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Brixton news, rumours and general chat - September 2017

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Good work, Windmill!

homeless-benefit-windmill-1.jpg


Musicians Against Homelessness Mini-Fest, Brixton Windmill, Sat Sep 2nd
 
editor said:
Lambeth fucks up again: Cost of Education Centre for Brixton Windmill more than doubles to £753,000 as Lambeth Council miscalculates price
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Have you read the linked report? That suggests it's not a 'fuck up' but that since the initial feasibility study was completed, the costs have increased due to: "a) cost inflation impacts, b) a falling GBP impacting on the cost of materials and c) rising cost of construction" from here. Its what happens on capital projects - that and costs (unless it's tendered as a design and build) can potentially increase, and timetables can slip.
 
snowy_again said:
Have you read the linked report? That suggests it's not a 'fuck up' but that since the initial feasibility study was completed, the costs have increased due to: "a) cost inflation impacts, b) a falling GBP impacting on the cost of materials and c) rising cost of construction" from here. Its what happens on capital projects - that and costs (unless it's tendered as a design and build) can potentially increase, and timetables can slip.
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So you think that accounts for more than doubling the costs?
It's a relatively small, short term project (funding was agreed less than a year ago) so I'm curious how inflation and a falling pound could ravage its budget so catastrophically and how none of this could have been anticipated. What materials is it using that have to be imported?
 
editor said:
Do all of them double their budgets in less than a year then?
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Some do, yes.

Raw materials are up 15% YOY. Remember, though, builders don't buy raw materials directly (so they don't buy lumber from a forester). Therefore you could easily see a rise of 20-25% in price. Most lumber is imported, as I understand it (open to correction on this point.) There is a lack of EU workers as well, as many are leaving, upping costs of labour. Inflation continues to rise.

They have, according to the report, run two full procurement processes - so they have proved that last year's price estimate isn't working in the market.

Also, it would seem they have engaged Squire to make cost cutting suggestions on the design - however, this being Grade II listed, those changes aren't appropriate.

It appears to be a function of two things - an underestimate in the first instance, and a years worth of Brexit volatility in the construction market. I'd agree there was a costings issue (a 50% overrun isn't (fixed on edit) unheard of, but it's not usual either), coupled with inflation, labour and Brexit.

Remember increased costs to run the building will occur as a result of inflation and Brexit factors as well, so the £6000 estimate to run the building may rise, too.

I'm no fan of Lambeth, but I doubt they miscalculated by 50%, probably more like 10-20% initially, then got unlucky with the economy. 10-20% for capital works isn't really out of line, IMO. It's not idea, but it's closer to the project overruns I see.
 
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I think Gleena 's answered it comprehensively.

The buzz article is just a bit ill informed and out for a pop - rather than understanding why the costs have increased. That then undermines the reputation of Jason's good investigative blogging.
 
Gleena said:
Some do, yes.

Raw materials are up 15% YOY. Remember, though, builders don't buy raw materials directly (so they don't buy lumber from a forester). Therefore you could easily see a rise of 20-25% in price. Most lumber is imported, as I understand it (open to correction on this point.) There is a lack of EU workers as well, as many are leaving, upping costs of labour. Inflation continues to rise.

They have, according to the report, run two full procurement processes - so they have proved that last year's price estimate isn't working in the market.

Also, it would seem they have engaged Squire to make cost cutting suggestions on the design - however, this being Grade II listed, those changes aren't appropriate.

It appears to be a function of two things - an underestimate in the first instance, and a years worth of Brexit volatility in the construction market. I'd agree there was a costings issue (a 50% overrun isn't (fixed on edit) unheard of, but it's not usual either), coupled with inflation, labour and Brexit.

Remember increased costs to run the building will occur as a result of inflation and Brexit factors as well, so the £6000 estimate to run the building may rise, too.

I'm no fan of Lambeth, but I doubt they miscalculated by 50%, probably more like 10-20% initially, then got unlucky with the economy. 10-20% for capital works isn't really out of line, IMO. It's not idea, but it's closer to the project overruns I see.
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So how often do similar sized projects double in cost (and possibly more)? Could you give me a rough percentage?

This is taxpayers money after all, so people have every right to be less than forgiving.
 
snowy_again said:
I think Gleena 's answered it comprehensively.

The buzz article is just a bit ill informed and out for a pop - rather than understanding why the costs have increased. That then undermines the reputation of Jason's good investigative blogging.
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It seems pretty straightforward to me.

Which bit of this do you disagree with?
It is alarming to see that estimation less then twelve months ago was able to come up with a figure that was so far removed from the actual cost.
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snowy_again said:
I think Gleena 's answered it comprehensively.

