The Chairman of the Council to answer any questions by the public of which notice has been given no later than midday three clear working days before the day of the meeting in accordance with Council Procedure Rule No. 12.
Minutes:
Question 1
Mr Riley to Councillor Ward, Leader of the Council
At the last meeting you affirmed your belief that the redevelopment of Corks Lane would break even or make a profit. The draft minutes of the Council’s last full meeting record your saying that “Babergh has never said that the project might make a slight loss”. Yet, Report Number BCa/22/4 suggests that the range of outcomes would include losses. Please tell us why you have ignored the loss making potential of this project when your own officers were flagging up that possibility.
Response from Councillor Ward, Leader of the Council
As you will have seen from the Cabinet decision in June, six options were considered and, based on the evidence provided, the one chosen was the one that provided the best balance between risk and return for the council. The decision has been made and work has now commenced.
I have to disagree with your assertion that report BCa/22/4 suggests a range of outcomes including a loss for our chosen option and that we have ignored this. I think you have misread it. The report clearly states the following in section 2.2: ‘On this basis Phase 1 and Phase 2a currently show a break-even development with the potential for a small profit (c. £50-100k), further profit could subsequently be available from Phase 2b.
I know you claimed at June’s Council meeting that we/I have said that the development would break even or make a slight loss. This is surprising for I have never said any such thing and, I hope you don’t mind my reminding you, you acknowledged that I did, in fact, say the opposite – that it would make a small profit – in your own blog written three weeks prior to that meeting.
Ultimately the profitability of any development is reliant on sale prices and the market at the time of sales occurring. Having said that, the most important thing is that this scheme will deliver positive outcomes for Hadleigh and the wider district, by providing high quality housing and investing in our district.
Question 2
Mr Ferguson to the Cabinet Member for Finance, Assets and Investments
I understand that Gipping Construction has been selected as Babergh’s builder for the redevelopment of Corks Lane and that Gipping is a local company. Can the Cabinet Member for Finance, Assets and Investment tell me if Gipping was chosen through a competitive tender process, and if so, how many other companies bid for the work? Has the contract to Gipping been awarded on a firm/fixed price basis, and was it awarded to the lowest compliant bidder?
Finally, to fully understand the risks that Babergh potentially faces with completing this development on time and on cost, will you provide a copy of the Tender documents provided to bidders (not the responses as they are assumed to be "Commercial in Confidence"), and give me an indicative percentage of the differences in bid price between Gipping and the other compliant bidders?
Response from Councillor Busby, Cabinet Member for Finance, Assets and Investments
Yes, Gipping was chosen through a competitive tender process carried out by Babergh Growth Ltd who are delivering this project on behalf of the council.
The contract to Gipping has been awarded on a fixed price basis based on the specification and employers requirements.
Yes, the contract was awarded to the lowest compliant bidder.
The tender documents have now been superseded by the contact that Babergh Growth Ltd has with Gipping so the tender documents are not relevant in assessing risks with completing the development on time and on cost. This will be controlled through management of the contract (that has a set completion date of April 24) as well as robust programme and risk management by the professional team. As we all know, projects can and will be affected by outside influences such as inflation, global supply chain issues and other world events, however claims are limited to those recognised through the contract.
The percentage difference between the top bidder and bottom bidder was circa 14%.
Supplementary Question from Mr Ferguson
Looking at Gipping Constructions website, there are three things I picked up in particular. One is about 65 of the contracts that have been awarded to them are for less than one million so quite small and, by my calculation, the average value of all the listed contracts and there are about 79 of them if you take the total value and divide it by 79 it comes to just less than a million pounds. So, my concern really is that we’re looking at relatively small numbers and they appear to have very limited experience of working on listed buildings. So, my question is against that company background, as Corks Lane is a high value project, did Babergh Council carry out a risk assessment of Gipping Constructions ability to deliver Corks Lane contract on time and on cost and if so, could I have sight of that risk assessment?
Response to supplementary question from Councillor Busby
Yes, Babergh Council did carry out a risk assessment and no sorry you cannot have sight of that risk assessment. Gipping Construction are a local company which is one of the things you were pleased to hear about, we have looked at the work they have done for the Council and for others and are happy with the quality of work, they provided a good tender at the lowest price and we feel we can work well with them. It’s a Babergh Growth driven project and Babergh Growth will ensure that we get delivered on time, as for the profit I keep hearing about, the first phase is marginal which is the conversion of the original building, the overall project will deliver a profit.
Supporting documents: