Decision details

Council considered a report by the Contracts Delivery Manager and minute extract of the special Executive meeting held on 26^th February 2019 (circulated previously) regarding Leisure Provision at Seven Brethren.

The Contracts Delivery Manager highlighted the following:

·         The tender process was still live, therefore the report was confidential and needed to be considered under Part B of the agenda.

·         Analysis of the audit undertaken of the current leisure provision in North Devon.

·         Proposals for a new Leisure Centre provision submitted by the tenderer.

·         Leisure Centre usage over the past 12 months.

·         Leisure Centre current usage groups

·         Costs and sources of external funding.

·         Prudential borrowing requirements for the Council.

·         Further opportunities available to the Council in relation to borrowing, costs and contract clauses.

The Head of Resources highlighted the following:

·         Revenue Budget for 2019/20 and potential risks for future funding in relation to Business Rates Retention and the New Homes Bonus.

·         Local Government Finance funding reforms planned for 2020/21 and uncertainty over future funding.

·         The Business Cases for capital funds which had been approved by Council on 25^th February 2019 and the Council’s increased borrowing requirements for some of these projects.

·         The overall Capital Programme approved by Council on 25^th February 2019.

·         Capital funding and future borrowing costs for the existing programme commitments.

·         Medium Term Financial Strategy for 2019-23 approved by Council on 25^th  February 2019 and forecast budget gaps for the period.

·         10 Year Capital Strategy 2020-29 approved by Council on 25th February 2019 and impact this had on the future revenue budget gaps to 2028/29.

·         The Council’s current position in relation to financing and potential borrowing requirements for the proposed Watersports Centre in Ilfracombe.  This would be considered by the special meeting of the Executive on 1^st April 2019 and Extraordinary Council meeting on 15^th April 2019.

·         Leisure Centre – where we started and the original business plan.

·         Leisure Centre – where we are now in relation to financing the project and the breakdown of potential funding as detailed in paragraph 5 of the report and the requirement for banked and future anticipated income from section 106 agreements.

·         Financing of the project subject to the final build priced submission and external funding bids being confirmed.

·         Leisure Centre financial modelling as detailed on page 269 of the report and to be considered in light of highlighted risks, assumptions made and the uncertainty around local government funding changes on the horizon.

·         Financial model context.

·         Financial model risks which included the already projected revenue budget funding gap as detailed in the 10 Year Capital Strategy.

·         Risks of not proceeding with the project.

It was moved by Councillor Jones and seconded by Councillor Moores “that the recommendations 2.1 and 2.2 in the report be adopted”.

An amendment was moved by Councillor Ley and seconded by Councillor Chesters “that the recommendations 2.1 and 2.2 in the report be adopted subject to the banked sources of section 106 funding from planning application 55662 being removed.”

Councillor Wilkinson gave notice of a further amendment “that the recommendations 2.1 and 2.2 in the report be adopted subject to the banked sources of section 106 funding from planning applications 55662 and 39911 being removed.”

Councillor Prowse gave notice of a further amendment “that the recommendations 2.1 and 2.2 in the report be adopted subject to the amount of banked and future section 106 funding remain as detailed in paragraphs 5.2 and 5.3 of the report and that a process be agreed cross party to ensure that communities were supported and not deprived of opportunities as a result of the loss of section 106 contributions.”

In response to questions, the Head of Resources confirmed that the interest rate included in the financial model was 3.1% over 40 years.  The budget included the provision of fixtures and fittings and it was the contractor’s responsibility for ensuring that equipment was maintained and kept up-to-date.  Appropriate bonds and insurances would be in place for the Council should the construction company or contractor become bankrupt at any stage.  The risk for build costs would transfer to the contractor once the contract had been signed.  Separate decision would be required from the Executive for the release of Capital Programme funds, once all funding was in place.

In response to a question, the Contracts Delivery Manager confirmed that regular communications were undertaken with communities to identify their priorities for the allocation of section 106 funding.  A large amount of section 106 funding had been banked for a significant length of time.

Councillor Wilkinson withdrew his notice of a further amendment.

Councillor Ley withdrew his amendment.

Councillor Prowse’s notice of further amendment was then moved and seconded by Councillor Wilkinson.

Councillor Jones (as mover of the motion) and Councillor Moores (as seconder of the motion) agreed to take on board the amendment moved by Councillor Prowse and seconded by Councillor Wilkinson and include within the motion.

The motion was then put to the vote and carried.

Councillor Edgell requested it be recorded in the minutes that he abstained from voting.