The buzz article is just a bit ill informed and out for a pop - rather than understanding why the costs have increased. That then undermines the reputation of Jason's good investigative blogging.
Click to expand...
I see no problem with questioning the competency of the project - one does not need to be an expert in a field to query why something has doubled in price. There may well be legitimate reasons for the increase, reasons that are esoteric & require knowledge of the industry to consider justifiable. I suppose a better approach might be to say "how have similar projects undertaken elsewhere, of comparable scope, that were costed around the same time fared by comparison". Is this an isolated case or have other such projects also seen comparable increases?
 
editor said:
So how often do similar sized projects double in cost (and possibly more)? Could you give me a rough percentage?

This is taxpayers money after all, so people have every right to be less than forgiving.
Click to expand...

Absolutely, taxpayers should test and question government expenditure. (Sorry if this is all too long a post.)

I don't have those statistics to hand, but would welcome anyone who has seen research. My business is contract law, so I naturally see them when they go really very wrong indeed (equally, I'm late to the law and have spent a large amount of time in project and programme management in this life, so I have experience on both sides.)

10-20% overrun, which I believe this to have been when the project was initially costed, is fairly normal. Most contracts have it in the tolerances. The current economic climate is, to put it mildly, bonkers for major capital projects. In the region of 50% plus overruns in my life in normal economic circumstances? Maybe 15-20%. As I said, it's not unheard of and it's not ideal. In my day to day work, I note that it's normally the scope that causes cost issues, either scope-creep (just adding one more thing until it blows up) or not being clear in the scope of the project in the first instance. Remember this is a very tiny project as things go for both the council and the designer.

But! (There's always a but...) I have no insight into the scope of the project, what Squires was contracted to do, who did the costing, if there was any sort of qualified surveyor type oversight, if, because it's charity work, there were other than normal arrangements, etc. So like everyone else here, I'm spitballing as to what happened as the only information I have is what was in the report, which I did read.

I think there's a middle ground between 'Lambeth fucked up' and 'this is totally business as usual NBD move on nothing to see' that's being missed here, that's all. It's not news that Lambeth fucks up spectacularly and often, I just don't think this is one of those times. I think (again, just back of the envelope calculations) that Lambeth could have done a bit better but also was stupendously unlucky.

I also think that FoTBW should check their running costs hold true, because I would love to have this built and be sustainable. I like to sit and look at the windmill on sunny days because I am a history nerd, and would make sure I donated to make it better.
 
Gleena said:
Absolutely, taxpayers should test and question government expenditure. (Sorry if this is all too long a post.)

I don't have those statistics to hand, but would welcome anyone who has seen research. My business is contract law, so I naturally see them when they go really very wrong indeed (equally, I'm late to the law and have spent a large amount of time in project and programme management in this life, so I have experience on both sides.)

10-20% overrun, which I believe this to have been when the project was initially costed, is fairly normal. Most contracts have it in the tolerances. The current economic climate is, to put it mildly, bonkers for major capital projects. In the region of 50% plus overruns in my life in normal economic circumstances? Maybe 15-20%. As I said, it's not unheard of and it's not ideal. In my day to day work, I note that it's normally the scope that causes cost issues, either scope-creep (just adding one more thing until it blows up) or not being clear in the scope of the project in the first instance. Remember this is a very tiny project as things go for both the council and the designer.

But! (There's always a but...) I have no insight into the scope of the project, what Squires was contracted to do, who did the costing, if there was any sort of qualified surveyor type oversight, if, because it's charity work, there were other than normal arrangements, etc. So like everyone else here, I'm spitballing as to what happened as the only information I have is what was in the report, which I did read.

I think there's a middle ground between 'Lambeth fucked up' and 'this is totally business as usual NBD move on nothing to see' that's being missed here, that's all. It's not news that Lambeth fucks up spectacularly and often, I just don't think this is one of those times. I think (again, just back of the envelope calculations) that Lambeth could have done a bit better but also was stupendously unlucky.

I also think that FoTBW should check their running costs hold true, because I would love to have this built and be sustainable. I like to sit and look at the windmill on sunny days because I am a history nerd, and would make sure I donated to make it better.
Click to expand...
Do you think that Squires may have come up with a design that looked suitably brilliant and portfolio-worthy but involved - perhaps - importing more materials than similar projects and thus held the project ransom to plummeting exchange rates? I'm not blaming them, I'm just trying to get my head around such a hefty increase.

I understand and appreciate what you've posted above but surely the doubling of cost (and quite possibly much more) is somewhat unusual for a relatively small scale and straightforward project?
 
Gleena said:
Some do, yes.

