Ardrossan Campus
North Ayrshire Council · 25 June 2025
Back to North Ayrshire Council — 25 June 2025 and its agenda
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NORTH AYRSHIRE COUNCIL 25 June 2025 Council Title: Ardrossan Campus Purpose: To provide Council with an update on progress with the delivery of the Ardrossan Campus project, the overall transformational regeneration outcomes which will be delivered, the current financial position, and to set out the additional funding that is required as a result of market conditions in the construction industry to enable the delivery of the project in accordance with current programme timelines. Recommendation: It is recommended that Council notes the current project status, the overall transformational regeneration outcomes which will be delivered, the current financial position, and approves additional funding now required to enable the delivery of the project in accordance with current programme timelines. 1. Executive Summary 1.1 The Ardrossan Campus project is a key component of the wider Ardrossan Coastal Quarter regeneration programme and will deliver an educational and community campus comprising: • 1200 pupil secondary school (including 18 place Astra Base). • 220 pupil primary school • 34 pupil early years provision • a public library • a public swimming pool • community access to other sporting facilities outwith school hours • Health and Social Care Partnership (HSCP) office accommodation • a Campus Police Officer base 1.2 The vision for the wider site also includes the provision of new housing and commercial uses, providing ambitious transformational regeneration of a vacant and derelict site on land within one of North Ayrshire’s most deprived communities. The project also supports the ambitions of the Local Development Plan. 1.3 The project has been progressed in partnership with the Scottish Futures Trust and forms part of the Scottish Government’s Learning Estate Investment Programme (LEIP). This programme provides a significant proportion of funding towards the cost of the
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Campus and is predicated on alignment with the national School Estate Strategy and delivery of specific outcomes. 1.4 The Campus project follows preparatory investment in the site, including the replacement of an ageing revetment (sea-defence wall), land remediation works, creation of site access and road infrastructure, utilities connections and construction of an extension to the coastal path. These works are almost complete, and subject to anticipated confirmation from the Scottish Environment Protection Agency (SEPA ) and the Council’s Environmental Health team, the site will be available for the Campus project construction to commence in July. 1.5 The design development phase of the Campus project has been undertaken in parallel with the remediation and enabling works and has recently been subject to a market testing process to provide a final cost proposal. This period has seen extra-ordinary volatility in the construction sector. Analysis of the market tested tender package returns for the campus, following application of identified efficiencies and agreed value engineering proposals, have identified a significant shortfall between the current budget allocation of £86.8 million and the amount identified to deliver the project at £114.6 million. 1.6 The project team has undertaken a thorough review of the project costs against all budget lines to remove any duplication and identify areas of efficiencies and savings. This has resulted in a reduction of £4 million from the original stage 4 submission. To further narrow this gap and minimise the amount of additional funding that is required, a further £4.3 million of value engineering has also been agreed by the Programme Board. These savings were selected to minimise the impact on teaching, learning and the community spaces and the project outcomes which are an integral part of the SFT funding offer, whilst recognising the imperative to deliver both value for money (VfM) and affordability. 1.7 An approach was also made to Scottish Futures Trust (SFT) for additional funding to support the abnormal elements of the project. It was agreed at their board meeting on 17 June that an additional £4m would be allocated to assist with the specific challenges being encountered with the Ardrossan Campus project. 1.8 The existing Ardrossan Academy is rated condition D (poor) and is considered beyond its useful economic lifespan. Whilst necessary repairs continue to be undertaken, the existing school’s condition highlights the urgent need for investment. 1.9 The current construction programme, subject to approval of additional funding as requested in this report, is for the new Campus to be handed-over and operational in October 2027. 2. Background 2.1 The Ardrossan Campus project is a key component of the wider Ardrossan Coastal Quarter regeneration programme and will deliver an educational and community campus comprising: • 1200 pupil secondary school (including 18 place Astra Base). • 220 pupil primary school • 34 pupil early years provision • A public library
