Recovery Programme Wessex

Date 29 July 2014

Version V3.2

Author Carol Holt v1.0

Loreta Adams v2.0 Loreta Adams v3.0 Loreta Adams v3.1 Sara Robinson v3.2 Final

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1. Introduction .......................................................................................................... 4 2. Urgency of the work ............................................................................................. 5 3. Proportionate approach to justification ................................................................. 6 4. Investment priority ................................................................................................ 7 5. Value for money and change management .......................................................... 8 6. Governance ......................................................................................................... 9 7. Procurement strategy for recovery works ........................................................... 10 8. Key delivery risks ............................................................................................... 12

9. Recommendation…………………………………………………………………......... 14

APPENDICES Appendix A Wessex urgent and emergency recovery programme for winter 2013/14 surge and storm damage - outcome of LPRG ‘lite’ for FSoD approval Appendix B Wessex other Environment Agency priority recovery repairs arising from military and engineering inspections – outcome of LPRG ‘lite’ for FSoD approval Appendix C Exception Report template

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FINANCIAL SCHEME OF DELEGATION (FSoD) COVERSHEET

1. Project name

Wessex Recovery Programme

Start date December 2013

End date March 2015

Business unit

Wessex Programme National Recovery

Project ref. FSoD ref & date tba

2. Role Name Post Title

Project Sponsor David Jordan Executive Director of Operations

Project Executive Nick Gupta Area Manager

Project Manager Tracy Sparrow Area Recovery Manager

3. Risk Potential Assessment (RPA) Category Low Medium High

4. FSoD schedule Description

Delegation

Regional – up to Environment Agency – up to

A1 Projects (includes FCRM revenue) £5m £5m

A2 FCRM capital project within approved strategy £10m capital £100m WLC Defra/£5m capital NAW

A3 FCRM capital project outside of approved strategy

£5m capital £100m WLC Defra/£5m capital NAW

A5 Consultancy project £300k £500k

T2 Purchase or lease of land and buildings £1m purchase/£50k pa lease £5m

5. FSoD value £k

Preparation costs for Form A/Business Case/PAR/FCRM Strategy n/a

Project costs 27,403

Whole Life Costs (WLC) of FCRM Project or Strategy n/a

6. Required level of Environmental Impact Assessment (EIA)

N/A

Low

Medium

High

7. FSoD approver name Post title Signature Date

David Jordan Executive Director of Operations

19/08/2014

Mark Sitton-Kent John Leyland

Director of Operations Sub for Mark Sitton-Kent

15/08/14

Nick Gupta Deputy Director Area Manager

6/8/14

FSoD consultee name Post title Signature Date

Richard Nunn LPRG Chair RED

AMBER

GREEN

LPRG Lite Carol Holt/David Cotterell/Andy Shore

8. Form G Form G value (£k)

Regional FSoD ref.

Head Office FSoD ref.

Latest FSoD authorised cost (£k)

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Definitions The Recovery Programme comprises two sub programmes:

a. Urgent and emergency recovery programme

Our urgent and emergency recovery programme includes work to repair flood or coastal erosion risk management assets damaged in the storms 5 December 2013 to 31 March 2014 that are either Environment Agency or other Risk Management Authority and that were submitted to LPRG Lite by 17 April 2014. This date was set by Ministerial Recovery Group. The target date for either completion or having suitable temporary measures in place to ensure communities are protected going in to winter is 31 October 2014. This is the Programme against which we report progress to Ministerial and Officials Recovery Groups, the Environment Agency Board and Directors. It includes Somerset Moors and Levels.

b. Environment Agency priority recovery programme

Those Environment Agency recovery repair works that emerged as a result of the military and additional engineering inspection carried out in March-April 2014. It also includes some survey work that is outstanding. This programme is predominantly for Environment Agency assets in high consequence areas that deteriorated 5 December to 31 March and is a key element of the repair programme that returns our assets to the 97% at required condition target. The target date for completion is March 2015 with an assumption we will accelerate work and complete as much as possible before winter.

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1. Introduction

Winter 2013/14 was exceptionally stormy and brought the wettest winter for England in 250 years. Communities faced every type of flooding as a series of twelve major storms from December through to February crossed the country. Record levels of rainfall, river flows, sea levels, wave heights and groundwater were recorded.

Every month through the winter saw surge activity around our coasts; 5/6 December 2013 saw a storm surge coincide with spring tides to produce many record

water levels exceeding some of those of the East Coast Surge of 1953; 24 December 2013 saw the lowest barometric pressure since 1886 in the United

Kingdom. This storm was accompanied by very high rainfall intensities, especially in the south east during the Christmas period, of the type normally associated with summer thunderstorms.

