EXECUTIVE BOARD – 22nd January 2013

Subject: Ring Road Major Improvement Scheme and Procurement Corporate Director(s)/ Director(s):

David Bishop, Corporate Director, Development John Kelly, Corporate Director, Communities Andy Vaughan, Director of Neighbourhood Services Sue Flack, Director of Planning and Transport

Portfolio Holder(s): Councillor Jane Urquhart, Planning and Transportation

Report author and contact details:

Steve Hunt, Head of Service, Traffic and Safety, 4th floor, Loxley House, Tel: 87 65294 Email: steve.hunt@nottinghamcity.gov.uk

Key Decision Yes No Reasons: Expenditure Income Savings of £1,000,000 or more taking account of the overall impact of the decision

Revenue Capital

Significant in terms of its effects on communities living or working in an area consisting of two or more wards in the City

Yes No

Relevant Council Plan Strategic Priority: World Class Nottingham Work in Nottingham Safer Nottingham

Wards affected: Sherwood, Berridge, Basford, Leen Valley, Wollaton East and Lenton Abbey

Neighbourhood Nottingham Family Nottingham Healthy Nottingham Leading Nottingham

Date of consultation with Portfolio Holder(s): 21st December 2012

Summary of issues (including benefits to citizens/service users): The report recommends the approval to implement the Ring Road Improvement scheme and outlines a recommended procurement strategy to deliver this scheme and all capital highway works for the next four years.

Recommendation(s): 1 Authority be given to finalise third party land agreements and acquire permanently, possess temporarily and use the land identified within Appendix 1. 2 Subject to receipt of full funding approval by the Department for Transport, the approval be given to confirm the City Council’s contribution of £3.2million from the Local Transport Plan and agreed third party contributions as set out in this report. 3 Subject to receipt of full funding approval by the Department for Transport, the approval be given to commence delivery of the Ring Road Improvement scheme. 4 The Portfolio Holder for Planning and Transport is authorised to approve the Major Scheme Full Approval application submission to the Department for Transport subject to City Council’s funding contribution being no greater than set out in the report. 5 To establish a Highways Framework Agreement (jointly procured with Derby City) and the decision to award be delegated to the Director of Neighbourhood Services. This framework will support both the delivery of the Ring Road and other LTP highway works. 6 To delegate authority to both the Director of Neighbourhood Services and the Director of Planning and Transport to call-off contracts under the Highways Framework Agreement up to a value of £1million.

7 To make use of the Midlands Highway Alliance Medium Schemes Framework 1 (MHA MSF1) contract and to enter into a collaboration agreement with Leicestershire County Council to procure specialist engineering works. 8 To delegate authority to the Director of Neighbourhood Services (in consultation with the Director of Legal Services and the Director of Finance) to award a contract for the specialist works through the MHA MSF1 contract of over £1million in value.

1 BACKGROUND

1.1 The Ring Road is the principal strategic orbital route bypassing the city centre for

both traffic and public transport services linking a number of significant employers including two major hospitals, university campuses, Boots and Lenton Lane which generate significant levels of access traffic demand.

1.2 The road,provides an important strategic route for through traffic, intersecting with

the M1 motorway link roads of the A45, A52 (Trunk), and A610 to the west with links to the east and northeast via the A52 (T) and A46/A1; most other orbital routes are unsuitable for large traffic volumes, particularly heavy goods vehicles.

1.3 The Ring Road Major Integrated Transport scheme is a major congestion

reduction scheme which has been in development since 2001, intended to address problems identified through consultation with the public and key stakeholders. The key objectives are to improve journey times and reliability and to make the Ring Road a more attractive route for cross-city trips thereby reducing traffic in the City Centre and facilitating development of the City Centre by removing unnecessary traffic pressures which impede economic growth.

1.4 The scheme will provide orbital and radial capacity improvements, enhanced

interchange opportunities, integration with NET and improvements for pedestrians and cyclists including upgraded street lighting.

1.5 The scheme is not a stand-alone project; it forms part of the wider strategic vision

for the Local Transport Plan to deliver a world-class sustainable transport system which supports a thriving economy and enables growth.

1.6 Throughout the development of the scheme there has been significant

consultation with groups representing local businesses, public transport and freight operators, residents and cyclists which identified a range of issues and problems. In September 2003, 34,500 leaflets were distributed to residents and businesses located along the Ring Road seeking their views on the objectives and general principles of the City Council’s proposals.

