DELEGATED POWERS REPORT NO.

1520

SUBJECT: To appoint an external commercial property Estate agent for the search of possible new Barnet Depot relocation sites. Control sheet All of the following actions MUST be completed at each stage of the process and the signed and dated report MUST be passed to Governance Service for publishing
All reports 1. Governance Service receive draft report Name of GO Date 2. Governance Service cleared draft report as being constitutionally appropriate 3. Finance clearance obtained (report author to complete) 4. Staff and other resources issues clearance obtained (report author to complete) Name of GO Date Name of Fin. officer Date Name of Com. officer Date Name of TU rep. Date Name of Legal officer Date Name of P&P officer Date Name of officer Date Name Date Name of GO Date Name of GO Date Name of GO Date Not applicable Not applicable Philomena Jemide 1T December 2011 Andrew Nathan 6 December 2011 Andrew Nathan 6 December 2011 Chris Booth 25 November 2011 Chidilim Agada 13 January 2012 Chidilim Agada 13 January 2012 Chidilim Agada 09 December 11 Chidilim Agada 9 December 11 Sue Templeman 14 December 11

5. Trade Union response received (Staffing issues only) 6. Legal clearance obtained from (report author to complete) Policy & Partnerships clearance obtained (report author to complete) Equalities & Diversity clearance obtained (report author to complete) The above process has been checked and verified by Director, Head of Service or Deputy (report author to complete)

7.

8.

9.

10. Signed & dated report, scanned or hard copy received by Governance Service for publishing 11. Report published by Governance Service to website Officer reports: 12. Head of Service informed report is published and can be implemented. Cabinet Member reports: 13. Expiry of call-in period 14. Report circulated for call-in purposes to Business Management OSC members & copied to Cabinet & Head of Service

Chidilim Agada 13 January 2012 Not applicable

Date Name of GO Date Date

ACTION TAKEN BY OFFICER UNDER DELEGATED POWERS (EXECUTIVE FUNCTION)

Subject

Appointment of an external commercial property agent to find properties suitable as Barnet depot relocation sites. Commercial Director

Officer taking decision Date of decision

Summary

12 January 2012
To procure the services of an external commercial property agent to find a site or sites suitable as depot sites to provide parking, storage, salt barn and a vehicle maintenance facility. Amanda Allen, Corporate Programmes, Commercial Services Directorate. George Church, Principal Valuer, Property Services, Commercial Directorate

Officer Contributors

Status (public or exempt) Wards affected Enclosures Reason for exemption from call-in (if appropriate)

Public Mill Hill None Not Applicable

Contact for further information: Amanda Allen, Corporate Programmes, Commercial Services Directorate. Email: amanda.allen@barnet.gov.uk Ext: 2417 Serial No. 1520

1. 1.1

RELEVANT PREVIOUS DECISIONS Cabinet Resources Committee 19 January 2009 (Decision Item 5) approved the principle of the relocation of the Mill Hill depot. Cabinet Resources Committee 19 January 2009 (Decision Item 14) approved the principle of exploring the potential options for a land owners agreement for the Mill Hill East AAP area and depot site subject to a viable business plan, apportionment of costs and receipts being finalised and a development programme. Cabinet (special meeting) 11 August 2009 (Decision Item 5) approved the sale of the Councils land holdings at the former Friern Barnet Sewage Works, Pinkham Way to the North London Waste Authority, subject to reservation of 4.5 acres for the Council to retain and construct a new depot facility. Cabinet Resources Committee 2 November 2009 (Decision Item 8) approved the Council entering into a formal joint venture and landowners agreement at Pinkham Way subject to finalisation of a business plan and legal terms. Cabinet Meeting 29 November 2010 (Decision Item 14) approved the revised relocation proposals to Pinkham Way for the Councils operational depot facilities. CORPORATE PRIORITIES AND POLICY CONSIDERATIONS The Corporate Plan commits the Council to providing better services with less money. A key principle of the medium term financial strategy is to continually review the use of Council resources. It has been found that there are insufficient internal resources to conduct the in depth search that is required to find suitable, value for money alternative sites for the Councils depot within the required time frame. It is therefore proposed that the Council appoints a firm of private practice industrial property search agents with the necessary skills and resources to seek and deliver a suite of potential property opportunities suitable for the relocation of the depot or if one suitable site cannot be identified, sites for its three principal operational parts. RISK MANAGEMENT ISSUES Any risks relating to the appointment will be managed through the Councils project management methodology and scrutinised on a regular basis by the relevant Project Board.

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1.3

1.4

1.5

2. 2.1

3. 3.1

3.2

A risk assessment has been carried out with regards to the use of the selected property agent and the main issues listed have been summarised in the following table:

Risk

Residual Risk Likelihood Impact High

Consequences / Mitigating Actions

Poor performance of consultant

Low

Delay and additional cost. Property agents to be approached to tender for the work have been chosen on the basis of their experience of dealing with similar property. The appointment is for a fixed term of 3 months.

Consultant insolvency

Low

Medium

Delay and additional costs. The agents to be invited to tender have been operating in the market for many years. Their extensive presence in the commercial property market in North London may provide evidence of financial competence.

Contract goes over budget

Low

Low

Firms will tender a % of the capital value of properties offered on a freehold basis and a % of the open market rental value of the property agreed for leasehold property. It is anticipated that the total of the fees paid should not exceed 75,000. This will depend on the value of the property bought and it is possible that if a property or properties were found that fitted the Councils requirement very closely, with little cost of adaption being required, the fee could exceed 75,000. If that somewhat unlikely scenario were to become a possibility, further formal authority from the Council would be sought. The fee will only be payable if the matter proceeds to completion. If it was decided that fee expenditure was too much the acquisition of the particular property triggering a fee in excess of 74,999 could be abandoned at no cost to the Council.