Raw materials are up 15% YOY. Remember, though, builders don't buy raw materials directly (so they don't buy lumber from a forester). Therefore you could easily see a rise of 20-25% in price. Most lumber is imported, as I understand it (open to correction on this point.) There is a lack of EU workers as well, as many are leaving, upping costs of labour. Inflation continues to rise.

They have, according to the report, run two full procurement processes - so they have proved that last year's price estimate isn't working in the market.

Also, it would seem they have engaged Squire to make cost cutting suggestions on the design - however, this being Grade II listed, those changes aren't appropriate.

It appears to be a function of two things - an underestimate in the first instance, and a years worth of Brexit volatility in the construction market. I'd agree there was a costings issue (a 50% overrun isn't (fixed on edit) unheard of, but it's not usual either), coupled with inflation, labour and Brexit.

Remember increased costs to run the building will occur as a result of inflation and Brexit factors as well, so the £6000 estimate to run the building may rise, too.

I'm no fan of Lambeth, but I doubt they miscalculated by 50%, probably more like 10-20% initially, then got unlucky with the economy. 10-20% for capital works isn't really out of line, IMO. It's not idea, but it's closer to the project overruns I see.
Click to expand...

Unless my maths is way off, we're not talking about a 50% increase but a 91% increase. £393000 to £753000 is an increase of 91.60% isn't it?
 
You can see the squires design on the web link that Jason posted and you linked to. It's plain, simple and fits the environment. It's not a vanity project.
 
snowy_again said:
You can see the squires design on the web link that Jason posted and you linked to. It's plain, simple and fits the environment. It's not a vanity project.
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It says this.
Designs respond to the site’s agricultural history by creating a contemporary crafted pitched roof structure using a Douglas Fir timber frame, and cladding the exterior in a dark weatherboard. The structure is book-ended by two gable walls in a black brick to reference the tar sealed Windmill tower.

Internally, the main space features the exposed timber frame and full height sliding doors opening onto a decked external terrace overlooking the park. A grain store, kitchen, administration, cycle parking and WC’s are also provided.
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Imported Douglas Fir can't be cheap.
 
editor said:
Do you think that Squires may have come up with a design that looked suitably brilliant and portfolio-worthy but involved - perhaps - importing more materials than similar projects and thus held the project ransom to plummeting exchange rates? I'm not blaming them, I'm just trying to get my head around such a hefty increase.

I understand and appreciate what you've posted above but surely the doubling of cost (and quite possibly much more) is somewhat unusual for a relatively small scale and straightforward project?
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To your first point: No I don't think so, but they may have. It is, after all, just a two room classroom, some storage and a kitchen that has to fit into a Grade II listed site. I don't think the UK manufactures much in the way of raw materials for building in the first place these days, but I'm quite happy to be wrong, that's beyond my remit.

I did say it was not unheard of, and not ideal. No, it's not usual. It's just not scandalous in the current climate. Given the explanation in the report, I would not expect to be having tense legal discussions about it in this instance, for example. (That said, if it were a commercial project I might, but only to the extent of what could be done to back out of the contract or to make them perform to the initial price.) What I would have expected is for the report to have elaborated a bit more in terms of how the price was arrived at and been less frustratingly general as to the contribution of inflation and raw materials had to the increase.

But as I said, we're speculating. Without the information in my previous post (scope, oversight, charity vs commercial development, etc.) neither of us have a way to know how the cost was arrived at in the first place. The only clear facts are that the construction industry as a whole is suffering from abnormal price rises due to several factors, that Lambeth has tested the price two times, and that it is now more expensive than they said it was going to be.

And now I've defended Lambeth, and need a shower.
 
The increase is so large that I don't think it can be blamed solely or even mainly on rising construction costs.

If fingers of blame were to be pointed, I might point them at the initial Quantity Surveyor who produced the 2016 cost estimate. The QS is supposed to be the cost expert. The architects would have developed the design in consultation with that QS. If the QS says "yes we can build that design for the budget" then you can't blame the architects. To some extent you can't blame the council either, if they took that QS's advice in good faith. Unless they employed someone clearly not qualified to do the job. I note a new QS was appointed to do the re-costing. Of course the full story will probably be rather more complicated than what is written in the report. It's certainly true that scope creep can be a problem and is commonly the cause of cost over-runs. Was the brief or design significantly altered after the initial costing? Maybe, in which case it might not be the QS's fault.

Something a bit similar appears to have happened with the LJ works project. Reading the council report about that, my question was similarly whether they'd employed a competent QS to do the budget costing.
 
On the way in to brixton I could see what looks like a new glass dome - on top of buildings on the right approaching from north, on Brixton road. Anyone know which building it tops? Is it new or have I just never noticed it before?
 
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