Item_26_-_Golf_Course_Management

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					                                 Report for:
                                 ACTION/INFORMATION




                                 Item Number:



Contains Confidential     YES
or Exempt Information     Appendix 2 contains Exempt Information by virtue of
                          Paragraphs 1, 2 & 3 of Schedule 12A to the Local
                          Government Act 1972. Appendix 3 contains Exempt
                          Information by virtue of Paragraph 5 of Schedule 12A to the
                          Local Government Act 1972 [Paragraph 10 Access to
                          Information Procedure Rules]

Title                     Golf Course Management
Responsible Officer(s)    Peter Lipman – Director, Cultural Services
                          lipmanp@ealing.gov.uk Tel: 020 8825 5778
Author(s)                 Nelim Legah – Projects Manager
                          legahn@ealing.gov.uk Tel: 020 8825 6418
                          Steve Marshall – Head of Parks, C’side & Events;
                          marshallst@ealing.gov.uk Tel: 020 8825 6429
Portfolio(s)              Health and Community Wellbeing
For Consideration By      Cabinet
Date to be Considered     18th September 2007
Implementation Date if    2nd October 2007
Not Called In
Affected Wards            All
Area Committees
Keywords/Index            Golf Course Management , Perivale Golf Course,
                          Brent Valley Golf Course, Horsenden Hill golf
                          course

Purpose of Report:

To update Members on the current situation with regard to management of
the Council’s public Golf Courses at Brent Valley, Horsenden Hill and Perivale
Park. To seek authority to conduct a competitive dialogue to appoint a
suitable operator(s).
1.           Recommendations

It is recommended that Cabinet

      i)        Authorises the Director of Cultural Services, following consultation
                with the Director of Legal and Democratic Services, to take all steps
                necessary to regularise the current management arrangements of
                all the public golf courses in the borough, with a view to maximising
                the potential for a long-term management contract

      ii)       Authorises the Director of Cultural Services to conduct a
                competitive dialogue procedure in respect of the management of
                Ealing’s public golf courses at Brent Valley, Horsenden Hill and
                Perivale Park;

      iii)      Note the current arrangements in place for the management of all
                the public golf courses in the borough;

      iv)       Notes that the Pay and Play option (without committing to a
                membership) will continue to be a significant part of any new
                contract arrangement

      v)        Notes that the final award of the management services contract(s)
                will be the subject of a future report to Cabinet for decision

2.           Reason for Decision and Options Considered:

2.1          A review of the current management arrangements has taken place
             and concluded that in order for the Council to achieve Value for Money
             (VFM) a change in service delivery is necessary.

2.2          It is recommended that, through a competitive dialogue procedure, the
             Council seeks to secure a long-term contractual relationship with an
             operator, which aims to increase usage and provide VFM whilst
             working towards improving and enhancing facilities at the courses.

2.2          This approach has been proposed in order to ensure that the golf
             courses receive both the appropriate investment and specialist
             horticultural maintenance required to ensure the long-term viability of
             the business. The current arrangements do not provide scope for best
             value, and the lack of in-house expertise and a junior development
             programme, combined with bad summer weather and poor on-site
             facilities, have contributed to the declining course usage in recent
             years.

2.3          Existing users do not reflect the population of Ealing borough and there
             is no clear marketing plan in place to attract new players or target
             specific groups.
2.4   The aim of the procedure is to establish a partnership for management
      of the golf courses, develop the service, promote golf in the borough
      and at the same time make any necessary improvements to the current
      golf provision in the borough. All options proposed by the bidders will
      be considered. Although the market remains to be tested in this
      respect, it is anticipated that, by being flexible rather than setting
      specific parameters other than those in paragraph 2.5, this approach
      will produce significant savings for the Council, with potential to achieve
      a zero budget or net income depending upon the tender response.

2.5   The new operator(s) is expected to;
          Ensure that the golf courses remain as affordable Pay & Play
            facilities available to all members of the public
          Establish a co-ordinated golf development programme to
            improve access to golf, increase participation and target priority
            groups
          Provide facilities to encourage children and young people, older
            adults, girls and women, and disabled people
          Work alongside and assist the three resident golf clubs based at
            the three golf courses to develop their membership base

2.6   The ideal outcome is for all elements of the service to be managed
      directly by one operator. This option would provide the operator with
      the opportunity to make the required investment and promote all
      elements of the business. Details of all current arrangements and the
      ideal outcome of the procedure are attached as Appendix 1. However,
      prospective operators will be invited to structure their bids by costing
      various option scenarios to enable the Council to ensure it reaches the
      best balance of value for money and golf provision.

