Agenda item

To consider the report of the Deputy Chief Executive on progress of the Building Schools for the Future project.

Appendix 1 to this report is designated exempt under Access to Information Procedure Rule 10.4(3)

The Deputy Chief Executive submitted a report on progress of the Building Schools for the Future project.

 

Following consideration of Appendix 1 to the report designated as exempt under Access to Information Procedure Rule 10.4(3), which was considered in private at the conclusion of the meeting,  it was

 

RESOLVED –

(a)  To note the information in the report and its appendices providing details of the process and negotiations undertaken and work carried out to date in relation to the Leeds BSF Project (“Project”) and to support and confirm the decision of the PPP/PFI Coordination Board, under section 3.1 of the powers delegated to it by Executive Board on 13 October 2005 to submit the Final Business Case for the Project in advance of this meeting of this Executive Board.

 

(b)  To note the powers of the Council as referred to in paragraph 5.3 of the report to enter into the Project Documents and that confirmation of the Council’s powers will be contained in the report from the Council’s legal advisers referred to in paragraph 5.4 of the report.

 

(c)  That approval be given to the financial implications for the Council of entering into the Project Documents as detailed in Appendix 1, and to the maximum affordability threshold for the City Council in relation to the Phase 1 PFI contract of £12.952m, as set out in Appendix 1.

 

(d)  To note the comments set out in Appendix 1, that the PFI element of Phase 1 remains good value for money for the Public Sector.

 

(e)  To note that based on the information provided in Appendix 1, the Project is affordable by the Council, and to agree a further injection into the Capital Programme for the two Design and Build Schools, as recommended in Appendix 1.

 

(f)  To note that work is currently underway and is expected to lead to the provisional assessment of the Director of Corporate Services that, on the information and advice provided, and in accordance with proper practices, no liabilities will arise which will result in the City Council being required to recognise a fixed asset in any balance sheet required to be prepared by the City Council in accordance with such proper practices, for the financial year in which the agreement will be entered, for the purposes of Regulation 3 of the Local Authorities (Capital Financing and Accounting) (England) Regulations 2003.

 

(g)  To note that the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) will apply to transfer staff currently employed by the City Council and Education Leeds from the respective service commencement dates for each PFI school and that ongoing communication and consultation is taking place on this.

 

(h)  To note that an admission agreement will be entered into in connection with this project to enable those transferring employees of PFI schools who are currently members of the West Yorkshire Pension Fund to retain active membership of that scheme and to permit new employees to have similar benefits.

 

(i)  That approval be given to the award of contracts for the implementation of the Project to the Environments for Learning consortium (E4L) to include (but not by way of limitation) the award/entry into of the following contracts:

 

·  in relation to the Phase 1 PFI schools of a PFI Project Agreement to a special purpose company to be established by E4L as a subsidiary of the   Local Education Partnership (LEP);

 

·  subject to approval by Executive Board Members to investment in and governance arrangements relating to the LEP (the subject of the separate report to this Board), the award of a Strategic Partnering Agreement to the LEP to be established by E4L (including exclusivity in relation to Major Capital Projects as detailed in the separate report);

 

and

 

·  in relation to the Phase 1 design and build schools the award of design and build contract(s) to the LEP or a special purpose company established by   E4L as a subsidiary of the LEP

 

  and, in connection therewith, the Deputy Chief Executive be granted delegated powers (or in his absence the Director of Corporate Services) to give final approval to the completion of the Project, including (but not by way of limitation) the terms of the following:

 

(i)  Strategic Partnering Agreement

 

(ii)  The Shareholders Agreement

 

(iii)  The Project Agreement (phase 1 schools)

 

(iv)  The Funders Direct Agreement

 

(v)  The Pensions Admission Agreement

 

(vi)  The Design and Build contract(s) (phase 1 schools)

 

(vii)  Arrangements to appoint independent certifiers to assess the quality of the PFI and Design and Build contractors’ work

 

(viii)  Appropriate collateral warranties and

 

(ix)  Governing body agreements with schools as appropriate

 

Together with any other documentation ancillary or additional to the above necessary for the completion of the Project (‘Project Documents’)

 

subject to

 

(A)  DFES approval of the Final Business Case

 

(B)  the Deputy Chief Executive (or in his absence the Director of Corporate Services) being satisfied that the Project remains within the affordability constraints set out in Appendix 1

 

(C)  Receipt of a report satisfactory to the Deputy Chief Executive (or in his   absence the Director of Corporate Services) from the Council’s external legal advisers, as described in Appendix 2 of this report and

 

(D)  The Director of Corporate Services (or in his absence the Chief Officer – Financial Management) assessment on the balance sheet treatment in relation to the PFI contract as set out in paragraph 4 of Appendix 2 of this report.

 

(j)  That the Director of Corporate Services, as the statutory officer under section 151 of the Local Government Act 1972, or in his absence the Chief Officer - Financial Management, be authorised to sign any necessary certificates under the Local Government (Contracts) Act 1997 in relation to the Project.

 

(k)  Approve that, in respect of certification under 7.10, and subject to the advice of the Director of Legal and Democratic Services, a contractual indemnity be provided to the Director of Corporate Services in respect of any personal liabilities arising from the certification.

 

(l)  That approval be given to the execution of the Project Documents, by affixing the Council’s common seal and/or signature (in accordance with Articles 14.4 and 14.5 of Part 2 of the City Council’s Constitution) and to approve that the Director of Legal and Democratic Services (or any other officer of the Council authorised by her) take any necessary further action to complete the Project including any final amendments to the Project Documents and give effect to members’ resolutions and delegated decisions referred to in these recommendations.

 

(m)  That the Director of Children’s Services be authorised to implement any post completion arrangements necessary to monitor and administer the contract documentation (subject to the approval of the PPP/PFI Co-ordination Board under the Council’s Governance arrangements for PPP/PFI contracts.

 

(n)  That approval be given to the submission of this report, the minutes of this meeting of the Executive Board, and such other information, and including any necessary amendments as the Deputy Chief Executive may approve to the Final Business Case, to the Department for Education and Skills and Partnerships for Schools.

 

(o)  That delegated powers be granted to the chair of the Education PFI/BSF Project Board (in consultation with the Director of Corporate Services and the Director of Legal and Democratic Services) to:

 

(i)  authorise preparation, mobilisation, and enabling works to be carried out in advance of 1 March on appropriate terms;

 

(ii)  subject to being satisfied that the risks of such an approach are appropriate, authorise terms to enable early works on site to be commenced in advance of financial close if such close is anticipated to be delayed beyond 28 February.

 

(p)  That the intention to offer briefings to political groups and to arrange a seminar for members, on this decision and the one referred to in minute 155 be noted.

 

(This decision was exempt from Call In by reason of urgency as detailed in paragraphs 2.8 and 2.9 of the report).