Development issues for HEIs – always prepare
The quality of the university estate continues to improve, as unis throughout the UK continue to invest in built environment, says VWV's Clive Read
Each week, you see examples of public consultations, planning applications, planning permissions and cranes as campuses develop and adapt to the rigours of TEF and REF and the implications they have for the future of education provision and the buildings in which students will learn. This ever-changing environment is placing some new (and not so new) demands on universities as they deal with their estates. Here are some tips from us:
Whilst successive governments have for years espoused the mantra to “simplify and speed up” the planning process, the reality is rather more different at the sharp end when you have to try to get to grips with a new planning regime. Wherever your local authority is in its Local Planning cycle, the key to successful long-term planning, both at Local Plan or your own masterplan level, is engagement. Engagement with the Local Plan means you are far more likely to have a significant say in how your campus might be used and/or developed out in the future and to direct the land use that the university might want. This can be a once-in-a-generation/decade opportunity so don’t lose it.
Going through your own master-planning exercise brings a very useful spotlight on land use and should involve all key stakeholders within the university, so that methods of teaching, engagement with external partners can all be tested and interrogated. It is also a chance for a longer-term relationship with your local planning authority and to get a feel for likely s106 and potential Community Infrastructure Levy (if there’s a commercial use) charges which might be applied in any given circumstance. It is also the chance to get across the message that education continues to change and that local planning authorities need to embrace that. For example, pure education use often goes hand in hand with a more business-oriented use, thereby enabling universities to take advantage of enabling development for the wider benefit of the university and its staff and students.
Public consultation can bring its own challenges where you have a particular scheme in mind. It is good practice, especially as it can give you a chance to address head-on any likely local opposition to your planned development. This can improve your ability to fashion and hone any planning application when you do eventually submit it. External advisers have an important role to play, including on the PR side. We have seen a number of land owners engage PR consultants to very good effect so that the university gets what it wants.
Check What You Own – Can You Implement Your Planning?
This is basic but fundamental and it’s easy to slip up. Check the legal boundaries – do you own absolutely everything? Are you sure? There’s often an element of myth and legend that can be dispelled with a proper check of where your boundaries actually lie. It’s also fundamental when you apply for planning. An application has to be implementable and it’s harder to demonstrate that if you don’t own all the land on which the development is intended to take place!! The other thing to check is that the plan appended as part of your application is exactly at one with your registered legal title. If it isn’t then you’ve got some work to do.
There are some other more practical issues that often need to be addressed which require a good understanding and co-operation between the university, its solicitor and surveyor/planner. The last thing you want is for a scheme design to suddenly impinge on third-party access rights. Typically these can include a service media easement in favour of a utilities company (which can be fearsomely expensive to move, assuming there are lift and shift provisions) or a right of way (whether adopted or not), all of which can add delay and cost into any development project. An early site meeting of your advising team can repay dividends in terms of forward planning and having a strategy to deal with site assembly issues. We have seen instances where the building is within a red line but a canopy overhanging the main entrance fell outside the legal boundary. These issues can usually be fixed but invariably cause delay and cost money.
It is all too easy to think that there won’t be issues once a development has begun and the contractors are working to the design scheme and the building is underway. Sadly the experience of Carillion and the consequential fall-out that is already being felt shows the importance of having well-drawn up contracts and appropriate insurance in place should the worst happen. A good understanding of who is doing what is vital, not only for the preparation of appointments but also where risks are to be placed and, consequently, insured against.
Specialist advisers such as Sentio Insurance Brokers stress that reliance shouldn’t be placed upon the architects or engineers being the only parties to have their own Professional Indemnity Insurance when thinking about construction and development. Many contractors and professionals involved in construction could be responsible for design work undertaken in connection with projects. Some of the work could be designed in-house or they could engage subcontractors to provide those services, or even altering the design once work is underway. Either way because of their involvement, that firm can be held liable for any defects or errors that arise. This is why the managing director of Sentio Insurance Brokers, Richard Waltier, states it is important for contractors to purchase their own professional indemnity insurance and not rely on insurance of others.
If contractors have no in-house design teams should they still purchase professional indemnity insurance? The simple answer is yes! There has been an increase over the last 25 years in the design and build contract. Whilst this is popular with the employer, it has implications for the contractor. The employer usually insists on all parties to the contract having professional indemnity insurance so contractors will be required to purchase the cover even if they have no in-house design teams.
It is not uncommon for professional designers to design something that cannot be built, and contractors may not always achieve what they had originally intended so if it does go wrong all parties can get dragged into a claim. Therefore contractors can experience design liability not only by undertaking in-house design but through a design and build contract, as well as through non-contractual design input.
There can be real issues unravelling where liability might lie and finding out who amongst the professional team has appropriate cover. For example, a contractor wins a tender to build a commercial building and subcontracts the design work to architects and engineers. However, when the foundations are being laid it becomes apparent that the design is incorrect so the foundations are laid incorrectly. The work has to then be re-done which results in increased costs and a delay in the project. Under normal circumstances if the client brings about a claim, the contractor would look to the architects or engineers to provide the indemnity, but what if their insurance had lapsed, or there was an error or the insurance had been purchased incorrectly? Sentio Insurance Brokers have come across such situations where the contractor can then become fully liable as the client will look to them for indemnity.
So is there help at hand and what should a university, as employer, look for? D&C professional indemnity insurance should be purchased for the contractor to respond in these events. If they outsource all the design work to third parties the insurers will charge less as the exposure becomes contingent. The contractor should also ensure that firms they outsource to also carry adequate insurance.
The other consideration is to ensure that contractors purchase adequate contract all risk insurance to cover their contract works, their tools, public and employers liability, and any hired-in plant. It would be important for any contractor to consider their total exposure throughout the length of a contract and adequately protect their assets and works. And universities would also want to see that a contractor carries employers liability cover – a compulsory insurance and therefore a legal requirement even if they are only employing casual labourers.
These are some of the building blocks to consider and address in good time before you embark on a major project. With good practical common sense you can head-off issues before they become problems. Good advisers will point out the issues and give you workable solutions.
To be kept up to date on legal, regulatory and governance issues, please register for VWV’s dedicated HE portal OnStream at www.vwv.co.uk/he-onstream
Clive Read is a real estate Partner at leading education law firm VWV. Clive can be contacted on 0121 227 3710 or at firstname.lastname@example.org.
Our thanks, too, to managing director of Sentio Insurance Brokers, Richard Waltier for his insights. He can be contacted on email@example.com.