5 January 2014 saw the highest ever recorded water levels and largest waves in a 50 year observation record on the west coast.

February 2014 saw prolonged and widespread inland flooding for communities notably on Somerset Moors and levels, the Thames Valley and along the River Severn.

The continued prolonged rain through the winter caused record groundwater levels until late March.

Since the beginning of December 2013, Environment Agency flood risk management assets have protected 1.4 million homes and businesses from flooding. However, England’s flood and coastal erosion risk management assets have been tested and many damaged. In response to the severe weather, and the damage it caused to valuable flood defence assets across England, the Government has given £270 million additional Flood and Coastal Erosion Risk Management Grant in Aid (FDGiA) to the Environment Agency. £175 million of the additional FDGiA is being managed by the National Recovery Programme. £30m was for 2013/14. Of the remaining £145 million:

Purpose of funding February

Announcement

March

Announcement

Total

2014/15 2015/16

Cap

£m

Rev £m

Cap

£m

Rev

£m

Cap

£m

Rev

£m

To repair to assets damaged in

winter 2013/14 flood incidents

including local authority

(capital) and other risk

management authority assets

751 60

2 135

Somerset Moors and Levels 101 10

Total 85 60 145

1 exact capital/revenue split to be determined

2 £60m runs from 2014 through to 2015/16

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We have prioritised the work to:

protect people, property and land be ready for the next spring tides be ready for winter 2014/15 £10m for Somerset Levels and Moors Bring assets back up to KPI target of 97% at required condition by March 2017.

In Wessex there are 98 Environment Agency led projects at £21,290k managed as individual or grouped projects. 45 of these projects relate to delivery of the 20 Year Action Plan on the Somerset Levels and Moors. The Area Manager will ensure timely reporting on progress to the National Recovery team and is accountable for the delivery of their local programme of works. In Wessex there are 38 other Risk Management Authority led projects at £6,113k managed as individual or grouped projects. The Area Manager will ensure timely reporting on progress to the National Recovery team and will encourage delivery of their local programme of works. The individual Risk Management Authorities are responsible for submitting relevant data to the grant administration team at the Environment Agency who will oversee budget controls. This submission, under Section A3 of the Financial Scheme of Delegation for a flood risk management project outside of an agreed strategy and reporting through the Executive Director of Operations, is for the Recovery Programme in Wessex.

2. Urgency of the work

Works in the urgent recovery programme (at Appendix A) are moving at pace to reduce current and significant risks to people and property. Government has stated that repairs are to be complete for next winter so we have set the target date of 31 October 2014 as meeting this deadline. Where this is not possible, clear contingency emergency flood plans will be set in place to ensure communities are protected. For other priority repairs that emerged as a result of the military asset inspection, and subsequent engineering inspections, (Appendix B) we will aim to accelerate repairs ahead of the coming winter but our target for completion is March 2015. Clear contingency plans will be set in place to ensure communities are protected through winter 2014/15. Given the urgency, high level screening and assurance has been undertaken by a

streamlined Environment Agency Large Projects Review Group (LPRG Lite). The

assurance process is confirming that the investment:

is justified against the key appraisal criteria;

is appropriate to the damage/repairs needed;

reduces the risks to communities from damaged assets within the budgetary

timescales set by Defra;

is proportionate to the scale of individual works;

is either emergency response related or clearly linked to a specific asset; and

the process is compliant with the Coastal Protection Act 1949

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To ensure fast delivery, the projects were initially individually identified and costed and grouped into phases for Programme Appraisal Report (PAR) assurance by the Large Project Review Group Lite (LPRG Lite) with FSoD approval by the Executive Director of Operations. The phases are multi Area and comprise revenue and capital expenditure. As at 16 July 2014, there are 892 urgent projects with agreed costs of £115,231k in 2013/14 and 2014/15 across eight phases (1, 2, 2a, 3, 3a, 3b, 3c and 3d). This includes £3,926k of external funding.

In addition, as at 16 July 2014 there are 142 priority Environment Agency recovery related projects that emerged as part of the military and engineering inspections in March and April 2104 (phase 4). The works approved under the previous phases have now been grouped by Area and we have produced reworked Area PARs. This will provide local ownership of the recovery programme and will enable change management of the projects, whether scope or cost or both, that does not delay construction but remains within the requirements of FSoD and proper treatment of public funds. The advantages of this approach are:

Areas have the accountability to manage within their FSoD;

Clear change management and ownership; and

Area Recovery Managers own their Area programme, including cost and efficiency.

