Agenda item

The focus of the report is a post delivery scrutiny of the Sunspot commercial workspace in Brooklands, Jaywick Sands including funding arrangements, management arrangements and details of the lettings.

At this meeting the intention is to concentrate on the findings, costings, and project management around the project to the build complete point.

In accordance with the decision of Council on11 July 2023 (minute 37 refers) the Committee undertook a post decision scrutiny of the Sunspot commercial workspace in Brooklands, Jaywick Sands. As part of its enquiry, immediately prior to the Committees meeting, its Members had been provided with a tour of the new premises and the adjacent community garden. During the tour the Committees Members had met with the intended operator of the café on site.

The Portfolio Holder for Economic Growth, Regeneration and Tourism spoke to the Committee and expressed gratitude for the support received and provided an update on the Sunspot project, highlighting its positive progress. he mentioned the availability of 24 affordable commercial units, with 14 businesses already signed up, surpassing the initial expectation set out in its business plan. The operations and facilities manager, though absent for this meeting due to illness, was now employed to support tenants, and the Deputy Leader outlined the diverse spaces within the building, including a covered market, committee room, and a cafe with an experienced operator.

The Portfolio Holder also emphasized the potential for skills development and job opportunities within the project, citing the café's intention to take on apprentices. They acknowledged past challenges, including cost overruns and delays, attributing them to capital cost inflation and external factors such as the COVID-19 pandemic. Despite the challenges, he likened the project's journey to overcoming a "perfect storm" and acknowledged the collective effort to reach the current stage. He also acknowledged Essex County Council's funding support.

The Corporate Director for Place and Economy (Lee Heley) addressed concerns related to costs and provided a detailed timeline of the Sunspot project. The feasibility study commenced in January 2020, and the application for further funding to the local Enterprise Partnership was submitted in September 2020. The initial estimate was 13 units for £1.97 million. Changes, including an increase to 24 units and an additional £300,000, were made after advisors reviewed the scope in February 2021.

Members heard that tenders were sought in December 2021 for a £2.1 million project. Cost consultants estimated a potential increase to £2.7 million, but the lowest tender came in at £3.9 million. Despite challenges, including cost overruns and delays, the decision was made to continue, securing investment from partners, including Essex County Council. The construction contract was awarded in April 2022.

The Corporate Director for Place and Economy highlighted the unique challenges faced, including unexpected ground conditions and the need for additional funding, leading to a total cost increase of £760,000. Refinancing was necessary, involving discussions with partners around the refinance process. The speaker emphasized the importance of closely monitoring costs, refining project scopes, and considering potential challenges for future projects.

It was reported to the Committee that the cost increases in the project were due to capital costs going up globally due to COVID and the Ukraine war.

It was RESOLVED to RECOMMEND to Cabinet:

a)    That the positive news about occupancy rates for the Sunspot Centre, Jaywick Sands and the intentions around the on-site market be noted; and

b)    that the capacity and expertise of the Council in costing and programme managing major capital schemes of the Council be strengthened to avoid or minimise unforeseen “mission creep” in schemes and unrealistic cost assessments being presented as part of approval mechanisms (that then needing to be repeated when true market costings are subsequently identified).

It was further RESOLVED:

c) That delivery against the business plan compared with the experience in the first six months operation of the Sunspot Centre, Jaywick Sands be confirmed in the Committee’s Work Programme for April 2024.