Issue details

20/00056 - Capital Construction Programme - Delay costs to projects as a result of COVID-19



KCC has a significant capital construction programme that has and will be, adversely impacted by COVID-19 pandemic. A review has identified over 30 capital projects, which are at risk due to contractors having stopped work or reported delays due reduced labour and material supply issues. Where provided for in the contractual arrangements contractors are able to claim for relief under the construction projects. There may also be additional costs associated with the implementation of the government’s Procurement Policy Note 02/20 guidance for construction contracts.  In addition to the financial impact, there is a risk that due to the delays without mitigation measures that KCC will be unable to meet its statutory responsibility to deliver sufficient school places in 2020, 2021 and 2022 academic years. The initial assessment has focused on the delivery of school places in September 2020 and forecast financial impact up to December 2020.




To agree to;


a)      approve up to £7.89m of additional funds to cover the cost of temporary accommodation solutions, contractor relief payments and contractual claims across the capital construction programme where already approved via key decision or covered by appropriate delegated authority; and


b)      delegate authority to the Director of Infrastructure, in consultation with the Cabinet Member for Finance, Corporate and Traded Services and the Cabinet Member for Education and Skills to finalise the contractual terms and enter into any associated documentation.


Decision type: Key

Reason Key: Expenditure or savings of more than £1m;

Decision status: Recommendations Approved

Division affected: (All Division);

Notice of proposed decision first published: 01/06/2020

This decision will be taken under urgency procedures.

Reason for urgency:
The assessment of the impact on the capital programme has been undertaken as quickly as possible working with Schools, Stakeholders and Contractors. KCC is contractually obligated to agree the relief claims where these are provided for under the contracts and there are increasing requests from contractors for KCC to apply the Cabinet Office PPN guidance to assist with financial pressures that are being experienced by the contractors. These measures now need to be urgently applied so to support the supply chain.

The most significant initial impact for KCC is the delivery of the Basic Need programme and ensuring that KCC is able to meet its statutory duties to provide school places for September 2020. In order to achieve this and secure the temporary accommodation and any temporary works, orders are required to be placed on 1 June 2020.

Anticipated restriction: Part exempt  - View reasons

Decision due: 1 Jun 2020 by Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services
Reason: Urgent Decision - for immediate implementation

Lead member: Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services

Lead director: Rebecca Spore

Department: Strategic & Corporate Services

Contact: Andrew Chauvin, Capital Commissioning Consultant Tel: 03000 417953 Email:


Public consultations have previously been conducted on all school expansion projects. Public consultations have been undertaken on all capital projects where planning consent is required.


Decision progressed via statutory urgency process – required Non-exec Member consultation conducted.


Financial implications: The proposed expenditure is as a redirect result of the impact that the COVID-19 pandemic has had on the delivery of the Council's construction programme and is outside of the budget allocations provided for in the capital programme and revenue budgets. The current assessment has focused on the assessment of the impact of school places for September 2020 and the forecast financial impact up until December 2020. It is proposed to include the additional costs (Capital and Revenue) as part of the Council's COVID-19 return to government. There is a risk that the Council may not recover all of its COVID-19 related expenditure.

Legal implications: Where the contracts already provide for relief KCC is already contractually obligated to operate the contract. The application of the Government Procurement Policy Note 02/20 - Guidance Notes for Construction Contracts, will be used to support any variations required to the contracts. In the absence of mitigation action in relation to the school projects due to complete for September 2020 that KCC will not be able to meet its statutory duties to provide school places.

Equalities implications: An impact assessment has not been carried out, but it should be noted that failure to implement measures to offset delays to building contracts will in turn delay the delivery of special needs school places which are particularly in demand.