Agenda item

(Cabinet Member with Special Responsibility Councillor Hanson)

Report of Chief Officer (Resources)

(Cabinet Member with Special Responsibility Councillor Hanson)

Cabinet received a report from the Chief Officer (Resources) to update Members on the catering/bar offer at The Storey in context of recent changes and the forthcoming wider review of The Storey’s operation.

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

Various options have been considered relating to the catering/bar operation including putting it out to tender or working in partnership with outside organisations. These have been dismissed at this stage, primarily for operational reasons and due to the need for a wider formal review of The Storey operation before 2017/18.  The timing of the current tenant wishing to leave The Storey has therefore presented the Council with this opportunity to undertake the catering/bar operation itself.

For operational and property management reasons Officers consider bringing in-house the café/bar operation, with the catering of large events being undertaken initially by a preferred shortlist of outside caterers, the better option at this stage.  The former restaurant space would be made available for leasing to a new tenant or for additional room hire.  It is considered that an in-house operation would work much better in terms of room hire that requires catering, and it would allow other efficiency savings to be made with regard to existing facilities support / reception staffing, through more flexible job roles and working arrangements.  It would also allow the Council to take more control of the building and offer more flexibility and choice to room hirers.

From the initial appraisal undertaken so far, bringing the operation in-house is expected to become financially viable after the initial setting up period and would help The Storey to achieve at least a break-even position - that is the budgetary target now adopted for next year and beyond.  As with any such initiative, however, it is not without its risks, but these are thought to be manageable, subject to an effective staffing structure being put in place as set out at Appendix A to the report.

Furthermore independent advice obtained when the Council was in lease negotiations with the current tenant demonstrated that the trading market is weak with potential tenants of commercial catering premises. Those that are out there would require incentives such as rent free periods, a reverse premium from the landlord, limited levels of service charges, with the risk of low rental incomes.

It is considered unlikely that one of the big national chains would be interested in the catering offer and there is always the risk that the Council would not secure a tenant.

Bringing the operation in-house will give the Council increased flexibility with the catering/bar operation and the existing facilities management staff and improved integration within the overall Storey offer. This is expected to become financially viable after the initial setting up period and would therefore assist The Storey to achieve at least a break-even budget position.  This will feed into the wider forthcoming review.

Councillor Hanson proposed, seconded by Councillor Clifford:-

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

Councillors then voted:-

Resolved unanimously:

(1)          That Cabinet endorses the principle of the Council providing the catering/bar offer at The Storey with immediate effect, following vacation by the current tenant.

(2)          That Cabinet receives an update report on the longer term viability of providing the catering/bar operation in-house as part of the wider formal review of The Storey operation prior to 2017/18, with updates being provided through normal quarterly monitoring arrangements in the interim.

Officer responsible for effecting the decision:

Chief Officer (Resources)

Reasons for making the decision:

The surrender of the lease by the current tenant enables the Council to assess how the catering operation is provided and it makes sense to close the restaurant but deliver and manage the bar/café in-house until the outcome of the review is known.  The Storey operation as a whole will need to support Council’s priorities and be sustainable, to fit with the Council’s theme of managing its resources to deliver value for money.