URL: https://rother.moderngov.co.uk/ieDecisionDetails.aspx?ID=1729

Decision Maker: Cabinet

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Purpose: To seek Cabinet Approval of the legal agreements, construction contract and expenditure required to deliver the proposed development.

Content: Members considered the comprehensive report of the Acting Director of Community that set out the history and current position of the Barnhorn Green NHS Development project; for the project to proceed a number of legal agreements and contracts needed to be approved.  Commercially sensitive information concerning the financial elements to be considered was attached at confidential Appendices A, B and C to the report.   Rother District Council (RDC) had originally acquired the land at Brooklands Road, Bexhill, in 2019 with the intention of undertaking a commercial revenue-generating development (light industrial and medical centre) and a budget of £10m (borrowing) was approved to obtain planning consents and construction.  Both elements of the project (light industrial and medical centre) provided important facilities to the local area which accorded with the original outline consent for major development at the Barnhorn Green site.  The status and availability of the original £10m budget would be established.      Since the grant of Planning Permission, £5m of Levelling Up Partnership (LUP) Grant had also been secured towards delivery of the project, although the light industrial units had been assessed as not commercially viable at the current time.    The proposed arrangement was that the GP Partners of Old Town and Little Common Surgeries would relocate their Little Common Surgery operations to the new Barnhorn Green Medical Centre, once constructed, whilst retaining a GP Service at the Old Town Surgery. The GP Partners would continue to operate a twin-centre GP service from those two buildings; in time, the Little Common Surgery building would become redundant and be an asset of the Council.   The proposed arrangements for the overall final scheme, which was now agreed in principle between all parties, was for RDC to enter into the following Agreements, simultaneously with the Integrated Care Board (ICB) and GP Partners:   §   Freehold purchase of Old Town Surgery from the GP Partners. §   Lease of Old Town Surgery to the GP Partners for 25 years. §   Freehold purchase of Little Common Surgery from the GP Partners. §   Lease of Little Common Surgery to the GP Partners for a short period – until the New Medical Centre was completed. §   Agreement for Lease with/by the ICB committing (a) RDC to delivery of a new Medical Centre, and (b) ICB to enter a Lease for 25 years on pre-agreed terms, and (c) the ability for ICB to sub-let the building to GP Partners as they saw fit.   Once the Agreements were in place, RDC would arrange construction of the new Medical Centre, procured as a JCT Design and Build Construction Contract where a single contractor was responsible for the design and construction, which streamlined the process for time and cost efficiency whilst simplifying project management.  It was noted that the NHS partners had good experience with Design and Build Construction Contracts and had written a performance specification for the construction.     Overall, the proposed arrangements would:   ?       Allow the project to proceed. ?       Make use of £5m LUP within an acceptable timescale. ?       Ensure delivery of a new large Medical Centre (GP Surgery). ?       Deliver a road accessing the remainder of the Council’s land. ?       Generate a modest return for the Council. ?       Recover expenditure to-date on the Project, including Land Acquisition.   There were several risks associated with the project which included significant delays or non-progression, jeopardising the LUF Grant; increased costs; low rent review increases impacting on the return achieved; and unforeseen delays which might include Planning Amendments and obtaining/implementing Ecological Licenses.   The Council was committing significant expenditure over the next 24 months with the freehold purchases and JCT Design and Build contract. This expenditure was partly covered by the £5m LUF Grant with the remainder (£7m) from borrowing. Overall, the anticipated expenditure was broadly in line with that already allowed within the Capital Programme.   Cabinet supported the project and recognised that, whilst there were some risks, overall this was an important project for the district which provided essential, state-of-the-art healthcare infrastructure. The proposal represented an appropriate balance between risk, deliverability and revenue.   RESOLVED: That authority be delegated to the Chief Executive in consultation with the Leader of the Council, together with the assistance of the Monitoring Officer, to enter the following Legal Agreements and Contracts:   1)     for the Freehold Purchase and Lease-back of Old Town Surgery, Bexhill-on-Sea;   2)     for the Freehold Purchase and Lease-back of Little Common Surgery, Bexhill-on-Sea;   3)     agreement for Lease of the proposed Barnhorn Green New Medical Centre with the Sussex Integrated Care Board;   4)     a JCT Design and Build Construction Contract for the construction of the proposed Barnhorn Green New Medical Centre; and   5)     all on final terms to the Chief Executive’s satisfaction and in accordance with the terms set out within this report and confidential appendices.   (Appendices A, B and C were considered exempt from publication by virtue of paragraph 3 of Schedule 12A of the Local Government Act 1972, as amended).

Date of Decision: January 6, 2025