle and that the PO will support project and programme sponsors and those responsible for project delivery in navigating the business process.

 

Members then considered a slide showing the breakdown of the 70 projects by business unit and the project health indicators in relation to the various projects showing the status of the projects by cost, time, quality, scope, benefits and overall risk.

 

It was noted that EEOSC had requested an update regarding a number of specific key projects including Durham Innovation District Aykley Heads, Jade Phase 2, The Story, DLI Museum and Art Gallery, Leisure Transformation Programme and Durham City Bus Station.

 

The Head of Corporate Property and Land provided an update on the Durham Innovation District Aykley Heads project, noting that the project was in the defining stages and was undergoing the procurement process which was an important milestone. She advised that the project was developing as expected in terms of timeline and costs and they would be in a position early 2025 to report to Cabinet the preferred partner for the development. As part of the process a business plan would be developed setting out detail on the Aykley Heads development and something that Overview and Scrutiny would like sight of going forward as the process progressed.

 

The Head of Economic Development provided an update on the Jade project and advised that indicators were rated green on all aspects apart from the timeline as the council were not in direct control of the timescales. Overall the project was provided with an amber rating due to inflation pressures, however the project was in a strong place. He advised that Phase 1 was a council funded project to deliver industrial space which was completed in 2021 and provided seven new industrial units which would provide approximately 200 jobs. Phase 2 was a private developer lead project and the team were focused on inward investment along with Business Durham and working with the market. It was noted that outline planning permission to develop Phase 2 had been agreed with the capacity to provide 1,000 new jobs. The project was in the defined stages and the developer was in negotiations to secure private investment funding and work was being done to secure LEP funding. It was noted that construction would start in the summer 2024 and tenants would occupy units by spring 2025.

 

The Head of Culture, Sport and Tourism provided and update on The Story and advised that the project was handover on the 26 October 2023. The original construction programme was extended due to various factors in relation to the historic building. She advised that completion had been rejected several times since April 2023 for not meeting DCC completion requirements. The fit out would be a long process to transfer 11 kilometre of archives and would be undertaken when rooms were at the correct environmental conditions. The building would house five services including archives and the registration service.  

 

With regards to the DLI Museum and Art Gallery, the Head of Culture, Sport and Tourism advised that the project was currently at stage 4 of the process and indicators were rated green at this stage with an overall amber rating as they were still awaiting costing from the contractor. The programme started in February 2022 with a target completion of Q4 2024/25. It was highlighted that to get to stage 4 at this point was a remarkable achievement by the team.

 

Moving onto the Leisure Transformation Programme, the Head of Culture, Sport and Tourism advised of the different stages for each programme, Abbey was complete and at the handover stage, Peterlee was almost complete, Bishop Auckland was at the planning stage, Louisa Centre was on track, Spennymoor and Teesdale was almost complete. She advised that a comprehensive Cabinet report covering the whole Leisure Transformation Programme would be presented in due course. She highlighted the challenges and complexities of the project which included market changes, cost of living crisis, construction inflation, staff recruitment, market forces/procurement, operational impacts and unforeseen major repairs.

 

The Head of Transport and Contract Services provided an update on Durham City Bus Station and advised that they were in the final stages of handover. He highlighted that there were still some risks in relation to external works. It was noted that they were able to apply for a £3.6m grant which contributed to the overall funding of the project. In terms of timeline, the opening was delayed by 12 months with a revised opening date of November 2023.

 

The Corporate Director of Regeneration, Economy and Growth summarised that the major programmes have a value of £878m with £628m delivered, pipeline committed and secured.  In addition, there was a further active pipeline development unsecured of £250m with 152 live schemes totalling £153m together with strong programme governance across all schemes in line with best practice.

