Agenda item

(Cabinet Member with Special Responsibility Councillor Clifford)

Report of Chief Officer (Health & Housing)  -  Report to follow

(Cabinet Member with Special Responsibility Councillor Clifford)

Cabinet received a report from the Chief Officer (Health & Housing) which sought Cabinet’s support for the redevelopment of Salt Ayre Sports Centre (SASC) in partnership with a development partner and inclusion in the budget proposals.

The options, options analysis, including risk assessment and officer preferred option, were set out in the report as follows:

Option 1 - Do not appoint a development partner but continue to invest in line with current budgets with replacement and repair as necessary but with no major improvements.

This would be continuing as we are now, replacing and repairing where necessary to maintain minimum health and safety legislative requirements and to provide the facilities to a level to meet the minimum customer expectation.  However, just to maintain current health and safety standards is likely to require additional expenditure in the region of £400K which has been identified as necessary in a recently updated building condition survey.  It should be noted that no provision for this cost has been included in the table under section 3.3 of the report as investment needs for the project will be different to that of continuing with the current operation.

Only investing in essential planned capital improvements or repairs as opposed to any wider refurbishment would lead to a general decline in the quality of the facilities on offer and it is likely that gym memberships will decline further over the next few years and there would be a continued reduction in sports hall occupancy and sauna use.   To compete with other providers in the district, the City Council need to be able to offer high quality, “private sector feel” facilities.  There would be a further knock on detrimental effect on performance in remaining areas such as the swimming pool and café.

This option would require increased subsidy over the next few years and there will become a point where a decision about whether to continue to keep SASC open will need to be made.  In terms of the revised budget position, the estimated cost of operating Salt Ayre in 2015/16 is £1.625M (£938K excluding notional capital charges).  This assumes customer numbers remain static, therefore any drop in numbers would increase this cost further.

Option 2 –  Appoint Alliance Leisure as the development partner and confirm Cabinet’s commitment to including the necessary funding to deliver the project in its draft budget proposals for 2016/17 and beyond.

The appointment of Alliance Leisure as the Council’s development partner to deliver the planned improvements is supported by a robust business case which shows a reduction in subsidy whilst greatly improving the sport, leisure and visitor attraction offer. The financial appraisal has been extremely thorough and officers have scrutinised Alliance Leisure‘s finance projections and undertaken our own financial projections. 

Although projects as significant as this cannot be risk free, officers have been conservative in projecting costs and income so as to minimise the risk to the Council.  Officers have visited several councils and trusts where similar developments have taken place and made extensive enquiries about the robustness of income targets and costs. Alliance Leisure have an excellent track record of working with clients, project managing capital works, delivering high specification facilities and keeping within budget and delivering on time.

Option 2 is the officer preferred option.  Subject to Budget Council approving the financial proposals, the appointment of a development partner, and delivery of the improvements will give the Council the opportunity to significantly reduce operating costs.  In addition, it will provide a Building Asset Management Plan for the future and generate considerably more use of the facility thus increasing people’s participation in leading healthy lifestyles. Improving the offer will further enhance the district as a place to live and visit whist remaining entirely well placed to deliver on our health and wellbeing objectives particularly still providing for our more vulnerable citizens. The Council will retain responsibility for programming of the facilities and setting the associated pricing policy. The existing ‘Go Card’ scheme offering reduced rates to local residents in receipt of various benefits will continue.

Councillor Blamire proposed, seconded by Councillor Smith:-

“That the recommendations, as set out in the report, be approved.”

Councillors then voted:-

Resolved:

(7 Members (Councillors Blamire, Bryning, Hanson, Leytham, Newman-Thompson, Pattison & Smith) voted in favour.  Councillor Clifford, having disclosed that Section 106 of the Local Government Finance Act 1992 applied to him, did not vote.)

That Cabinet supports the redevelopment of Salt Ayre with the development partner Alliance Leisure Services Limited, and includes it in its budget proposals for referral onto Budget Council.

(1)          That, subject to approval being granted at Budget Council, it be noted that officers will use existing delegated authority to award the contract to Alliance Leisure Services Limited and implement the development plan accordingly.  In addition, any subsequent contractual decisions, not covered by delegated authority, will be brought back to Cabinet for approval.

(2)          That it be noted that progress on the development be covered through normal quarterly performance and financial monitoring arrangements and regular updates will be provided to the Cabinet Portfolio holder.

Officers responsible for effecting the decision:

Chief Officer (Health & Housing)

Chief Officer (Resources)

Reasons for making the decision:

The decision supports the Council’s ensuring Council ethos, particularly relating to municipal entrepreneurialism and is consistent with the health and wellbeing corporate plan priority.There is a clear requirement to address the medium and long term future of Salt Ayre Sports Centre.  The financial return to the Council that this project provides at a time when identifying savings and protecting services is of paramount importance would seem a prudent and sensible way forward. Alliance Leisure submitted the most economically advantageous tender. Taking this route does not preclude any future option of considering transferring to a Not for Profit Distributing Organisation (NPDO) or Trust.