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• A public swimming pool • Community access to other sporting facilities outwith school hours. • Health and Social Care Partnership (HSCP) office accommodation • Campus Police Officer base 2.2 The vision for the wider site also includes the provision of new housing and commercial uses, providing transformational regeneration of a vacant and derelict land site within one of North Ayrshire’s most deprived communities. 2.3 The Local Development Plan has allocated the Ardrossan Coastal Quarter area as part of Strategic Policy 3: Strategic Development Areas. Along with the residential/ mixed use site, the policy proposes a new Maritime hub and commercial centre. The transformational regeneration of the area supports development that: • addresses socio-economic needs of local communities in capturing new, inclusive economic activity that extends economic resilience across the community. • delivers community priorities identified through the Three Towns Charrette. • includes commercial, leisure and employment uses. • provides active travel routes into and throughout the site 2.4 The Campus project follows preparatory investment in the regeneration of the site, including the replacement of an ageing revetment (sea-defence wall), remediation works, creation of site access and road infrastructure, utilities connections and construction of an extension to the coastal path. These works are nearing completion and, subject to anticipated confirmation from the Scottish Environment Protection Agency (SEPA ) and the Council’s Environmental Health team, the site will be available for the Campus construction project to commence in July. 2.5 The existing Ardrossan Academy is rated condition D (poor) and is considered beyond its useful economic lifespan. Whilst necessary repairs continue to be undertaken, maintaining the facility’s statutory compliance and suitability as an environment for teaching and learning presents an on-going challenge and revenue budget burden, thereby highlighting the urgent need for investment . 2.6 The existing Ardrossan Academy condition and the transformational benefits that will be delivered through incorporation of a new Campus into the wider Coastal Quarter Programme have been recognised by the Scottish Futures Trust (SFT) and the Council have successfully bid for inclusion in the Scottish Government’s Learning Estate Investment Programme (LEIP). 2.7 The LEIP programme provides a significant proportion of funding towards the Campus and is predicated on alignment with the national School Estate strategy and delivery of specific outcomes. The high-level LEIP programme requirements include: • in-use energy figures of between 67-83KWh/m²/annum • maintenance of the facilities in condition A/B for 25 years following handover • delivery of 1GB connectivity to teaching and learning spaces • delivery of stated employment targets In addition, there are also project specific objectives, which align with the Council Plan and include: wellbeing, resilient growth, community wealth building and lifelong learning.
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2.8 SFT have been closely involved in the project and supportive throughout, including representation on and regular attendance at the officer Ardrossan Programme Board which co-ordinates and provides governance to the various elements of the Coastal Quarter programme. An approach was also made to Scottish Futures Trust (SFT) for additional funding to support the abnormal elements of the project. It was agreed at their board meeting on 17 June that an additional £4m would be allocated to assist with the specific challenges being encountered with the Ardrossan Campus project. A pre-construction workshop with SFT and Scottish Government is also scheduled for 2nd July to allow the project team to demonstrate to Scottish Government and SFT representatives how the project aligns with the LEIP programme objectives, prior to awarding the construction contract. 2.9 The Council procured a team of external designers and advisors with the requisite expertise and experience to undertake a project of this scale and complexity. The procurement scoring process of these parties included a substantial focus on quality to ensure the team had the correct capability and capacity to undertake the work. The design team have worked closely with the Council to develop the project scope, outline proposals and detailed designs, including providing cost advice throughout. The design development phase has also included significant stakeholder engagement with relevant Council services, building users, external agencies (KA Leisure, SEPA, Care Inspectorate, SFT, etc), and community groups, to ensure the proposals meet the needs of the Council and the wider community that will benefit from the development. 2.10 The Council also procured a construction contractor, Morgan Sindall, through an extensive procurement exercise, also with a focus on quality and to ensure that the Council’s ambitions could be delivered successfully. This procurement exercise was a two-stage process whereby the main-contractor is appointed on the basis of their construction prelims, overhead and profit on-costs. The remainder of the supply chain subsequently tenders for relevant work-packages on an “open-book” basis. One of the components of the two-stage procurement process chosen for the project is that the contractor becomes involved in the design development and is able to give advice on issues such as buildability and costs at an earlier stage of the project than a traditional one-stage tender process whereby no contractor input received until the point of tender-return. 2.11 Cost review exercises have been undertaken by Atkins Realis (Quantity Surveyors) on behalf of the Council throughout each design stage of the project. The figures which have informed the development of the cost plans have been based on current market intelligence from a range of recent school campus tender returns of similar complexity and scale, including other LEIP funded projects, to inform the expected tender return rates. 2.12 Cost pressures have been noted throughout the project; however, the project team have taken corrective action at each stage to reduce the anticipated costs and to address potential budget shortfalls and have liaised with the Council’s Finance Team throughout. In March 2024, a divergence in the cost plans of the cost consultants and the contractor was identified. An independent assessment of Atkins Realis and Morgan Sindall’s cost plans was undertaken by a third party cost advisor, Currie and Brown, on behalf of the Council to better understand the differences between the two parties. This assessment highlighted the main area of difference was in the assessment of the Mechanical and Electrical work package. As this work-package