 

Councillor A Batey noted there was a regular reporting mechanism in place and various information data produced, however she would like to see more regular updates communicated to Overview and Scrutiny and residents on how projects were progressing. She queried the definition of the DLI project as it was still being referred to as the DLI building and highlighted that there was a need to communicate the name and scope of the project with residents. In relation to the Leisure Transformation Programme, she was disappointed that there was no reference to proposals for Chester-Le-Street and Seaham Leisure Centres, even though a consultation process had been undertaken requesting Chester-Le-Street resident’s views on the proposals. In addition, the Louisa Centre was falling behind on timescales and she felt that residents in North Durham and other communities within the county were being disadvantaged by missing out on improved leisure provision. She highlighted that neighbouring authorities were cutting their leisure offer such as Gateshead and suggested that this would provide an opportunity for Durham County Council to attract clients from outside the county with an improved leisure offer.

 

The Corporate Director of Regeneration Economy and Growth commented that the Service was not involved with setting the Overview and Scrutiny forward plan, however she would discuss with the Chair and Vice-Chair regarding providing more regular updates on the major programmes and projects. In relation to the Leisure Transformation Programme, she advised that a comprehensive Leisure Transformation Programme report would be presented to Cabinet later in the year which would include updates on Chester-Le-Street and Seaham Leisure Centres.

 

In relation to the DLI Museum and Art Gallery project, the Head of Culture, Sport and Tourism commented that branding was a long process which involved research teams, branding experts and stakeholders. She agreed that this was the appropriate time for branding and further work on the project name would be undertaken in the coming months.

 

Councillor Batey asked for clarification as to when the Leisure Transformation  Report would be going to Cabinet. The Corporate Director of Regeneration, Economy and Growth responded that the report would be going to Cabinet by the end of the year. 

 

Councillor K Robson asked whether there was a service link from the railway station to Durham City bus station. The Head of Transport and Contract Services commented that there was no service link as people tended to walk or make their own way to the bus station due to the close proximity, however he was currently looking at linking services from the City Centre and universities to the railway station.

 

Councillor K Robson then queried as to whether the authority when developing new buildings looked at recouping some of the costs via staffing levels, lighting etc and asked for more detail as to the police having accommodation within the police station.

 

The Head of Transport and Contract Services commented that with regards to efficiencies, the authority would look to reducing costs where possible and added that the new bus station had sustainable and improved lighting, including a mezzanine floor for improved surveillance and an open area which would hopefully deter antisocial behaviour and be more efficient and cost effective to clean. He also confirmed that the bus station provided office space for police presence, however this would not be occupied 24 hours a day.

 

Councillor J Miller agreed that it was the appropriate time to define the DLI Museum and Art Gallery project and that clarity needed to be provided on what would be available to residents of the county as soon as possible. He referred to the bus station and was pleased to note that there would be some police presence and highlighted his concern and the importance of discussions to resolve the current industrial action by bus drivers as many residents of County Durham rely heavily on public transport. The Head of Transport and Contract Services could not comment on the industrial action, however explained that work was ongoing to promote bus travel with the introduction of reduced fares across the whole of the North East to encourage a more desirable form of transport. He added that infrastructure improvements and work with bus operators would continue to monitor usage and bus provision and advised that feedback would be reported to the Economy and Enterprise Overview and Scrutiny Committee in due course.

 

Councillor C Lines was reassured that robust control processes and governance structures were in place and referred to the £628m public sector investment that leveraged the £1.4b private sector investment and asked for clarification as to how Durham were performing in relation to other local authorities. The Corporate Director of Regeneration Economy and Growth advised that the £1.4billion private investment was a cautious estimate and was a big challenge for County Durham, however overall it was a good return.

 

Councillor K Shaw commented that in relation to the Leisure Transformation Programme he was more comfortable in relation to the progress of the programme now that it had been confirmed that a report would be going to Cabinet in either November or December.

 

In response to a question from Councillor A Surtees regarding how the new power station would affect the development planned at the Jade site, the Head of Economic Development advised that the infrastructure support was ongoing to improve the junction with the challenge being ensuring that the energy supply to the sites was in place. He advised that he would provide further detail in relation to the impact on the development, however he confirmed that there was nothing to suggest that this would be a risk to the Phase 2 development on the Jade site.  The Head of Transport and Contract Services added that there was pressure on the A19 junctions, however work was ongoing to improve capacity together with work on the cycle bridge to encourage sustainable travel.