4. 4.1

EQUALITIES AND DIVERSITY ISSUES Pursuant to The Equality Act 2010, public sector organisations have a responsibility to consider equality as part of every procurement. The council is also under an obligation to have due regard to eliminating unlawful discrimination, advancing equality and fostering good relations in the contexts of age, disability, gender reassignment, pregnancy, and maternity, religion or belief and sexual orientation.

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This duty, also, applies to a person, who is not a public authority but who exercises public functions and therefore must, in the exercise of those functions, have due regard to the general equality duty. This includes any organisation contracted by a local authority to provide services on its behalf. The role for this duty in this procurement, is to make sure that those who might bid for the contract are not discriminated against, which is largely consistent with the requirements of the EC Treaty referred to at paragraph 6 below. USE OF RESOURCES IMPLICATIONS (Finance, Procurement, Performance & Value for Money, Staffing, IT, Property, Sustainability) The services of an external commercial estate agent will be funded by Mill Hill Depot Relocation Project The maximum fee liability to be entered into will be 74,999 which is fully contained within the overall Depot Relocation budget.

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5. 5.1

5.2

The works will be procured in line with Council Contract Procedure Rules in partnership with the Corporate Procurement Team. Five informal written tenders will be obtained from suitably experienced agents. LEGAL ISSUES Procurement processes will comply with the European procurement rules and the Treaty obligations of transparency, equality of treatment and non discrimination, as well as the Councils Contract Procedure Rules. The public procurement regulations apply whenever a contracting authority whether by itself, or through a third party, seeks offers in relation to a proposed public works supply or service contract, the value of which exceeds certain financial thresholds. Only contracts which exceed a specific value are subject to the EU wide tendering requirements contained within the public procurement regulations. The stated value of the proposed contract for an external commercial property agent is below the relevant threshold. Contracting authorities are still required to comply with the Treaty on the Functioning of the European Union (formerly the EC Treaty principles) in the way they carry out procurements and also to obtain value for money. These principles apply to all procurements with a cross-border interest, whether or not the full procurement regime applies. This means that the contracting authority is expected to ask itself whether there is a market for these services in other member states and if so what form of appropriate notification and advertisement should apply before an award of contract. From the nature and value of the proposed services, it seems unlikely that there will be a sufficient degree of cross-border interest for the duty to advertise to be engaged.

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CONSTITUTIONAL POWERS Constitution-Part 3- Responsibility for functions-6- Powers Delegated to Officers-General Power-Chief Officers can take decisions in all matters where they have managerial or professional authority. Contract Procedure Rules section 5.5 tender acceptance thresholds. Under Table 5-1, Director/Head of Service can authorise and accept a contract where the total lifetime value of the contract does not exceed 156,422. BACKGROUND INFORMATION The Council has sold its Mill Hill Depot and the Council owned site available at Pinkham Way N11 is too small for the relocation of the entire depot operation. It is therefore necessary for the Council to either purchase the freehold interest in a site or take a lease of a site, in the open market. A search for suitable sites by Property Services commenced in May 2011 and at that time the Councils property requirement was registered with the Estate Agents Clearing House, (EACH) which circulated the requirement to all agents operating in the north London area. The extent of the search area has been set as the A1055 to the east, the M25 to the north, Staples Corner to the west and one mile south of the North Circular to the south. To date 29 properties have been considered and 6 remain as possibilities. There is a much better supply of the type of property sought east of the A10, but this is too far from Barnet. The property or properties that are needed for the depot are considerably larger than the usual type of industrial property available in the market and it is acknowledged by agents that, despite the countrys economic down turn there is a shortage of industrial property. Furthermore, Barnet does not have as significant provision of such property. Given the deadline of December 2015 to fully vacate the Mill Hill Depot in addition to the time period required to obtain planning permission and to potentially build or alter existing premises, the Council must seek to secure a suitable site for the Depot relocation as soon as is practicably possible. Commercial agents selling and letting industrial property have the necessary commercial insight to successfully identify suitable industrial properties both currently but also soon to be placed on the market. Their services may be deployed at a fee by clients seeking to purchase property. Given the scarcity of internal resource available, the timescales involved and the commercial property insight afforded by professional commercial property agents, it is proposed that a suitably experienced firm of agents with good contacts in the industrial property market in North London be appointed to act on behalf of the Council in finding suitable premises for the Depot relocation.

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8. 8.1

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Initial research indicates three regional agents in Enfield, and in West Hampstead, and two agents based in the West End of London, known to have extensive contacts concerning industrial property and who have been proactive concerning the search for sites to date will be invited to tender informally for the appointment.

8.7

In accordance with the Councils Contract Procedure Rules, a written contract will be entered into with the successful tenderer. In order to ensure the Council is getting the best value for money from the appointment, the terms of the contract will state that fees will only be paid for introductions that the Council was not previously aware of and which proceed to legal completion of the letting or sale. All decisions on property selection and completion of purchase will remain within the Councils control.

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9. 9.1 10.

LIST OF BACKGROUND PAPERS None. OFFICERS DECISION

I authorise the following action 10.1 To invite tenders from suitably experienced external commercial property agents seeking to identify suitable properties for the Councils Depot relocation. 10.2 That, subject to the completion of all necessary contractual documents, and financial checks, the selected external commercial property agent be appointed to find a property, or properties, to enable the Barnet depot to be re-sited.

Signed By

Craig Cooper Commercial Director

Date

12 January 2012