Agenda item

            (Mrs. J. Minne, Head of Human Resources attended in connection with this item.)

            The Committee considered the undernoted report:

“Relevant Background Information

      One of the key projects highlighted in the Council’s Investment Programme is a proposal to invest £20M to extend Belfast Waterfront Hall (WFH) to provide dedicated conference and exhibition facilities which will help strengthen Belfast’s offer to the market.

      At its meeting on 6 February 2012, the Development Committee considered the various options for the extension, as set out in the Economic Appraisal commissioned by the Committee in 2011. The Committee agreed that the option of a two storey extension of the WFH over the service yard to the rear of the venue represented the most suitable model for the Council to endorse. The Strategic Policy and Resources Committee considered the funding and human resource elements of the project at its meeting on 18th May 2012 and was advised that the Economic Appraisal prepared for the ERDT funding bid indicated that the most cost effective operating model for this new facility was for the Council to enter into a management contract with an external, established conference operator, rather than for the Council to run the new facility itself.

      It was agreed that in order to satisfy its Best Value legal obligations and potential funders for the project, the Council will have to demonstrate that both operating models have been fully examined and a clear business justification set out for any decision taken by the Council in relation to the running of the facility.

      Consequently, it was agreed by the Strategic Policy and Resources Committee that officers should examine the potential human resources, legal and financial implications of both operating models.

Key Issues

1.0    Human Resources & Legal

      There are a number of HR and legal issues to be managed regardless of which operating model is adopted.

      Should the Council adopt the operating model of a management contract with an external provider the HR and legal issues would mainly relate to the transfer of BCC staff to the new facility.

      For those staff who are identified as part of an organised grouping which carries out activities principally in connection with the operation of the WFH, it is anticipated that the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) and the Service Provision Change (Protection of Employment) Regulations (NI) 2006 will apply. That is, affected staff will be transferred to the employment of the chosen external operator of the facility on the basis of their existing terms and conditions of employment.

      Many of the potentially affected staff however, are employed to work at both the Waterfront Hall and the Ulster Hall. Consequently, a robust, fair and transparent mechanism for accurately determining the distribution of workers and organised groupings of staff will have to be developed, (i.e. to establish which staff would be covered by the relevant legislation and therefore transfer to the new facility).

      Further, the Council will have to effectively manage those staff who would not automatically transfer.

      Should the Council retain and operate the new WFH Exhibition and Conference Facilities in-house the main issues relates to the fact that current staffing structures and working practices and conditions of employment at the WFH are not sufficiently aligned with the commercial requirements of the WFH operation.

      Staffing structures; working practices; job descriptions; and conditions of employment for affected staff would therefore need to be reviewed.

      There may be potential redundancy implications with each model but this will not be clear until the operating model/structure of the new WFH conference facility is known.  Any potential redundancy would be managed in accordance with the Council Redundancy processes (this includes the facility for voluntary redundancy payments and the obligation to seek suitable alternative employment for redundant staff).

      The implementation of either operating model will require full and meaningful consultation and negotiation with the TUs and affected staff.  Initial discussions between management and the TUs have taken place but detailed consultation with the TUs will be undertaken once further market testing work has been done and the Council has a clear view of its future operating model at the WFH.

2.0    Financial

      The Economic Appraisal which has been submitted to NITB in support of the application for funding indicates that the most cost effective operating model for the new facility is for the Council to enter into a contract with an established conference centre operator.

      This is based on a number of assumptions including likely staffing structures and associated labour costs. These costs are indicative at this point and based upon the staffing structures of similar facilities elsewhere.

      It will only be possible to make a true cost comparison of the two operating models when potential operators have been identified and potential contractual arrangements have been considered. Only at that point can a fully informed analysis be undertaken to ensure the Council is in a position to select the most cost effective option. It is important that as a matter of urgency the Council now begins to identify potential operators to allow Council officers to fully analyse the two operating options, establish the extent of the staffing issues set out above, the costs associated with these options and thus make a clear recommendation to Council on how to proceed.

      In the interim period the Council will also undertake a robust assessment of the cost assumptions of the internal operating model taking into account the work undertaken in relation to human resource and legal issues.

Other Issues

      The delivery of this project is dependent upon the Council successfully securing and drawing down ERDF grant of circa £10.5m and a further £2m from NITB’s Tourism Development Scheme. In order to achieve this, all construction contracts must be entered into by 31st December 2013 and all construction work and payments must be complete by 30 June 2015. These timescales for delivery are extremely challenging.

      Final approval for the funding is not expected until December 2012 however to meet the June 2015 deadline it is important that the Council begins the process of procuring the construction of the building as soon as possible. Officers therefore require approval to proceed ‘at risk’ to Design Stage D in accordance with the RIBA design process so that an application for full planning permission can be made.

Resource Implications

      The cost of proceeding to RIBA Stage D is estimated to be £600k. It is anticipated that should the funding application be successful this will be subject to a grant of £360k.

Equality Implications

      None

Recommendations

      It is recommended that Members note the content of the report. In order to allow a true cost comparison to be made between different operating models, the council approve market testing of the conference facility to potential operators.  During the time that this market testing is taking place, Members will explore operating models at other conference centres in the UK and Ireland and a final decision will be taken when full information on cost and the different operating models is considered.

      It is further recommended that in order to meet the tight timescales for delivery of the project permission is given to proceed to Design Stage D.”

            The Committee adopted the recommendations.