It was agreed at the Recovery and Learning Programme Board, that comprises Defra Flood representatives, on 20 June 2014 that we adopt this approach to ensure we manage change control in the most effective way. The programme spend comes under FSoD Schedule A3. Although individual projects are split between revenue and capital expenditure, this is all within the recovery budget allocation from Defra and revenue spend is included in the PARs.

3. Proportionate approach to justification

A national prioritisation of the reported defects based on responses to key appraisal questions in the summary of asset defects has been completed. This is based on:

Compliance with SMP policy or any subsequent latest information derived from agreed coastal and tidal strategies;

Consideration of the relative consequence of the asset system (SAMP); Understanding and quantification of costs and benefits, particularly if it is proposed to

exceed the minimum amount of repairs in order to secure the defence; and Recognition that works do include for surveys, incident response, temporary works

and public safety activities.

Where recovery works submissions were not compliant, LPRG Lite asked for more detail, or sought an explanation as to why the proposed works should proceed. For works over £750k 6 we are seeking a short supplementary business case. These are shown in the table below.

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Risk Management Authority

Project

Agreed Budget

Environment Agency Preston Beach Sea Defences £800k

Environment Agency Northmoor, Saltmoor, Currymoor Pumping station

£857k

Christchurch Borough Council Christchurch Beach Replenishment Scheme

£900k

Environment Agency Northmoor, Saltmoor, Currymoor Pumping station

£3,143k

Environment Agency AIR Bridgwater (Manning Incident) £1,000k

Bournemouth Borough Council Bournemouth Beach £1,440k

Environment Agency Somerset Levels and Moors Dredging and Disposal Programme

£5,700k

4. Investment priority

Works in this Recovery Programme have needed to move at significant pace in order to reduce current and significant risks to people and property following the December 2013 tidal surge, Christmas and new year flooding and ensure completion for winter 2014/15. Given this urgency, high level screening and assurance has been undertaken at a national level by LPRG Lite. This has provided the following benefits:

Ensured that works were planned for areas of highest priority based on risks to people, homes and property, but also acknowledged the influence of any legal requirements, critical infrastructure, Defra funding policy and longer term policies for the management of flood risk.

Highlighted where estimated costs may present issues of affordability that may necessitate a review of the scope of the proposed works.

Identified those works that are genuine damage repair and need urgent attention for expenditure.

Some of the items of work relate to more detailed survey of existing assets, temporary works, repairs to gate seals, structural joints and public safety works.

LPRG Lite utilised a Red/Amber/Green status that enabled LPRG Lite to determine clear outcomes to the works assessment. These were:

Red – Not recommended for Recovery Programme (based on information provided)

Amber – Additional information required (i.e. clarification required on key issues) Green – Recommended for Recovery Programme

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The recommended programme of recovery works for your Area has passed this assessment.

5. Value for money and change management

At this stage cost estimates, which are based on information from Area Asset Management teams, are very broad-brush. This is due to the pace at which individual works have been developed. The National Recovery Team has taken on the monitoring and reporting of recovery expenditure and efficiency savings. The cost envelope for the works is built up around the ‘green lighted’ activities for that Area and sets a budget for approval of £19,889k capital and £7,514k of revenue. £27,403k requires FSoD sign off and this includes £805k of external funding. Any Capital Grant money to be paid to other Risk Management Authorities (RMA) delivering schemes through the Recovery programme must be accounted for separately, as this funding is ring fenced.

For change within the Area allocation of £26,598k

For recovery projects within the Area allocation, Areas may choose to use Area

Recovery Managers, Area Portfolio Boards or Project Assurance Boards (where Area Portfolio Boards are not currently established) as being responsible for assuring change management within their programmes of work and PAR value.

Change will be managed through Exception reporting. Change must not move the works beyond recovery works and repair from damage

caused during the winter 2013/14 flood events. For changes to Local Authority and Internal Drainage Board projects, the normal

grant administration process must still be followed as well. The individual changes to projects will be reported in Area via a simple exception log

to the National Recovery Team. The exception log will be provided by the National Recovery Team and form part of your routine reporting. This will ensure that details will be available for each of the projects if required.

Area Manager approval of the Area exception reports will be required. These will not be individually logged on the FSoD database.

For change where the consolidated forecasts of the projects within the Area PAR reach the Area Form G trigger point This is when the consolidated project forecasts, within the Area PAR, exceed the assured area allocation and trigger levels are reached for an Area PAR Form G. The National Recovery Team and Area Managers will manage the overview of Area PAR level spend and forecasts.