2.7   It is proposed that a project management approach is taken to identify
      any risks and to pursue all development opportunities.

3.    Background Information

3.1   The Council currently owns five golf courses, two of which are already
      under lease agreements: Hanger Hill Pitch and Putt Course has a
      lease for 12 years that commenced in September 2000 and West
      Middlesex Golf Course has a lease for 99 years that commenced in
      April 2001.

3.2   Current management arrangements for the Council’s three public “Pay
      and Play” golf courses (Brent Valley, Horsenden Hill and Perivale Park)
      are set out in Appendix 2.

3.3   Separate arrangements also exist for the operation of the pub/bars at
      Brent Valley and Horsenden Hill golf courses. These are in the process
      of being reviewed with a view to granting temporary fixed term leases
      to coincide with the start of a new management services contract for
      the operation of the golf courses from 1st April 2009.
3.4   There is an existing contract with Veolia (ES) Cleanaway (UK) Limited
      for the golf course grounds maintenance services. This contract
      expires 31st March 2008. This contract was the subject of a report
      presented to Cabinet in December 2006. Owing to the complexity of
      this process, it has been necessary to utilise the option under the
      contract with Veolia to extend their contract for golf course
      maintenance services to 31st March 2009. This will coincide with the
      start of the new contract with a golf operator on 1st April 2009.

3.5   On 25th July 2006 a report to Cabinet sought permission for a review of
      the golf courses. This has now been completed and section 4 of this
      report highlights the outcome of this review.

3.6   The findings of the recently commissioned Playing Pitch and Outdoor
      Sports Strategy & Action Plan highlighted investment was required to
      upgrade the clubhouse facilities at all three courses.

3.7   This action plan also made reference to the decline in membership
      numbers. The report attributed this to the anti-social behaviour in the
      attached leased public house at Brent Valley golf course as well as the
      concentration of golf clubs in the borough some of which are also
      experiencing a decline in membership numbers.

4.    Alternative options considered

4.1   The option to continue with the current arrangements of managing the
      courses in-house and with separate contracts for catering, grounds
      maintenance and management of the golf shops is not considered
      viable. Neither does the Council have the expertise or experience of
      managing the service direct.

4.2   The soft market testing exercise conducted in July 2007 concluded
      there is sufficient interest in the market to outsource the management
      of the Council’s three municipal golf courses, Brent Valley, Horsenden
      Hill and Perivale Park. It is important to note, however, that should one
      or more golf courses fail to generate interest in the course of the
      competitive dialogue, other options will need to be explored.

4.3   The golf supplier market indicates that there are clear opportunities to
      be explored for risk sharing or even transferring full risk. These also
      include exploring the scope for re-design/redevelopment of the golf
      courses and improving the clubhouses and other ancillary facilities
      such as the toilets and changing areas.

4.4   The soft market testing exercise included discussions with three
      prospective golf suppliers who all confirmed they are interested in
      Ealing’s golf courses. The general view is that the golf courses are
      maintained well but much more could be done to market them to
      improve usage. The majority of suppliers suggested that other
      activities such as conferencing and gym facilities at the courses may
      not interest them.

4.5   The majority of suppliers also felt that that there is an oversupply of
      courses in the borough and hinted that there were other activities that
      could work instead of golf. Should the competitive dialogue
      demonstrate that there is little or no interest in one or more of the golf
      courses, it will be necessary to explore ideas for alternative uses for
      the open space. The recently commissioned Playing Pitch and
      Outdoor Sports Strategy & Action Plan produced by Knight Kavangh
      Page (KKP) suggested that Ealing has a surplus of golf courses.

4.6   The general consensus among suppliers was that a medium term
      lease was the preferred option. This varied between a 25 – 50 year
      minimum term. A longer term would enable a large-scale investment to
      be made to improve the condition of the buildings. Development
      proposals may be subject to planning conditions and consent being
      granted.

4.7   Hillingdon Council are also in the process of tendering their golf course
      management contract, and Ealing officers met with Hillingdon officers
      and explored the option for a collaborative tender package. This option
      was eliminated due to different timing requirements. However, market
      intelligence and information continue to be shared.

4.8   Termination of any existing contracts before a new contract is in place
      may result in the need to close the courses or reduce the service. This
      would also have a financial impact on existing revenue budgets.

5.    Financial

5.1   The current golf course management arrangements are inadequate
      and do not provide best value.

5.2   Tendering costs will be funded through existing Parks and Countryside
      revenue budget.

5.3   The intention is that through a competitive dialogue, a new
      management services contract will deliver efficiency savings and also
      raise the profile of golf in the borough.

