Concession Agreement Template - DOC

							                                                                Agenda Item No: 6
                                                                8th September, 2010


TO THE CHAIR AND MEMBERS OF THE HEALTHIER COMMUNITIES &
VULNERABLE PEOPLE OVERVIEW & SCRUTINY PANEL

DONCASTER CULTURAL AND LEISURE TRUST

EXECUTIVE SUMMARY

1   The purpose of the report is to provide a summary to the panel as to progress
    made towards the creation of a business plan for one Cultural and Leisure trust
    within Doncaster (Doncaster Cultural and Leisure Trust) whilst still investigating
    options for an in-house model (DMBC).

EXEMPT REPORT

2   N/A

RECOMMENDATIONS

3   ●     To proceed with the creation of a business plan for a unified Cultural and
          Leisure Trust, using the Dome Leisure Trust as the Trust vehicle.
    ●     To benchmark the outcomes against an in house model.

BACKGROUND

4   Following the Cabinet meeting of 5 November 2008 the decision was taken to
    adopt the independent recommendations and proceed with the option of
    developing a One Trust model using the expanded Dome vehicle.

5   The organisations involved are:

    Doncaster Metropolitan Council, which would include all nine of its leisure
    facilities, which are:

         Adwick Leisure Centre
         Armthorpe Sports Centre
         Askern and Campsall Sports Centre
         Crookhill Park Golf Club
         Edlington Sports Centre
         Hatfield Water Park
         Rossington Sports Centre
         St James Pool and Heath Club
         Thorne Sports Centre
    Doncaster Dome Leisure Trust, which currently manages one leisure facility

       Doncaster Dome

    Dearne Valley Leisure Trust, which currently manages one leisure facility

       Dearne Valley Leisure Centre

6   Prior to these organisations working towards one business model:

       Leisure provision within Doncaster was disjointed, with the various providers
        working to differing priorities
       Participation rates were amongst the lowest in the region
       No economies of scale were being utilised for grant funded projects or
        procurement
       Council Officers had to meet and negotiate with all groups separately, so
        making joint funding bids such as the NHS Doncaster free swim top up
        payments almost impossible to complete

7   A main thrust and focus of the trust business plan is to generate financial savings
    within leisure and culture whilst increasing performance and securing the
    ongoing operation of current facilities. On the recommendation of the Council's
    Finance Section, external VAT advice was taken from Price Waterhouse
    Coopers as specialists in the field of VAT and leisure.

PROGRESS

8   Whilst Trust negotiations progress, the respective organisations are working
    towards 'one business model' whilst still keeping formal independence. This has
    led to:

       A substantial increase in the borough's National Indicator 8 rating, which
        measures adult participation in sport and active recreation
       Delivery of the free swimming initiative (2nd highest in the country for
        participation rates)
       Sharing delivery resources, allowing for extra delivery staff in areas identified
        by NHS Doncaster as having the most need, such as increasing the scope of
        the enhanced public health programme of exercise on prescription, obesity
        awareness and pain management classes.
       Joint procurement of vending services, using Dearne Valley as a pilot, to
        then roll out across the borough, leading to an improved range and quality of
        vending provision at reduced costs.
       Joint school holiday programming with one unified marketing campaign
        which has led to a 25% increase in holiday club usage across all leisure
        centres, in addition to a similar improvement in performance for other
        instructed sports courses.
9    All parties to the proposed trust have signed a memorandum of understanding in
     relation to the trust which facilitates working to the one business model.

10   A service concession agreement which details how the Council wish the trust to
     operate, giving length of lease and funding options has been issued to the
     Dome's officers and is now under detailed negotiation with our respective legal
     representatives and other Council officers. Key sections of the Service
     Concession Agreement are:

        DMBC representation on the board by ensuring that 20% of the board are
         Council appointees
        Production of annual business and service plans which detail budgets and
         pricing, can be scrutinised by members and officers and must link with
         council priorities for funding to be released
        Built in protection for all existing staff, including the requirement to comply
         with the code of practice on workforce matters in public sector service
         contracts which is designed to prevent a contractor from 're-structuring' a
         workforce after taking over a public service, this is over and above the
         standard TUPE requirement
        Detail of service level required for the level of contract payment made, such
         as continuation of swimming club and other community bookings .
        Detailed performance management requirements, which involve a client
         officer inspection regime with financial penalty for non compliance with the
         service concession agreement. For continued serous non compliance, the
         performance management framework has the ultimate sanction of contract
         termination.
        The requirement to consult with customers and local community groups
         through focus groups, community involvement.
        The requirement to work with local partners in service delivery
        The requirement to raise their own funds for re-investment, from a
         combination of grant funding as a charitable body and commercial borrowing
         where required.