1.7 The scope of the scheme changed in response to outcomes of the

consultation process to better reflect the concerns and aspirations of local residents and businesses.

1.8 In March 2010, the scheme was endorsed by the Secretary of State for Transport and provisional approval or ‘Programme Entry’ was given for Government funding.

1.9 An Expression of Interest (EOI) was submitted to the Secretary of State for

Transport in January 2011 confirming our wish to take the scheme forward in its originally submitted form. The estimated cost at the time of EOI was £32.1m with

an expected local contribution in the order of £5.5m. However, following the General Election, formation of the new Coalition Government and Comprehensive Spending Review in 2010, the Government indicated that the scheme would only progress if promoters:-

- Reduced scheme costs significantly - Increased the level of local financial contribution - Provided continued good Value for Money

1.10 In response, the Council secured significant cost reductions by reducing the

scope of the scheme. The revised scheme excludes certain elements of the original scheme but will however deliver a large proportion of scheme benefits by addressing the critical issues of congestion at key junctions and secure much needed investment to upgrade the condition and layout of this former trunk road.

1.11 Further consultation was undertaken in summer 2011 to provide an updated

position on the proposals. Overall it was confirmed that there remains strong local support for the scheme and very strong support for the key objectives.

1.12 A Best and Final Bid submission in September 2011 included a declaration by the

Section 151 Officer that the authority has the intention and the means to deliver the scheme. The total reduced scheme cost including risk and inflation is £16.175million.

1.13 The Secretary of State announced a reactivated Programme Entry approval in

December 2011; confirming funding for the scheme with a maximum DfT contribution of £12.8m administered as a capital grant under Section 31 of the Local Government Act 2003.

1.14 This allowed the City Council to complete the legal and procurement processes

following which a request for Full Approval can be made. Project Programme 1.15 The programme for key activities and milestones is summarised below:-

Key Activity Milestone Submission seeking Full Approval January 2013 Confirmation of Full Approval March 2013 Traffic Regulation Order consultation March 2013 Start on site April 2013 Scheme complete July 2015

Procurement Strategy

1.16 A key prerequisite for Full Approval is to have a preferred contractor and target price in place. It is intended that Nottingham City Council will be named as Principal Contractor. Highway Services will lead on delivery of a large proportion of works providing maximum flexibility on programme delivery together providing real employment and training opportunities through entry level recruitment, apprenticeships and work placements.

1.17 The agreed procurement measures align with the scheme submission assessed

against value for money, deliverability, carbon efficiency and maximising local training and employment opportunities.

1.18 It is proposed to follow the principles of Early Contractor Involvement (ECI)

developed from the City Council’s successful procurement strategy which delivered the Turning Point £11.7m Project to programme and budget. The strategy largely utilises the Council’s own skilled workforce in Highway Services and this will be supported by private sector partners employed through the Council’s Highway Framework Agreement (HFA) to undertake specialist work activities like road surfacing. This delivery model fully supports the City Council’s Commercialisation Agenda building upon cross-service technical expertise and proven success.

1.19 The current HFA is due for renewal in 2013; Highway Services are leading on a

new collaborative 4 year framework that will support both Nottingham City Council and Derby City Council on highway works. This work provides a significant opportunity to build on the success of the existing Highways Framework in collaboration with Derby City Council for use on the Ring Road Improvement Scheme. It is also proposed this will be used for other LTP and Highways capital schemes.

1.20 Specialist structural work activities fall outside the remit of the internal workforce and the supporting HFA. It is proposed these elements be procured through the Midlands Highways Alliance (MHA) MSF1.

1.21 The MHA is a collaboration of 16 local authorities with the objective of producing efficiencies in highway maintenance and procurement for its members. A framework contract has been prepared for schemes in the value of £0.5m to £10m. This contract has been competitively tendered by Leicestershire County Council, and use of this contract offers Nottingham City Council significant savings in the cost of procurement in comparison to letting a bespoke contract.

1.22 To use this contract, Nottingham City Council needs to enter into a collaboration agreement with Leicestershire County Council. This collaboration agreement transfers the obligations under the contract from Leicestershire to Nottingham City.

1.23 Utilising the MSF1 contract enables the City Council to take advantage of the

competitive rates and quality assessment obtained by the joint procurement process. In addition, by being part of the MHA with an active feedback network, the contractors are well aware of the need to maintain their reputation and perform satisfactorily for all alliance members.

