Minutes:
(Mr. A. Hassard, Director of Parks and Leisure, attended in connection with this item.)
The Committee considered the undernoted report:
“1.0 Relevant background information
1.1 Under the Investment Programme Implementation Plan, agreed by Strategic Policy and Resources Committee in June 2012, SP&R agreed the urgent need for fundamental change in its leisure services, with a focus on delivering better health outcomes and improved value for money. In January 2013, Committee agreed the indicative phasing of capital transformation:
§ Phase 1: Investment Programme (Windsor/Olympia; Andersonstown; Girdwood)
§ Phase 2: Reform of Local Government (e.g. Avoniel; Castlereagh; Lagmore/Poleglass/Colin)
§ Phase 3: One Public Estate(e.g. Ballysillan; Ozone; Shankill; Loughside; Whiterock).
1.2 At its meeting in June, SP&R set a £105m capital expenditure affordability limit for the Leisure Transformation Programme. The Committee also agreed a capital financing strategy which includes allocating £3.23m of the £6m Belfast Investment Fund annual rates contribution to finance the £38m Olympia and Andersonstown schemes and £2m efficiency savings from the leisure service budgets, deliverable by 1 April 2016.
At August committee, Members agreed the resourcing requirements of the Leisure Transformation Programme, to be funded as non-recurrent costs from reserves and an outline timeframe for decisions.
2. Key issues
2.1 Information gathering
Over recent months, Members and officers have undertaken a number of good practice visits to a range of leisure providers including Greenwich Leisure Limited (charitable social enterprise company); Glasgow Life ( arms length company operated under charitable status); Greenvale Leisure, Magherafelt (private sector management company); and Northern Community Leisure Trust, North Down (leisure trust with private sector partner). Further visits and engagements are planned in order to understand the costs and benefits of the fullest range of business models. This information will be collated for Members’ consideration at Committee in due course.
2.2 Timeline for business model decision
In August, Committee agreed to consider the business case for the business operating model by the end of 2013. This timeframe is determined by a number of key drivers:
· Part of the capital financing strategy is dependent upon £2m efficiency savings from leisure service budgets. In order to ensure that this is in place by 2016, these efficiencies must be derived at the latest in the financial year commencing April 2015 and therefore be included in the estimates planning cycle beginning in September 2014.
· Construction work will start to commence on three Phase 1 projects in 2014. Members have stressed the need for transformed services when the centres becoming operational in mid/late-2015. Human resources planning, including staff learning and development, will require a lead-in period of approximately 12 months.
· Critically, staff and trade unions understand the need for change in the service and have been briefed by the Chief Executive and Director on the emerging transformation programme. In order to give employees stability in a period of upheaval and change, it is most important that a timeline for decisions is set out.
As per the resourcing plan agreed by Committee in August 2013, a number of pieces of work are being prepared to inform the decisions to be taken by Committee. This includes legal assurance on governance, financing models, detailed design work for Phase 1 of the capital programme and scoping work for Phase II.
2.3 Proposed decision schedule
Work is underway to develop business model options, with the proposed intention that this is brought to Committee in December 2013 in order that it can specify a preferred business operating model. The options report will detail the costs, benefits and sustainability in relation to the three delivery models as outlined in the Deloitte report presented to Committee in March 2013, that is:
· Transformed in-house direct service operator
· Non-profit distributing organisation (NPDO)
· Private sector partnership.
In relation to the NPDO model, an analysis of the spectrum of governance and legal frameworks will also be prepared.
Work will also be undertaken with Members to prepare evaluation criteria to appraise the strategic fit of the proposed business models (e.g. health/participation outcomes), as well as a framework to assess deliverability.
In December, it is proposed that Committee will be asked to consider each of the business cases and make an ‘in principle’ decision on the preferred business model. This will grant officers authority to develop a detailed business plan, drawing on expert advice, which will be subject to due diligence testing over the period March-May 2014. Depending upon the Council’s decision, consideration will have to be given to the development of the potential vehicles to further develop the work such as the creation of a shell company established for charitable purposes.
It is proposed that the final decision to ratify the ‘in principle’ decision will be taken by the new Council at its SP&R Committee meeting in June 2014, on the basis of the due diligence reports and satisfactory fulfilment of the Council’s strategic objectives for leisure transformation.
2.4 Trade union engagement
The Chief Executive met with representatives from all of the BCC trade unions in September. This was an open, transparent and two way engagement, in which both parties agreed the importance of sustaining the future of leisure services to deliver improved health outcomes and secure employment.
There was an acceptance that the status quo is unsustainable and significant change is required regardless of the final agreed service delivery model. The TUs asked therefore that consideration be given by management to a voluntary redundancy exercise to mitigate the potential for compulsory redundancies and/or a supernumerary situation.
It is proposed therefore to undertake an ‘expression of interest’ exercise for VR in Leisure Services – such an exercise would not commit the council or any employee to VR. Instead, this would give management a feel for those employees who may wish to be released on a voluntary basis (rather than be part of the significantly changed service delivery model) and which of these employees meet the criteria for VR, if this were to be progressed. Over the coming months, officers will scope the potential costs and organisational design implications of staffing changes for effective Leisure Transformation and present this to Committee for its consideration.
The trade unions also requested information on the running costs for leisure services as it is their intention to develop an alternative transformation plan, based on the in-house business operating model. This engagement is welcome and for the reasons outlined above, it is suggested that Committee requests that any alternative business plan is received from the trade unions by February 2014, in order that it can be subject to the appropriate due diligence testing and strategic appraisal in order for Committee to consider this alternative plan at its meeting in June 2014.
Regular engagement with both local and regional representatives is planned over the coming months. This includes a trade unions visit to Greenwich Leisure Limited in November 2013.
2.5 Communications and engagement
Members have emphasised the need for good communications throughout the Leisure Transformation Programme. Given the ‘once-in-a-lifetime’ scale of capital investment and business transformation, it is proposed that as part of the Communications Strategy for the Investment Programme, a series of public announcements is planned for early 2014.
Internally, staff briefings have been completed in September and a regular newsletter is now being prepared for distribution to all staff. Staff engagement groups have also been established.
3.0 Recommendations
Members are asked to:
· Agree the proposed decision schedule as outlined above; and
· Authorise officers to initiate an ‘expression of interest’ exercise for a potential future voluntary redundancy scheme in Leisure Services.
4.0 Resource Implications
This will be a major physical and service transformation process and the implications for resources (staff, assets and financial) will be fully scoped and assessed as part of the options appraisal and business planning processes, with continuous engagement with staff and trade union representatives as appropriate.
5.0 Equality Implications
Provision has been made within resources to screen the Leisure Transformation Programme at relevant intervals in line with the Council’s equality obligations.”
After discussion, the Committee adopted the recommendations.
Supporting documents: