Decision details

Consideration was given to a report of the Deputy Chief Executive which sought to update the Cabinet on the preferred option for implementing improvements to the heating system at the Blessed John Henry Newman College.

On 15 December 2010 a contract was agreed between Oldham Council and Oldham BSF Limited (PFI Contractor) to construct Blessed John Henry Newman College. Oldham BSF Limited (then owned by Balfour Beattie) completed construction in September 2012. 

In 2016 Balfour Beattie sold its majority shareholding in Oldham BSF Limited to an investment fund within the Amber Infrastructure Group. Since the school opened in 2012, the day to day operational management of the school has been undertaken by Engie Limited (the Facilities Management subcontractor).

Following practical completion of the School in 2012, several building defects became apparent including:

·       Issues with the heating system,

·       Roof leaks in the atrium area,

·       Inability to control temperatures in certain rooms due to a variety of factors.

Between 2015-2017, works have taken place to improve the heating system.

In late-2017, Oldham BSF Limited committed to undertake and finance remedial works to improve the heating system across the School.

In April 2019 the Council was informed that Oldham BSF Limited was no longer prepared to finance the works until the outcome of an adjudication with its subcontractors was known. The adjudication process was intended to establish liability for the rectification works.

At this time, the adjudicator’s decision had been repeatedly delayed from summer 2019 to January 2020. The remedy of failing to rectify building defects and other performance shortfalls was by way of deducting monies from the monthly Unitary Charge that the Council paid to the contractor. To date, the Council has levied deductions in respect of the building issues and other service performance shortfalls.

The Council had commissioned an external contractor to carry out a full investigation to assist with implementing improvements to the heating system.

In December 2019 the Council set out its required expectations and actions of the PFI Contractor from January 2020.

The Council confirmed works had been carried out over the Christmas period and it was recognised this was a short-term solution and the longer-term solution required was detailed at Item 18 of the agenda.

Options/Alternatives considered;

Option 1 - Continue to monitor the contract and levy deductions where applicable.

Option 2 - The Council to prepare for implementing improvements to the heating system using its own subcontractor

Option 3 - Issue a formal warning notice to the Contractor with a view to ultimately terminating the contract.

RESOLVED – That the Cabinet would consider the commercially sensitive information contained at Item 18 of the agenda before making a decision.