The Area will be required to submit a PAR Form G to the National Recovery Team if

the Area PAR requires a change in funding and assurance. Please send all

correspondence to the National Recovery mailbox.

Individual project documentation may be required to support formal assurance and

FSoD approval of PAR level Form Gs by the Executive Director of Operations. See

above on exception reporting.

The Area PAR Form G will summarise the changes/increases and estimate the

additional funds required to deliver the remainder of the work.

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The trigger point when change management will be required will use the same approach as the Form G requirement for an individual project:

GREEN Total PAR cost forecast / actual is less than 85% of the approval value.

AMBER Total PAR cost forecast / actual is 86% to 95% of the approval value.

RED Total PAR cost forecast / actual are more than 96% of the approval value.

LPRG Lite will review all Recovery Area PAR Form G reports. Depending on value, either the Director of Operations or the Executive Director of

Operations will review the proposed overspend and increase in budget required for that Area PAR.

The National Recovery Team manages the reporting mechanism for increases in Area PAR value and will manage the overall Form G process for the recovery works.

6. Governance

Our National Programme Governance is shown below: Recovery Project Sponsor: David Jordan Project Board: FCRM Directorate David Rooke Strategy & Investment Pete Fox and Alison Baptiste Incident Management John Curtin SE Director Howard Davidson Business Finance Phil Winrow Allocation & Programming Ken Allison Media & Corporate Communication Lisa White Evidence Catherine Wright Environment & Business Liz Parkes Defra Dan Osgood/Paul Murby

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National Recovery team:

The National Recovery team established and responsible for managing and supporting recovery within the Environment Agency is:

National Recovery Team

Deputy Director National Recovery Nick Moore

National Recovery Manager Carol Holt

National Recovery Programme Manager Loreta Adams

National Recovery Programme Officer Michael Charles

National Learning & Recovery Advisor Aqeela Akhtar

LPRG Lite

Chair Richard Nunn/Carol Holt

Assurance David Cotterell, Carol Holt, Richard Nunn, Andy Shore

Finance Melissa Mathur

Defra Paul Murby, Celia McNally

Area Recovery team:

Area Recovery Team

Recovery Programme Executive Nick Gupta

Recovery Programme Manager Tracy Sparrow

PAB/Area Portfolio Board

Chair Nick Gupta

Assurance Steve Dodwell

Finance Lindsay Joyce

7. Procurement strategy for recovery works

In order to meet the challenge of delivering this large flood recovery programme by winter 2014, and because the projects are repairing or replacing existing structures, the Environment Agency had adopted a more streamlined procurement process than would currently be the norm, but at the same time ensuring we maintain a keen focus on demonstrably driving efficiency in its delivery. A critical factor in its success is to ensure this flood recovery programme is managed separately from the existing FRCM programme. All stakeholders have to acknowledge the need to be flexible, pragmatic and understand the urgency to get these works completed. The first step has been to identify suitable packages from the national flood recovery programme. Packaging is seen as the best way of delivering the flood recovery work due to the potential benefits that could be derived through driving economies of scale and it also provides us with the opportunity to optimise the programme in a much more efficient way. The projects within the programme have been divided in to 11 Regional and one National package largely on a geographical basis.

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We will also retain flexibility in our arrangements to deliver other projects with the programme that are currently the responsibility of other contracting entities to deliver e.g. Local Authorities. It is proposed that the majority of the Environment Agency works would be offered to suppliers on our Water and Environment Management (WEM) framework. However, there may be a need to supplement this resource from our local Minor Works Frameworks and our own Operations Delivery teams given the size of this programme and the short timescale for delivery. Local Authorities can use the WEM Frameworks and we have advised them of this. For Wessex the delivery routes are shown below:

