NEWCASTLE-UNDER-LYME BOROUGH COUNCIL

EXECUTIVE MANAGEMENT TEAM’S

REPORT TO CABINET

15 January 2020

Report Title:	KIDSGROVE SPORTS CENTRE UPDATE

Submitted by:	Chief Executive – Martin Hamilton

Portfolios:	Corporate and Service Improvement, People and Partnerships

Ward(s) affected:	Kidsgrove & Ravenscliffe

Purpose of the Report To update Members on progress regarding the re-opening of Kidsgrove Sports Centre.
Recommendation Cabinet are asked to consider the financial, legal and risk implications of the options presented in the report and to: 1. Reaffirm the Council’s commitment to sports & swimming provision in Kidsgrove. 2. Agree to re-opening the sports centre as the vehicle for delivery of this commitment. 3. Agree to note the progress made by the Kidsgrove Community Interest Group in the development of the design and business model and note new Board membership. 4. Agree the procurement of Willmott Dixon through the SCAPE national construction framework to establish a ‘build out cost’, with associated programme of work. 5. Delegate authority be given to the Portfolio Holder for Corporate and Service Improvement, People and Partnerships, along with the Executive Director Commercial Investment and Economic Development to progress the next stages of the scheme in consultation with the Kidsgrove Sports Centre Steering Group. Further Cabinet reports will be presented upon completion of the detailed business case review in Spring 2020. 6. Convene an all-party Cabinet panel at the appropriate time to consider the revised cost estimates and business plan with a view to Cabinet making a recommendation to Council on reopening the existing Kidsgrove Sport Centre.
Reasons Reopening the swimming pool in the existing sport centre represents the quickest and lowest cost option for re-providing sports and swimming provision in Kidsgrove. Nonetheless, the costs of reopening the centre will be higher than was anticipated in the original agreement to transfer the sports centre to the CIO in November 2018. In addition, there is now greater clarity on the likely level of ongoing subsidy. There is therefore a need to reconfirm the affordability of the project and evaluate whether it still offers value for money before completing the transfer from the County Council and entering into a formal funding commitment with the CIO for the delivery of sports provision in Kidsgrove.

1	Background
In November 2018 Cabinet agreed in principle to accept the transfer of Kidsgrove Sports Centre from the County Council together with a sum of £362,990 in respect of demolition costs and to undertake a “back to back” transfer of the Sports Centre and associated ongoing risks to the Kidsgrove Sports Centre Community Group (CIO) on like terms. Cabinet further resolved that a meeting be arranged between the Borough Council, the CIO and officers of the County Council to move the transfer forward and put in place plans for the refurbishment of the facility at the earliest opportunity. Authority was delegated to the Leader of the Council, in consultation with the Council’s Executive Management Team, to take such decisions as were necessary to progress this matter. 1.2 Regular meetings have taken place between Council officers and the CIO since cabinet’s last update, which have resulted in a joint decision to undertake a full business case assessment of the re-opening plans including the total refurbishment costs of the building in a single phase and the anticipated income and expenditure for the full operation of the Centre. 1.3 As previously reported and agreed there is a need to reconfirm the affordability of the project and evaluate whether it still offers value for money before completing the transfer from the County Council and entering into a formal funding commitment with the CIO. 1.4 This report provides an update on work undertaken to date and decisions required at this stage to move the project forward.
2	CIO Update
2.1 The board of trustees has continued to expand to include two new resources who have substantial knowledge of planning, setting up and successfully operating single site and larger scale leisure trusts. Additionally, a CIMA approved management accountant, who comes with substantial expertise in this area of operation, has been recruited to the effort. 2.2 A revised prudent financial model has been compiled using expert knowledge from industry, alongside actual data and calculations from other single site trust operators, which has been shared with the Council and is currently being reviewed. 2.3 This new model now includes swimming provision, as well as revenue from soft play / use of additional community space. This model has been devised based on the most recent facility plan, which has removed the small swimming pool from the centre and a new larger changing facility being designed into the scheme. 2.4 Life cycle costs have continued to be assessed and assumptions based upon industry standards have suggested that setting aside circa £8k per year for 25 years would be realistic for the capital cost of items that may need replacing before the building reaches the end of its life. 2.5 The sporting bodies that the CIO are talking to remain very interested in this project, however are unwilling to finalise any offering until the main funding from the Council is secured to enable the delivery of this project. The positive of this however is that any such grant assistance will actually only seek to reduce the overall cost further, meaning that any calculations of costings are the worst case scenario.
3	Council Procurement of a Contractor
3.1 In order to secure a market tested contractor price for the works required and to maintain the agreed programme of a opening of the Centre in Spring 2021, the Council have secured the services of Willmott Dixon, a national construction contractor with suitable and extensive experience in Leisure Centre projects across the Country, through the national construction procurement framework SCAPE. 3.2 The SCAPE framework is an OJEU compliant procurement route which allows access to various contractors through its various frameworks depending on size, scale, location and type of construction works. Willmott Dixon are on the National Construction Framework for projects above £2m in value. 3.3 Through the SCAPE route Willmott Dixon will make commitments to involve local contractors and businesses in the construction of the new facility, maximise local spend through localised procurement and employment opportunities, make a commitment to generate and support local apprentices and have signed upto the fair life wage and fair payments (payment of sub-contractors within 30 days) agreements. These commitments reflect the aspirations of both the CIO and the Council for the delivery of the Centre. 3.4 At Kidsgrove Leisure Centre Cabinet Panel on Monday 13th January 2020 the CIO and the Council agreed that the procurement of Willmott Dixon through the SCAPE framework was a sensible and expedient route to securing a contractor price with a view to awarding a construction contract to secure the anticipated opening timescales.
4	Next Steps
4.1 It was agreed that a Steering Group meeting would be convened to agree scope of works to be priced, the specification required for the various elements and the local contractors that the CIO would like to be considered in the construction works. 4.2 Upon receipt of the outputs of the Steering Group meeting the details of the design, specification will be passed to Willmott Dixon who will provide a target cost build cost estimate, free of charge, which can then be used for business case assessments prior to any formal Council agreement to agree to fund the refurbishment costs.
5	Equality Impact Assessment
5.1 It is not anticipated that there will be any negative equality impacts on the wider community as a consequence of the proposed works and the design of the Centre will be fully accessible to all users and will be DDA compliant.
6	Financial and Resource Implications
6.1 Upon completion of the construction cost calculations a full business case review, along with anticipated operating costs / income will be undertaken by the Council with a view to assessing the viability of the scheme going forward prior to any formal agreement to proceed with the scheme.
7	Major Risks
7.1 In the absence of making a decision to develop the leisure offer In Kidsgrove there is a clear reputational risk to the Council in terms of providing no leisure provision or a poor quality provision.
8	Sustainability and Climate Change Implications
8.1 None.
9	Key Decision Information
9.1 N/A
10	Earlier Cabinet/Committee Resolutions
10.1 Cabinet November 2018 10.2 Cabinet October 2019
11	List of Appendices
11.1 None
12	Background Papers
12.1 None