Derby City Council

Market Hall transformation: Council needs at least another £15m to complete it.

Photo: Construction Enquirer

The Market Hall in Derby is a great asset for the City Centre. Built in 1866, it is a Grade II listed building. By 2017 it needed significant roof repairs, and work to transform it into a modern retail destination.

In 2017, Derby City Council launched, what it referred to as a Transformation Programme 2018-21, allocating a budget of £11.4m – “Funded by Derby City Council”


By November 2020, the budget had escalated to £26m, had become reliant on Government funding for completion, and had no clear vision of what the transformation would be.

Background

The first stage ( Phase 1) was the roof repairs which was planned as a 3 year project (2018-21) followed by

” an internal and external reconfiguration that will breathe new life into the property”

– the “Transformation”.

The original project literature, and the 19 March 2018 press release stated:

“The cost of the roof improvement is budgeted at £4.9 million and this is being funded totally from the Council’s capital budget.” (Derby City Council brochure)

In February 2018, Wates Construction, along with Pick Everard were appointed to complete Phase 1. The Wates contract was awarded for £5.3m

Wates has been appointed via the East Midlands Property Alliance (empa) framework, which is managed by Scape Group, a public-sector organisation dedicated to creating ongoing efficiency and social value via the built environment.” (Wates website 27/2/18)

Scape Group, is a company owned by Derby City Council, along with 6 other local authorities. Wates is part of that framework; in 2018 they were also working on the £2.5m refurbishment of the ground floor of the Council House, and contracted for the £7.8m extension of Murray Park school.

Pick Everard is a shareholder in Perfect Circle JV Ltd who worked on the ill-fated Assembly Rooms refurbishment project ( and whose contract was terminated), and have benefited from £2.5m worth of Derby City Council business since January 2019. Pick Everard is providing “project management, quantity surveying, building surveying and principal design services, including the scaffolding works  to carry out surveys to determine the level of refurbishment works required”

“The scaffolding system is an extensive and impressive piece of architecture in its own right, designed by Derby-based construction consultants Pick Everard.”  (Derby City Council brochure)

The report in the 12 June 2019 Cabinet meeting highlighted that there were some cost pressures regarding the scaffolding but that it will all be contained within the overall budget.

In September 2019,  as Derby City Council awarded Perfect Circle JV Ltd a £291k contract for professional services on the Market Hall project, a press release was issued by the Council “blaming” Perfect Circle for slipping the Assembly Rooms project by 1 year.

By May 2020, the project was spiralling out of control. The Cabinet report (4.3) confirmed that the original budget of £11.18m (cf £11.4m) was due to cover Phase 1 and 2. However, they were declaring that the roof repairs would absorb nearly the entire budget, without any indication of the revised forecast.

“Phase 1 is forecast to be delivered within the £11.18m budget envelope, alongside small scale internal reconfiguration works. The Government’s Future High Street Fund gives us an opportunity to deliver a more ambitious transformation” ( Cabinet report 13/5/20)

By the 11 November 2020 Cabinet Meeting, Perfect Circle’s contract had been terminated for poor professional service, and  some of the reality was starting to be declared.

Approval was sought to increase the cost of Phase 1 by nearly £4m, resulting in an overspend from the original plan of just over £9m.  The total budget now only included some early design fees for Phase 2 (the costs of the whole transformation were planned in the original £11.18m).  The costs of Phase 2 were reported in the meeting as being “just under £10m” which would take the entire project to around £26m vs the original plan of £11m. The Council is trying to fund the Phase 2 costs from the Government’s “Future High Streets Fund”.

The Council has used “market experts”, National Association of British Market Authorities (NAMBA) to prepare:

“a vision for the new Market Hall, input to the detailed design of Phase 2 and an options assessment and advice for the future operation of the market. This work has informed the project brief”

The President of NAMBA is Cabinet Member, Cllr Mick Barker.

Why the cost overrun?

In last week’s Cabinet meeting, part of the overrun was blamed on Perfect Circle for not correctly estimating the amount of copper and bricks required. Also, “unforeseen” was the need for netting to be installed to protect people from falling materials , costing £300k.  There have been cost increases associated with Covid and delays due to supply issues – but nothing which explained an additional £15m

Steve Caplan, the Council’s Director of Property Services is also quoted as saying in the Executive Scrutiny Board on 10 November 2020 when referring to the beginning of the project:

“..at that time no one was even envisaging scaffolding, and the scaffolding alone is running into millions of pounds. The second part was the transformational work which wasn’t part of the original vision…so that’s some of the history of the property that we’ve inherited today”

Except, that this contradicts the Council’s original publicity brochure

 

 

 

 

Comment

The refurbishment of an old building might uncover some hidden complications which result in additional costs and that would be understandable…it just needs explaining clearly, if that’s the case.

A bid has been put in for nearly £10m for the transformational work, and a response is expected soon. Cllr Shanker, in the Cabinet meeting, tried to prise out from the Leader, Cllr Poulter, some facts about the Phase 2 proposal:

“…so can you simply tell us, what this money, that Derby is investing into the Market Hall for Phase 2 will actually give us, rather than words like ‘vibrancy’ and ‘transformation’, what physically and practically does it deliver”

Rather than providing a concise summary of the vision, Poulter, chose to avoid the question, and replied, with some contempt:

“You’ve seen the plans, I’m sure you know more detail than that Baggy. The full details are being worked in conjunction with partners, and they’ll be announced as and when they’re fully costed..”

Which implies that the specification, and costings for Phase 2 are not known, despite a funding bid of nearly £10m having been submitted to the Government….and what happens if the costings exceed the £10m?

Spending money to make the Market Hall a retail destination to be proud of is a laudable objective. It may well cost more than the original plan and, if explained, transparently, will no doubt coalesce support.  Vague and dismissive responses, fob-offs and re-writing history doesn’t inspire confidence in the Council’s competence in managing major projects.

Categories: Derby City Council

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