Delivery partner Number of projects

Value

Environment Agency WEM 52 £10, 580k

Environment Agency Minor Works Framework 0 0

Environment Agency Operations Delivery 46 £10,710k

Local Authority WEM 0 0

Local Authority other 38 £6,113k

An initial streamlined supplier selection process has been undertaken to demonstrate we are allocating work in a sensible, fair and transparent way. We have preferred suppliers in place. Following the supplier selection process, there will be a two-staged approach to the award of contract to suppliers: Stage 1: Planning Phase that is nearing completion Given the current lack of detail on the projects within the programme a planning contract has been awarded to the preferred supplier for each package under a Professional Services Contract – Option E (cost reimbursable) contract. The supplier will work with local project teams, which will include an EA Project Manager and a cost consultant from our National Cost Management Framework (NCMF). This planning phase will verify the data provided on the projects within the package and will look to provide any further information which would allow a more accurate baseline estimate to be established at certain date to be determined. We will then agree a baseline/target sum for the delivery of the entire programme under the specific packages accepting an appropriate incentivisation mechanism (pain/gain share). This baseline estimate would be formed using WEM rates, any additional rate information from similar EA works and that provided by our cost consultants from the wider industry. Stage 2: Delivery of works On completion of the planning phase and the establishment of an acceptable baseline/target cost the works will be formally let in a controlled and staged way under an ECC, Option C target cost contract. This NEC form of contract will also allow us to fully audit supplier costs, should this be deemed necessary. Throughout this process the Environment Agency, with the support of our cost consultants, will look to maintain control on both the establishment of the baseline/target setting process and the ongoing monitoring of costs to ensure it remains both challenging and realistic. During delivery these rates will continually be under review and regularly benchmarked with the other suppliers carrying out similar works during the delivery of this flood recovery

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programme. The achievement of any efficiency gains will be appropriately evidenced and measured against this initial baseline/target sum.

8. Key delivery risks

This programme of emergency and urgent works includes a broad range of activities in which it has been difficult to screen out all of the key issues prior to inclusion. In addition we are missing important data from key Local Authorities. Responsibility for this is with the area project teams. Some residual risks remain and these will need to be monitored by the Area teams and reported to the National Recovery Team via the fortnightly progress reporting. Key risks and actions to mitigate are identified in the tables below. Table 1 identifies how LPRG Lite has mitigated assurance risks. Table 1

Risk Key mitigation

Incomplete data returns GREEN subject to further info

Data Inconsistencies GREEN subject to further info

Priority score GREEN subject to clarification

Value for Money FSoD rules and responsibility of local teams reporting to National Recovery

Cost / scope increases Agreed budget

Funding Policy Interpretation Defra support through ongoing dialogue

Table 2 identifies actions to mitigate programme delivery risks by Area teams.

Risk RAG Status

Mitigation RAG Status

Delivery of essential repairs by 31 October

AMBER

The funding for the local council asset recovery projects in the national recovery programme extends beyond October, as confirmed on 17 July 2014 by the National Recovery Manager. The councils must confirm why they are not able to complete the work before October, confirm they have risk plans in place and they are committed to completing the work at the earliest opportunity. A number of the projects have now got to the status of emergency works under the Coast Protection Act and we will confirm this with the

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local council e.g. Christchurch groynes, Bournemouth groynes and 3 Poole projects. Most EA led works are planned to be complete by the end of October, which is a challenging and ambitious programme. Contingency plans will be in place to maintain defence levels. Several sites are forecast to be active throughout October so risk of delays due to weather or unforeseen circumstances is high.

Wider and competing pressures on teams delivering this work.

AMBER

60 FTEs are supporting delivery of the recovery Programme.

Health and safety risks associated with having an accelerated programme of works.

AMBER

Increase in active monitoring. Recovery Manager has raised awareness to Area teams. The risk has been highlighted to our Health and Safety lead by the Recovery Manager. Although most of the funding has been agreed, it is a slow process to get new staff into posts, which puts pressure on existing team members.

Ensuring appropriate contingency planning in place so communities are protected going into winter.

GREEN

There are 4 EA led projects due to complete after the 31 October. At 14 July 2014, contingency arrangements are in place for 3 of these projects. The remaining Project is still being scoped to ensure completion by 31 October 2014 or contingency plans will be put in place.

Additional risk RED Unrealistic deadlines/requests for information is putting pressure on staff who are already trying to deliver an ambitious programme by 31 October 2014. To mitigate this, more warning is required of Ministerial Briefing dates in advance. The timescales for responses also need to be proportionate for the amount of work to be delivered at an Area level.

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9. Recommendation

LPRG ‘Lite’ recommends approval of the Recovery Programme for Wessex as set out in this document and evidenced in Appendix A and B in the sum of £19,889k capital and £7,514k revenue. FSoD is required for £27,403k. The recommendations for recovery works for Wessex include activities that, in isolation, may not be considered urgent, but are necessary in order to confirm that damage repair is needed.

Appendix A –urgent and emergency recovery repairs

Urgent and Emergency repairs_Master3.09.xlsx

Appendix B – other priority recovery repairs

Priority repairs_Master3.09.xlsx

Appendix C – Exception Report http://ams.ea.gov/ams_root/2009/501_550/510_09_SD18.doc