OPTIONS CONSIDERED

11   Benchmarking against an in house model of operation, using the following
     assumptions:

        The in house option will include all 11 facilities detailed above
        Charitable status will no longer apply to The Dome and Dearne Valley
         Leisure Trust and Adwick leisure centre
        TUPE will apply to the Dome and Dearne Valley Leisure Trust staff
        Business rates will become payable on the Dome, Dearne Valley Leisure
         Centre and Adwick Leisure Centre
        VAT will become chargeable on activities at the Dome and Dearne Valley,
         comparable with in house fees and charges.
        All supply contracts will be under Council procurement rules when the
         contracts are renewed
12   The results of this benchmarking exercise will be available and presented to
     members as part of the decision making process.

REASONS FOR RECOMMENDED OPTION

13   To continue work to create the business plan for one Cultural and Leisure Trust
     which will allow for the current level of provision at a reduced cost and gives the
     option of continued savings due to efficiencies of scale by operating all the
     borough leisure stock as one organisation.

14   The 'one business model' has shown how the quality and scope of service
     provision can be increased and the concession agreement would stipulate
     further increases in the quality and scope of service provision

IMPACT ON THE COUNCIL’S KEY OBJECTIVES

15

Doncaster Priorities              Implications of this initiative
A Prosperous Place                Create a sustainable leisure and culture business
                                  model to generate re-investment
Skills & Lifelong Learning        Increased use of leisure facilities by schools and
                                  collages
Healthy & Caring                  Sustainability of sport and leisure provision will
                                  enhance the health of residents
Safer, Cleaner & Greener          N/A
Equality of Opportunity (Cross- Universal and targeted services or similar?
Cutting)
Improving Neighbourhoods          Sustainable leisure provision will enhance the
Together (Cross-cutting)          neighbourhood provision
Protecting The Environment        N/A
(Cross-cutting)
Achieving Excellence              The Trust must ensure that all facilities become
                                  quality assured to a nationally recognised quality
                                  scheme


RISKS & ASSUMPTIONS

16   The one business model is scheduled to be in operation by 1 April 2011; any
     delay past this date is likely to have financial implications to the Council or the
     service provision

LEGAL IMPLICATIONS
17    If approved, a new concession agreement will operate between the Authority and
      Doncaster Cultural and Leisure Trust. This would supersede the existing legal
      agreements in place for the Doncaster Dome Leisure Trust, Dearne Valley
      Leisure Trust

18    TUPE regulations would apply to all Council staff who transfer to the trust

FINANCIAL IMPLICATIONS

19    Ongoing annual savings of the one business model due to beneficial business
      rates and VAT changes will be made, with a further drive of ongoing efficiency
      savings on revenue funding

CONSULTATION

20    This report has significant implications in terms of the following:

Procurement                                 √    Crime & Disorder                      √

Human Resources                             √    Human Rights & Equalities             √

Buildings, Land and Occupiers               √    Environment & Sustainability

ICT                                         √    Capital Programme


       Legal advice and ongoing input has been utilised throughout to ensure that
        procurement issues have been addressed
       Staff, Trade Unions and Council officers are involved in ongoing consultation
        and TUPE legislation has been put in place
       All parties who hold lease arrangement affected by the changes have been
        consulted and Council officers have drafted necessary changes and ensured
        that the Council has complied with relevant government legislation
       An ICT service level agreement is been drafted between the Council and Trust
       Through the one business model, work with the police and youth services will
        be expanded on a co-ordinated borough wide basis with the aim of reducing
        crime and disorder by engagement in sport and active recreation.
       The one business models aims to ensure sustainable sport and leisure
        provision throughout all parts of the borough, ensuring equality of opportunity
        to all residents.

BACKGROUND PAPERS

19    Cabinet report 5 November 2008
      Neil Allen Associates - Options for the Future Management of Leisure and
      Culture facilities in Doncaster
      Price Waterhouse Coopers - Leisure Trust Options, VAT implications
REPORT AUTHOR AND CONTRIBUTORS

Gavin Baldwin, Assistant Director Neighbourhoods and Communities (Leisure and
Culture)
Telephone: (01302) 862507
E-mail: gavin.baldwin@doncaster.gov.uk




                                 Jane Miller
                  Director Neighbourhoods and Communities