1.24 The overall procurement arrangements ensure delivery of specialist elements,

flexibility in programming and resource targeting, and opportunities for local training and employment by requiring contractors to source staff through the Employer Hub. The Employer Hub is Nottingham City Council’s local employment and training service and will deliver opportunities for local people while providing a free recruitment and training service to meet the workforce needs of contractors. Land Acquisition

1.25 To facilitate the highway improvements, it is necessary to acquire third party land. The extents of the land needed are detailed in Appendix 1.

1.26 The Council have entered into negotiations with all relevant parties for the acquisition of land by agreement. The position with landowners is now firm with legal representatives involved to agree Heads of Terms.

1.27 Authorisation has been secured from the Highways Agency to use a parcel of

land at Crown Island under the Secretary of State’s ownership for the purpose of the scheme.

1.28 The necessary junction improvements will also impact on small areas of open

space owned by the City Council; along Valley Road between Hucknall Road and Edwards Lane and at Crown Island.

2 REASONS FOR RECOMMENDATIONS (INCLUDING OUTCOMES OF CONSULTATION) 2.1 The junction improvements and localised highway widening will increase capacity

at key junctions along the Ring Road route in conjunction with the introduction of extra traffic lanes. Improving the junctions is the key objective to reduce congestion to encourage traffic to use the Ring Road as a bypass for the City Centre, fulfilling the role as a principal strategic orbital route and providing improved accessibility to local employment and the capacity for economic development and housing and employment growth.

2.2 The proposals in this report provide for an effective procurement approach in the

delivery of this major infrastructure improvement scheme. The strategy is in line with the City Council’s financial and procurement regulations and is considered appropriate and will provide good value for money.

2.3 The acquisition and use of land, both temporary and permanent, is necessary to construct the scheme.

3 OTHER OPTIONS CONSIDERED IN MAKING RECOMMENDATIONS

Procurement Options 3.1 Other procurement model options considered were included within the scheme

Business Case. These are:- Option 1 - a single conventional construction contract, tendered for a period of 2 ½ years following completion of detailed design for the whole scheme; Option 2 - a number of separately tendered conventional construction contracts following completion of detailed design for the whole scheme; Option 3 - early contractor involvement (ECI)

3.2 Option 1 is the least favoured option. Unlike simpler ‘green field’ sites construction of the Ring Road Scheme Major would have significant inherent risks associated with major construction on a live highway network. Traffic management will be a significant cost and at high risk of cost escalation unless thorough planning and flexibility can be maintained throughout the project lifecycle. A conventional ICE 7th Edition tendered project for 2½ years would not offer this flexibility and the tendered sum increase as a result and inevitable programme disruption.

3.3 Option 2 could potentially provide greater flexibility and reduce the risk of cost escalation but still suffers from the consequences of late contractor involvement in traffic dominated construction schemes.

3.4 Option 3 is a complex process with no guarantee of value for money or that

costs are not necessarily constrained to target costs.

3.5 The delivery strategy proposed uses principles of ECI developed from the Council’s successful procurement strategy which delivered the Turning Point project to programme and budget. This option utilises the principles of ECI but uses the Council’s own workforce, resources and private sector partners through the HFA. This delivery model meets the assessment criteria, in particular maximising local training and employment opportunities.

3.6 There are sections of work that involve structural elements and so fall outside the remit of the internal workforce and the HFA. It is proposed these sections are procured through the MHA Medium Schemes Framework.

4 FINANCIAL IMPLICATIONS (INCLUDING VALUE FOR MONEY/VAT) 4.1 The total estimated cost of the Ring Road Major scheme is £16.175m. This is

significantly reduced from the original scheme of £32.1, the reduction being necessary to allow the scheme to progress following the Comprehensive Spending Review.

4.2 In assessing the Best and Final Bid for Programme Entry approval, the DfT

considered in detail the economic value for money of the proposals. The decision to grant Programme Entry and award scheme funding was based on an appraisal of the scheme, identifying the costs of developing and delivering the scheme compared with its operational benefits. With a benefit to cost ratio in excess of 6 (i.e. the benefits are worth at least £6 for every £1 invested), the Ring Road Improvement Scheme is placed in the ‘high’ Value for Money category.

