Decision details

The Executive considered a report by the Contracts Delivery Manager (circulated previously), the options and/or alternatives and other relevant facts set out in the report regarding Leisure Provision at Seven Brethren.

The Executive noted the following typographical errors in the report:

·         Paragraph 2.2 – be amended to “That Executive approve the following:”

·         Paragraph 4.5 – second line be amended to “20m x 8.5 m learner pool”

The Head of Place provided the Executive with an update on the Seven Brethren project. 

The Contracts Delivery Manager and Parks, Leisure and Culture Officer highlighted the following:

·         Analysis 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.

·         In addition to the construction costs a budget was required for fixtures, fittings, equipment, soft landscaping and planning related fees.  The contractor would then be responsible for ensuring that equipment was maintained and kept up-to-date.

In response to questions, the Contracts Manager advised the following:

·         The new Leisure Centre provision would complement the Tarka Tennis Centre, Falcon Gymnastics Academy and the new Artificial Grass Pitch.

·         The car park would still be owned by the Council and the current number of car parking spaces would be re-provided on the new site.

·         Appropriate bonds and insurances would be in place for the Council should the construction company or contractor become bankrupt at any stage.

·         The reasons why some contractors had pulled out of the tendering process.

·         The business case would include all works required at the Ilfracombe Swimming Pool.

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.

·         Reminder of the business Cases for capital funds which had been approved by Council on 25^th February 2019 and the Council’s 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.  The new administration would need to challenge the future planned capital expenditure to bridge the gap at an early stage.

·         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 25^th 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.

·         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.

·         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 7 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.

In response to questions, the Head of Resources highlighted the following:

·         Borrowing projections and costs were be modelled over 40 years in line with the life of the asset.  A treasury management plan would be produced which could include different tranches of borrowing.  The Council would look at the most cost effective method of borrowing and would be reviewed during the 40 year period. 

·         The financial model did not include inflation, however the contract would allow for inflation.

In response to a question, the Head of Place advised that the Communities Coastal Fund had confirmed the original funding for the Watersports Centre and written confirmation would be received by the end of March 2019 in relation to the additional funds applied for.  The deadline for tenders was 12^th March 2019 and it was anticipated that further work could be undertaken to reduce the costs further and therefore reduce the funding gap.  Enquiries would be made into whether the Council could apply for funding from Fullabrook CIC.

            DECISION

            RECOMMENDED

            REASONS FOR DECISION