Purpose

Proposed decision –
The Deputy Leader and Cabinet Member for
Finance, Corporate and Traded Services to agree to:
 

APPROVE the Henwood Project and
NOTE the contribution towards Corporate Landlord Medium-Term
Financial Plan savings targets;

APPROVE the
allocation of£1.5m from the Capital Programme Budget 2024-34
as approved by County Council on 19 February 2024 for the delivery
of the proposed capital works at the Henwood Depot
site;

APPROVE
 the disposalof the existing Henwood
office building following delivery of the Henwood Depot Project;
and

DELEGATE
authority to the Director of Infrastructure, in consultation with
the Deputy Leader and Cabinet Member for Finance, Corporate and
Traded Services, to enter into the necessary contracts and legal
agreements to facilitate the implementation of the
decisions.

 
Reason for the
decision
The proposed decision involves capital
expenditure and capital receipts in excess of £1m.
 
Decision will involve allocation of capital
budgets towards the delivery of new office and welfare
accommodation within the Henwood Depot site to ensure the
operational requirements of the highways service and provide
authority to dispose of the Henwood Office building.
 
Background
 
The Henwood Depot is currently operated by
Amey Highways under KCC’s Highways Term Maintenance Contract,
however the contract is currently subject to procurement and was
considered under key decision 24/00086. KCC owns several freehold
depots across the County which are provided on a leasehold basis to
contracted service providers.
 
The contracted-out service cannot be delivered
in the absence of suitable a suitable depot network across the
county.
 
Several units within the Henwood Depot site
are coming to the end of their operational lifespan and require
replacement. Other facilities, including welfare accommodation are
currently provided within the main Henwood Office building.
 
Due to KCC’s financial challenges the
Henwood Office in Ashford was partially closed on the 1 of February
2023, to save money on utility and FM costs. KCC Staff operating
from the Henwood Office were able to work from the nearby Kroner
House as part of KCC’s Hybrid Office estate, whilst to
support the winter service a small number of KCC Highways staff
continued to operate from the building where their roles required
close collaboration with the external highways contractor. Welfare
facilities on the ground floor of the office building were also
used by the external contractor as facilities were not available
within the depot site.
 
The relocation of Highways
staff to Kronor house has now been made permanent. However there
remains a need to:
 

Provide collaboration office space
for KCC Highway staff and external contractors to work together in
close proximity to the depot site
Provide office and welfare
facilities for use by the external contractor, as per the contract
specification
Maximise potential revenue savings
and generate a capital receipt for the council which cannot be
achieved while circa 75% of the Henwood Office building remains
vacant.
Replace the accommodation on the
depot site as appropriate where it has come to the end of
life.

 
The proposed decision allocates capital budget
towards the delivery of a new modular building within the Henwood
Depot site. This building would provide the required welfare and
collaboration space, whilst also addressing outstanding condition
issues at the Depot.
 
Following the construction of the new modular
building the Henwood Office building will become surplus to the
Council’s operational requirements, and therefore consent is
sought to dispose of the property to generate a capital receipt and
deliver a substantial revenue saving against Medium-Term Financial
Plan (MTFP) target and a capital receipt.
 
Options (other
options considered but discarded)

Do nothing –
Rejected
Retention of the
Henwood Office building as an investment asset –
Rejected
Full reoccupation of the Henwood
Office building by Highways or other KCC services –
Rejected
Part occupation and
let of Henwood Office building – Rejected

 
How the proposed
decision supports Securing Kent’s Future 2022 -2026:

Securing Kents Future - Budget
Recovery Strategy.pdf

Proposed decision will approve
capital spend in order to deliver a capital and revenue savings to
the Council as required by its Medium Tern Financial Plan. The
construction of dedicated welfare and office accommodation on the
Depot site will generate an ongoing revenue saving to KCC.
Proposed decision will authorise the
disposal of a surplus building releasing a capital receipt.
Proposed decision promotes the
efficient use of the KCC corporate estate by reduction of surplus
space in its office accommodation. 
Proposed decision reduces size of
KCC estate in line with commitments to Carbon reduction and in
compliance with adopted asset management strategy. Improves the
condition by replacing life expired assets.

 
Financial
Implications

Approval to spend £1.5m
inclusive of contingency allowance from the Capital Programme
Budget 2024-34 as approved by County Council on 19 February
2024.
Projected to deliver ongoing revenue
saving of circa £150,000 per annum excluding rental
income.
Capital receipt
exceeding £1m.
Whether recognised through saving as
part of new Highways contract or open market rent pass through, the
enhancement of facilities on the Depot will be offset by an ongoing
saving/rental income.
Reduction in ongoing maintenance
liability

 
Legal
Implications  
Specialist advice will be
sought via the Office of General Counsel for the implementation of
asset management and construction matters including:

Leasehold
arrangements with external highways contractor
Procurement and award
of construction contract for new build
Disposal of surplus
Office accommodation.

Equalities
implications
An Equalities impact assessment
(EQIA) has been completed and will be kept under review as project
progresses. There are no equalities implications arising from the
sale of a surplus property.

The new modular accommodation
will be built to comply with current building regulation
standards.
 
Data Protection
implications
A Data Protection
Implication Assessment (DPIA) screening has been
undertaken and no requirement for a full DPIA was identified. This
will be kept under review as the project progresses.
 

Decision

The Deputy Leader
and Cabinet Member for Finance, Corporate and Traded Services to
agree to:
1. APPROVE the Henwood Project and NOTE the
contribution towards Corporate Landlord Medium-Term Financial Plan
savings targets;
2. APPROVE the allocation of £1.5m from
the Capital Programme Budget 2024-34 as approved by County Council
on 19 February 2024 for the delivery of the proposed capital works
at the Henwood Depot site;
3. APPROVE the disposal of the Existing
Henwood Office building following delivery of the Henwood Depot
Project; and
4. DELEGATE authority to the Director of
Infrastructure, in consultation with the Deputy Leader and Cabinet
Member for Finance, Corporate and Traded Services, to enter into
the necessary contracts and legal agreements to facilitate the
implementation of the decisions.