4.2 Subject to confirmation of full funding approval by the DfT, the scheme will be

financed as follows:- DfT Contribution £12.8million City Contribution £ 3.2million Third Party Contribution £ 0.175million Total Scheme Cost £16.175million 4.3 The projected scheme expenditure profile is as set out in the table below and this

needs to be included in the capital programme:-

2011/ 12 £m

2012/ 13 £m

2013/ 14 £m

2014/ 15 £m

2015/ 16 £m

Total £m %

City Contribution

0.063 0.437 0.800 0.950 0.950 3.200 19.8

Third Party Contribution

0.025 0.150 0.175 1.1

DfT Funding Requested

5.120 5.120 2.560 12.800 79.1

TOTAL 0.088 0.437 6.070 6.070 3.510 16.175 100

4.4 It is proposed for the £3.200million City contribution to be funded by the LTP ITM

and Highway Maintenance allocations as follows:-

ITM (out of £4-5.5m pa)

£m

Maintenance (out of £2m pa)

£m

Total £m

2012/13 0.500 - 0.500 2013/14 0.600 0.200 0.800 2014/15 0.712 0.238 0.950 2015/16 0.712 0.238 0.950

Total 2.524 0.676 3.200 These sums are included in the current approved LTP. 4.5 The procurement proposals are supported by the Council’s Procurement Manager. 4.6 The risk of any overspend in the delivery of the scheme will lie with Nottingham City

Council as the Department for Transport will not provide further funding. As with all Highway schemes any Part 1 (Land Compensation Act 1973) claims would be received following scheme completion. Any claims must demonstrate depreciation in the value of an interest in land. Therefore, there is a residual risk that claims could be received as a result of these works which would be a further pressure on the LTP programme in 2015/16. If successful it is unlikely that this would exceed £100,000.

5 RISK MANAGEMENT ISSUES (INCLUDING LEGAL IMPLICATIONS AND CRIME AND DISORDER ACT IMPLICATIONS) 5.1 Risks are managed through a full operational Risk Register which will remain as a

project management tool for the lifecycle of the scheme. Continuing current practice, any new, changing and important risks and their mitigation and management, will be reported to the Ring Road Improvement Project Board. All key risks have been identified and plans to mitigate against them have either been completed or procedures are in place.

5.2 The highway framework will be managed through an established framework

board in order to commission highways works proficiently for both Nottingham and Derby. There is no financial commitment to use the framework.

5.3 Street lighting improvements were a key local requirement from residents. The

proposals include upgrading of street lighting which will have the benefit of enhancing people’s quality of life, improving road safety and help reduce crime and fear of crime.

5.4 The proposals in the report raise a number of legal issues. Firstly, in relation to the land

acquisition, the Council has the ability by virtue of powers contained in the Highways Act 1980 to acquire the requisite land either by agreement or by Compulsory Purchase Order (CPO). It is understood that negotiations with the individual land owners are near maturity and for this reason there is no proposal to make a CPO. If these negotiations break down then there is a risk of delay to the scheme. Consequently it is suggested that the requisite land should be acquired as soon as possible following scheme approval and certainly before the entering into of any delivery contracts. Similarly the Council will only be able to access the land temporarily with the agreement of the land owner.

5.5 The proposed contractual arrangements for the delivery of the scheme raise no significant legal concerns although care needs to be taken to ensure that where a framework is used that framework is still live and has not expired.

6 EQUALITY IMPACT ASSESSMENT (EIA)

Has the equality impact been assessed?

(a) not needed (report does not contain proposals for new or

changing policies, services or functions, financial decisions or decisions about implementation of policies development outside the Council)

(b) No (c) Yes – Equality Impact Assessment appended as Appendix 2

7 LIST OF BACKGROUND PAPERS OTHER THAN PUBLISHED WORKS OR THOSE DISCLOSING CONFIDENTIAL OR EXEMPT INFORMATION

Local Authority Major Schemes Best and Final Funding Bid September 2011 8 PUBLISHED DOCUMENTS REFERRED TO IN COMPILING THIS REPORT Nottingham Local Transport Plan 2011 – 2026 Medium Term Financial Plan 2012/13 – 2014/15 - Executive Board 21/02/2012 9 OTHER COLLEAGUES WHO HAVE PROVIDED INPUT Chris Keane, Highway Services Manager Tel: 0115 876 1363 Email: chris.keane@nottinghamcity.gov.uk Dave Jones, Senior Transport Planner Tel: 0115 876 3941 Email: david.jones@nottinghamcity.gov.uk Jim Driver, Strategic Finance Manager Tel: 0115 876 4226 Email: jim.driver@nottinghamcity.gov.uk Malcolm Townroe, Legal Services Manager Tel: 0115 876 4332 Email: malcolm.townroe@nottinghamcity.gov.uk Chris Grocock, Employment and Skills Officer Tel: 0115 876 2912 Email: chris.grocock@nottinghamcity.gov.uk