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forms a substantial portion of the overall contract value, options to address this potential issue were investigated. 2.13 As a result, it was agreed that, in view of the cost forecast and the fact that the project could still deliver on the LEIP in-use energy requirements and the project’s low-carbon sustainability ambitions, the project team should remove the requirement to deliver the Passivhaus Classic standard from the Campus specification and to investigate further options for value engineering to reduce the overall cost of the project. 2.14 At that stage Morgan Sindall advised they believed that the majority of the delta could be addressed by taking this approach. Advice was also sought from other Local Authorities experiencing cost challenges in their projects; this confirmed the move away from the formal Passivhaus standard is a mitigation that has been applied elsewhere. 2.15 Due to the significant change in scope of the project, a new procurement exercise was undertaken, in order to comply with procurement legislation. The design of the project was awarded through the SCAPE framework to Morgan Sindall in August 2024. This approach was selected to maintain design continuity and reduce any further delays on the delivery of the project, in recognition of the condition status of the current Ardrossan Academy learning environment. 2.16 Prior to the market testing process commencing in November 2024, a further cost review exercise was undertaken by Atkins Realis in collaboration with Morgan Sindall. The Atkins Realis cost plan at £80.1 million was once again based upon recently tendered rates on a number of similarly sized and scoped projects. The Morgan Sindall cost plan was £84.2 million. 2.17 In recognition of the intelligence received and the extremely volatile construction cost landscape, the Council approved an initial capital flexibility provision of £15million in the Council budget set on 26 February 2025. This was agreed to help address anticipated financial pressures across a number of projects in the capital programme. 2.18 The market testing process undertaken by Morgan Sindall and completed in April 2025 on this project has identified a further significant gap between the cost plans prepared prior to market testing and the actual returns. 2.19 Analysis of the reasons for the increase in costs has been undertaken, including input from the external cost advisors, the contractor and SFT. Prevailing conditions in the construction industry at present are impacting the costs of all capital projects, including the Campus: • Construction inflation o The Campus project requires to follow the remediation and enabling works contracts, which are nearing completion. The programme for these works has been extended, principally as a result of construction market appetite and capacity to undertake the works. Overall construction inflation, as measured by the Building Cost Information Service (BCIS), has increased markedly in the period. The two main indices which reflect construction inflation, Tender Price (TPI) and Outturn Price (OPI), have risen by 26% and 37% respectively.
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• Material availability o Recent changes and uncertainty in relation to tariffs introduced in 2025 have significant implications for international trade and supply chains. Delays and uncertainties in shipping affects the timely delivery of materials, leading to increased project costs. o Other areas of pressure specific to the construction industry, include a 10% rise in specific product markets, for example insulation costs and anomalies in timber and ironmongery. There are also early indications of price strain in the steel industry. • Labour and Skills Shortages o Labour shortages have been a persistent issue over the past few years, exacerbated by more recent immigration requirements. o This issue is recognised in the Scottish Construction Accord Transformation action plan which highlights the need to increase the capacity, capability, and diversity of the workforce with a focus on future skills. • Regional Supply Chain Pressures o The abundance of other large-scale construction work in the Central Belt (HMP Glasgow, Monklands Hospital, Glasgow University, SFRS, and other LEIP projects) is significantly affecting competitive pricing for projects outside of Glasgow and Edinburgh. The high demand for labour and staff resources in the Central Belt has created a shortage of available personnel for the project in Ardrossan. This shortage is particularly acute among key specialist subcontractors in cladding and mechanical and electrical services. o There has been a requirement to incentivise labour to travel to Ardrossan due to the abundance of projects in the Central Belt. The value of this labour incentive has been reported by the supply chain as up to 7.5% on labour costs alone which equates to over £4 million across several key work packages. • Design Development o To ensure warranty / guarantee on the longevity of the components, linked to the LEIP funding requirements in relation to sustained building condition, the specification of some components has been enhanced to reflect the exposed, marine conditions of the site. o Marginal additional building area (61m²) arising from the final co- ordination of services, including increases to risers and changes to voids within the secondary wing. (Area increases have been mitigated through value engineering). o Additional items were identified through the supply chain engagement in increased sheet piling to the basement excavations, the well pointing system, pond undercroft for filtration pipes to ensure no tidal impact of the system and increasing the extent of gas venting. 2.20 Robust scrutiny from officers and governance through the Ardrossan Programme Board, including engagement with key stakeholders, has taken place to address the budgetary challenges on this project. This has included: • a thorough review of the Contractor Tender Packages (CTP) by Atkins Realis to remove any duplications and inconsistencies across each work package. This has resulted in a reduction in the CTP allowance of £4 million from the original stage 4 submission. • additional value engineering options have been accepted by the Programme
