Purpose

This report seeks approval to enter into a Deed of Variation with Higgins Partnerships 1961 plc for Phase 1 of the West Kentish Town Estate regeneration programme.  The proposed modification of the Phase 1 Main Works Contract with Higgins Partnerships 1961 plc, will increase the contract sum from £26,176,305.72 to £26,599,054.47 and incorporate a Guaranteed Maximum Inflation Adjustment (GMIA) of £2,058,000, equating to a total cost to the council of up to £28,657,054.47.

The original construction contract for Phase 1 of the West Kentish Town Estate Regeneration Programme was awarded to Higgins Partnerships 1961 PLC for the sum of £26,176,305.72 under Decision Ref. 53-26-IPO, approved by the Executive Director Investment, Place and Opportunity, following consultation with the Interim Executive Director Corporate Services, the Cabinet Member for New Homes and Community Investment, the Cabinet Member for Finance and Cost of Living, the Interim Borough Section 151 Officer and the Borough Solicitor, (these amended to reflect updated job titles and responsibilities) on 27 February 2026 following a competitive procurement undertaken under the Competitive Flexible Procedure under the Procurement Act 2023.

Since contract award, the construction market has experienced significant inflationary pressures and cost volatility. In response, the Council requested a revised fixed-price proposal from Higgins Partnerships 1961 plc and evaluated alternative commercial approaches. Following detailed review, officers concluded that adoption of a fluctuation mechanism represents better value for money than acceptance of a revised fixed-price offer, as it avoids the inclusion of significant contractor risk allowances and compensates only for evidenced cost movements through recognised industry indices.

Approval of the proposed variation will enable progression towards commencement on site, maintain programme certainty and support continued delivery of Phase 1 of the West Kentish Town Estate regeneration programme.

Decision

THAT, following consultation with the Executive Director Corporate Services, the Cabinet Member for New Homes and Community Investment, the Cabinet Member for Finance and Cost of Living, the Borough Section 151 Officer and the Borough Solicitor:

(i) The Deed of Variation to the existing construction contract with Higgins Partnerships 1961 plc for Phase 1 of the West Kentish Town Estate Regeneration Programme, as set out in Sections 2 and 3 of this report, be approved;

(ii) The increase in contract sum from £26,176,305.72 to £26,599,054.47 and incorporating a Guaranteed Maximum Inflation Adjustment (GMIA) of £2,058,000, increasing the total contract value up to a guaranteed maximum price of £28,657,054.47 (excluding VAT), be approved; and

(iii) The execution of all associated legal documentation necessary to implement the variation be authorised.