Page 1 of 3 of the Schedule RRM/ADF7692/Land Acquisition/Land Schedule December 2012

RING ROAD MAJOR IMPROVEMENT SCHEME LAND ACQUISITION SCHEDULE 2012

THE SCHEDULE

In the district of Nottingham City Council

Ref Interest Required Extent, description and situation of the land

Owners or reputed owners Lessees or reputed lessees

Occupiers (except tenants for one month

or less) 1 Freehold 195 square metres, or thereabouts, of land

adjacent south side of Crown Island subway Secretary of State for Transport c/o Highways Agency National Property and Disposals Ash House Falcon Road Sowton Exeter EX2 7LB

- Unoccupied

2 New Rights The right to enter upon 43 square metres or thereabouts, of land adjacent south side of

Crown island subway for all purposes in connection with the construction and

maintenance of the widened bridge on the adjoining land

Secretary of State for Transport c/o Highways Agency National Property and Disposals Ash House Falcon Road Sowton Exeter EX2 7LB

- Unoccupied

3 Freehold 834 square metres, or thereabouts, of land currently used as a car park of the University

of Nottingham Jubilee Campus

University of Nottingham University Park Nottingham NG7 2RD

- Occupied

Appendix 1

Page 2 of 3 of the Schedule RRM/ADF7692/Land Acquisition/Land Schedule December 2012

Ref Interest Required Extent, description and situation of the land

Owners or reputed owners Lessees or reputed lessees

Occupiers (except tenants for one month

or less) 4 New Rights The right to enter upon 486 square metres, or

thereabouts, of land currently used as a car park for all purposes in connection with the construction and maintenance of the bridge

widening and retaining wall supporting structure to carry the new highway and

footway on the adjoining land

University of Nottingham University Park Nottingham NG7 2RD

- Occupied

5 Freehold 306 square metres, or thereabouts, of rough grassland and shrubs to the east side of the

junction of Crown Island and Middleton Boulevard

Nottingham City Council Loxley House Station Street Nottingham NG2 3NG

- Owner

6 New Rights The right to enter onto 196 square metres, or thereabouts, of land to the east side of the

junction of Crown Island and Middleton Boulevard for all purposes in connection with

the construction of the footway and embankment on the adjoining land

Nottingham City Council Loxley House Station Street Nottingham NG2 3NG

- Owner

7 Freehold 210 square metres, or thereabouts, of land adjacent to the electricity sub station to the

south of Crown IslRefand

Western Power Distribution Herald Way Pegasus Business Park East Midlands Airport Castle Donnington DE7 4TU

- Owner

8 New Rights The right to enter upon 18 square metres, or thereabouts, of land adjacent to the electricity sub station to the south of Crown Island, for

all purposes in connection with the construction and maintenance of the widened

bridge, and highway on adjoining land

Western Power Distribution Herald Way Pegasus Business Park East Midlands Airport Castle Donnington DE7 4TU

- Owner

9 Freehold 2,459 square metres, or thereabouts, of part of Nottingham High School playing firlds and

land to the north eastern part of Valley Road/Hucknall Road island

Nottingham High School Waverley Mount Nottingham NG7 4ED

- Owner

Page 3 of 3 of the Schedule RRM/ADF7692/Land Acquisition/Land Schedule December 2012

Ref Interest Required Extent, description and situation of the land

Owners or reputed owners Lessees or reputed lessees

Occupiers (except tenants for one month

or less) 10 New Rights The right to enter upon 479 square metres, or

thereabouts, of school sports grounds to the north west side of the junction of Valley

Road/Hucknall Road island, for all purposes in connection with the construction of new

highway on adjoining land

Nottingham High School Waverley Mount Nottingham NG7 4ED

- Owner

11 Freehold 837 square metres, or thereabouts, of grassland to the north eastern part of Valley

Road/Hucknall Road island

Nottingham City Council Loxley House Station Street Nottingham NG2 3NG

- Owner

12 New Rights The right to enter upon 332 square metres, or thereabouts, of grassland to the east side of the junction of Valley Road/Hucknall Road

island for all purposes in connection with the construction of new footway, highway and

embankment on the adjoining land

Nottingham City Council Loxley House Station Street Nottingham NG2 3NG

- Owner

Appendix 2