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Board up to a value of £4.3 million. • a review of all the project budget lines to identify efficiencies and savings. • a request for additional funding from Scottish Futures Trust to support the ‘abnormal’ abnormals on the project. 2.21 The value engineering options have sought to maintain the integrity of the design and energy efficiency requirements and to maximise the available partnership funding from the Scottish Futures Trust which is released over the 25 years following handover and is dependent on the attainment of the LEIP funding criteria noted above. Any major changes to the scope and specification of the project could affect future revenue funding streams. 2.22 Notwithstanding the agreed value engineering, the proposals will deliver a high- quality teaching, learning and community environment which will fully meet the Scottish Futures Trust LEIP funding requirements including the in-use energy targets. 2.23 The review process described above has resulted in a projected final cost for the Ardrossan Campus of £114.6 million which is currently anticipated at £27.8 million above the current budget allocation. 2.24 As is prudent at a major gateway review stage of all large capital investment projects, in view of the budget impacts, the following wider options available have been considered: • re-tender the project in its current form • revise the project scope and re-tender o Omit key elements to reduce costs o Refurbish / partial new-build existing building A high-level appraisal of these options highlights the following key issues: • programme delays will result in further inflationary pressures, which would offset (in-part or in-full) any potential savings • market conditions are unlikely to ease in the short to medium term • SFT funding has been secured based on the current transformational vision for the learning environment and the wider site • existing facilities are already in poor condition and subject to further deterioration as the programme extends. • no other suitable sites were identified to deliver the project scope • preparatory investment has been made in the remediation / enabling works • disruption to teaching and learning should be mitigated to the maximum extent possible. 2.25 The key current risks which could arise through the construction phase of the project and associated mitigations are noted, for which a project contingency fund has been included within the latest cost estimates to help address the risks: Risks Mitigations Systemic Construction impacts on project delivery e.g. conflicts, tariffs that could impact on the supply chain required for delivery, etc. Legal processes have been used in the development of the contracts to minimise risk. Close monitoring of contractor and supply chain to overcome potential risk of human
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resource and material unavailability, supply chain insolvency, etc. Ground conditions relating to the deeper excavation activities required to construct the pool, piling and deep drainage. The works undertaken to date have addressed known issues to an average depth of 3.5m in accordance with industry best practice. The site investigations undertaken to date do not indicate any issues, however, it is prudent to hold a contingency. Regular coordination meetings have been held with enabling works team through the design development stage. Extensive site investigations to identify areas requiring remediation and works undertaken in accordance with agreed strategy. An assessment has been made on the likely worst-case costs that could arise from this eventuality. Obtaining statutory consents in a timeous manner to permit construction to proceed. Meetings held with Building Standards and Planning to understand optimum processes for discharge of conditions. Business continuity decisions should there be a delay to the construction of the new Campus Robust business continuity plan in place and strategy for managing buildings in interim is being implemented. Overall risk profile associated with the NEC4 form of contract. A £5m project contingency allowance has been incorporated into the project budget. This is intended to address any compensation events which arise through the contract. 2.26 In consideration of the significant transformational opportunity of the Coastal Quarter Programme, the options available, the condition of the current Ardrossan Academy, the remaining risks and the financial context, the assessment is that allocating additional funding and proceeding to Financial Close with Morgan Sindall is the recommended course of action. 2.27 If Council approves the additional budget allocation, the Chief Executive will have authority to sign the Financial Close documents, entering the Council into a contract to construct the Campus. Subject to this approval and entering into the contract, construction works will be able to commence in mid-July 2025 with a programmed hand- over and operational date of October 2027. 3. Proposals 3.1 It is proposed that Council notes the current status of the Ardrossan Campus project, in particular the positive outcomes that will be delivered in relation to: • The improved teaching and learning environment for the pupils of Ardrossan Academy and Winton Primary School. • The improved user experience for the patrons of Auchenharvie Swimming Pool and Ardrossan Library. • The improved user experience relating to the Children and Families team currently located at Aitken Place in Ardrossan. • The transformational economic regeneration opportunities arising from the wider Ardrossan Coastal Quarter programme and the alignment with the Council Plan priorities. • The LEIP programme deliverables (in-use energy, building condition, local employment and digital connectivity).