 

Councillor Surtees referred to the DLI Museum and Art Gallery project and suggested a possible name for the new building could be the Durham Innovation Centre Coffee Shop and Art Gallery. She highlighted concerns in relation to the £600,000 revenue pressure for running the building and commented that in the current financial climate, the money could be used for other local infrastructure work needed within the county. The Head of Culture, Sport and Tourism advised that the running costs were consistent with the size of the building and highlighted that County Durham was about pride of place. She added that currently there was no art gallery or culture space within Durham City and referred to the development of the Aykley Heads site and the potential vibrancy of the location which would be more attractive to organisations and provide economic and social gains.

 

Councillor B Moist noted the comprehensive report and presentation and had total confidence in Officers and the processes undertaken to manage the programmes. He asked whether the establishment of a Major Programmes Board had improved the efficiencies and effective delivery of the programmes and felt that the report focused more on processes and was unclear on actions taken. He referred to the bus station project and noted there were degrees of success, however the project had been delayed by 63 weeks, therefore questioned whether the project had been successful. In relation to The Story, he asked that details of cost in relation to the project be presented to Economy and Enterprise Overview and Scrutiny Committee following completion of the project. He also asked if there were any estimates in relation to the DLI Museum and Art Gallery construction costs and suggested it be categorised as an amber rating bearing in mind construction inflation costs. With regards to the Leisure Transformation Programme, he highlighted that the delivery completion date had not been provided and he was unclear what the reference to the cost-of-living crisis was in relation to. He then asked whether there were any other projects scheduled to be included in the Leisure Transformation Programme. He noted the amber ratings in relation to the bus station costs and timeframe and felt that both ratings should show red. He queried what could have been done to provide an amber rating and asked that a cost analysis be undertaken. He concluded by saying that he had benefitted from the recent training by the Service Grouping in relation to major programmes and was happy to meet with the Corporate Director of Regeneration Economy and Growth, with Councillor A Surtees to discuss further updates and data in relation to the major programmes and projects.

 

The Corporate Director of Regeneration Economy and Growth confirmed that the systems in place do help in the management and delivery of programmes and projects and that it was considered national best practice. She highlighted that the programme was bigger than in previous years and continued to grow, with better delivery and processes in place which provided accountability and clarity with regards to who was responsible for progressing projects. It was noted that costs were set out in the Cabinet report and were the forecasts to which the Service worked towards, and any changes would result in further reporting to Cabinet. With regards to The Story and the DLI MAG projects, she was happy to provide further information to a future Economy and Enterprise Overview and Scrutiny Committee meeting.

 

Councillor E Scott reminded Members that the DLI had always been the DLI Museum and Art Gallery and would not be helpful to re-write history. She agreed that further clarity was required which they were currently working on and commented that it would not be wise to make announcements before they had been agreed.

 

Councillor R Crute highlighted the need to separate from what the building was in the 1970’s and provide a new identity for this century. He made reference to The Story which was built to house the DLI collection in its entirety along with the written records. He added that focus needed to be on promoting what it was going to be and to get that message out to the residents of County Durham sooner rather than later.

 

Councillor M Stead commented that the colour system used was clear and was easily understood as to the various project stages and added that the colours would change as the projects progressed. He was delighted that the Major Programmes Board had been developed and noted it was a blueprint for other authorities. He referred to the DLI and highlighted the importance of branding correctly and it was his understanding that 11 kilometres of the DLI collection had never been seen and queried whether it was possible for both buildings to house the collection. With regards to the bus station, he asked whether lessons had been learned from the development which could be taken forward. The Corporate Director advised that as part of the Major Projects Board there were failsafe’s in place with regards to complex projects and a lesson’s learnt report would be prepared to improve awareness and increase expertise for future projects.

 

Resolved:

 

(i)     That the report and presentation be noted.

 

(ii)    That the Chair and Vice-chair meet with the Corporate Director of Regeneration, Economy and Growth to discuss regular reports on the progress of major programmes/projects coming to future meetings of the Economy and Enterprise OSC.