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3.2 It is proposed that Council approves the additional budget provision of £27.8 million which is required for the project. This would require to be funded through, the £4 million additional awarded by SFT a re-direction of £7.8 million from existing capital flexibility and additional borrowing of up to £16 million, at an annual revenue cost of £0.912 million per annum. 4. Implications/Socio-economic Duty Financial 4.1 Additional expenditure budget provision of £27.8 million is required for the project. This would require to be funded through, the £4 million additional awarded by SFT a re- direction of £7.8 million from existing capital flexibility and additional borrowing of up to £16 million, at an annual revenue cost of £0.912 million per annum. This funding will require to be incorporated in the Council’s Medium-Term financial Plan covering the period 2026/27 to 2028/29. It is also recognised that a further review of the Council’s Capital Investment programme will be undertaken covering the period 2026/27 to 2033/34, to ensure the revised programme is prudent, affordable, and sustainable. This review will include a long-term projection of interest rates associated with anticipated borrowing need, as well as assessments of expenditure profiles, capital receipt forecasts, anticipated capital grants and the profiled use of the loans fund reserve to support the programme. Human Resources 4.2 As part of the review of the budget lines across the project – an assessment was undertaken of the resource requirements required to deliver the construction phase of the project. This resulted in a reduction in the Schools for the Future project team with the reduction of one post, facilitated through redeployment within PMI. Legal 4.3 The legal arrangements on the project have been dealt with by Harper Macleod and the contract has been prepared for signing should Council approve additional funding. 4.4 If Council approves the additional budget allocation, the Chief Executive will have authority to sign the Financial Close documents, entering the Council into a contact to construct the Campus. Equality/Socio-economic 4.4 The construction of the new campus, as a key component of the wider transformational regeneration of the Ardrossan Coastal Quarter will have significant direct and wider socio economic benefits. Climate Change and Carbon 4.5 Ardrossan Campus has been designed to be highly energy efficient and to meet the LEIP requirements of between 67-83KWh/m²/annum. The current stage 4 design shows
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a predicted attainment of 71KWh/m²/annum. A sustainability responsibility matrix has been developed and incorporated into the contractual proposals to deliver facilities that will contribute to the Council’s climate change priorities. Key Priorities 4.6 The project supports the following Council priorities: Wellbeing • Developing appropriate skills for the local and regional economy • Using our assets to support wellbeing in local communities • Improving educational attainment and achievement and closing the attainment gap • Developing the young workforce and ensuring positive destinations for school leavers • Providing lifelong learning opportunities for individuals and organisations including digital literacy • Improving outcomes for care-experienced young people including implementation of The Promise • Ensure our places and spaces where we live, work and visit are well maintained and accessible. • Support KA Leisure’s leadership of North Ayrshire’s Health and Wellbeing Alliance • Through the Health and Social Care Partnership Strategic Plan we will protect and provide care and support for those in need. Communities and Local Democracy • Developing partnerships with the third and voluntary sector • Placemaking, including creation of locality action plans. • Accessible public services, both digitally and locally. Climate Change • Embedding our net-zero ambition in all democratic decision-making. • Reducing the carbon footprint of our estate and taking a fabric first and low carbon energy generation approach to homes and buildings • Promoting new woodland creation and protecting our green spaces to provide a natural resource for carbon sequestration. Community Wealth Building 4.7 A suite of community benefits has been developed through the design and construction phases of the project. The commitments from Morgan Sindall which are defined in the SCAPE framework agreement have been incorporated into the contractual requirements for the project. Islands Communities Impact Assessment (ICIA)
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4.8 None United Nations Rights of the Child (UNCRC) 4.9 The development of the Campus fully supports these rights. Consumer Duty 4.10 The project will deliver on these through the Stakeholder Reference Group and Client Planning workstreams. 5. Consultation 5.1 Consultation has been undertaken with Education, Finance and Legal Services. RUSSELL McCUTCHEON Executive Director (Place) For further information please contact Laurence Cree, Head of Service Sustainability, Transport & Corporate Property, on 01294 324514. Background Papers 0