5.4   The aim is to secure an operating partner(s) for the golf courses that
      takes on the costs of investment and operations in order to maximise
      income. This approach plans to minimise the risk to the Council by
      reducing the cost outlay for the service, possibly to nil..

5.5   The Council is in the process of identifying capital budget to address
      any immediate health and safety issues. This work is to be completed
      prior to the new contract commencing.
6.    Legal

6.1   The competitive dialogue procedure is a relatively new addition to the
      procedures available to the Council when letting contracts. It is only
      available for "particularly complex contracts", where the Council is not
      objectively able to define the technical means capable of satisfying its
      objectives or able to specify the legal or financial make-up of a project,
      or both. In this case, it is appropriate because the Council cannot
      specify the financial make-up of the future management contract,
      because of the unclear outcomes of the soft market-testing.

      It should be noted that a competitive dialogue procedure is relatively
      resource-hungry and longer than a traditional tender procedure. It is,
      effectively, a form of negotiated procedure whereby the Council
      discusses and refines each bidder's proposals with them before asking
      for a final offer. Because the Council is unable to specify a major
      element of the contract, the bidders' proposals may be radically
      different from each other.

6.2   The contract will be let in compliance with the Council’s Contract
      Procedure Rules.

6.3   Further legal advice is given in Appendix 3.

7.    Value for Money (VFM)

7.1   The current golf management arrangements do not offer the Council
      VFM. The Council is responsible for the grounds maintenance costs
      as well as costs associated with the operation and maintenance of the
      cafés, shops, changing areas and toilets facilities. The Council also
      takes the risk on all income. The net cost of running the service has
      increased in recent years and unless a dramatic change in delivery of
      this service is implemented, this pattern will continue.

7.2   The current management arrangements are described in Appendix 2.
      A lack of incentives to increase income and generate income from
      other activities exposes the Council to financial risk.

7.3   There is potential to achieve better value through other arrangements.
      This could be a partner providing either capital investment and/or a
      share of golf course income or through rental from a long-term lease.
      This would attract investment whilst reducing the risk to the Council.

7.4   It is difficult at this stage to know the likely costs or, potentially, income.
      However discussions have taken place with potential operators who
      are confident that the Council could benefit from the procurement
      process. Discussions with other authorities have also taken place.
      These also suggested that the Council would benefit from a
      management contract or lease type of arrangement.
7.5    Performance of the current grounds maintenance contractor (Veolia) is
       satisfactory, and the spend compares favourably against spend on
       grounds maintenance by a neighbouring borough.

7.6    The contract length will be determined by discussions with prospective
       suppliers, neighbouring boroughs and development proposals provided
       during the competitive dialogue. A longer-term contract would provide
       better value and reduce the risk to the Council.

8.     Risk Management

8.1    A procurement plan has been drafted and a risk assessment is being
       completed to enable all risks to be managed.

8.2    Prospective bidders will need to go through various checks such as
       financial, competency, eligibility at the pre-qualification stage of the
       procurement process.
8.3    A risk in all competitive tenders is that the preferred specification is not
       attractive to potential tenderers. Therefore utilising the competitive
       dialogue route will provide officers with scope to negotiate a
       satisfactory solution.
8.4    To reflect the varying needs of the Council, it is proposed that the
       contract includes a provision for targets to be set and agreed on an
       annual basis.


9.     Community Safety

9.1    Section 17 of the Crime and Disorder Act 1998 places a duty on all
       statutory authorities to take account of community safety when making
       decisions and planning services. Therefore, the Council has an
       obligation when planning and delivering its services to consider what
       action it is taking that will contribute to a safer Ealing for people, who
       live, work and visit the borough.

10.    Links to Strategic Objectives

       Safety
10.1   Through a contract/lease arrangement, the partner will be encouraged
       to work with other key partners, such as Brentford Football Club
       Community Sports Trust who currently delivers a Positive Futures
       scheme around the borough. This is targeted at young people at
       highest risk of involvement in crime and drugs with the aim of building
       relationships through sporting opportunities.

       Health and independence
10.2   Active Ealing in partnership with the contractor and other agencies will
       continue to work towards reducing health inequalities and promote well
       being. This can be achieved by offering activities aimed at specific
       target groups such as older people and people with disabilities.

       Children and young people
10.3   The contractor will be expected to work in partnership with Ealing to
       deliver a balanced programme to include activities for children and
       young people. Participation in sport and activity not only improves their
       health, but also raises their educational attainment. The contractor will
       be encouraged to offer work placements to give young people work
       experience and life skills. Involvement in sports gives young people
       the chance to gain coaching qualifications

       Organisational improvement
10.4   Sport England has as an objective to increase participation in sport by
       an average of 1% a year. The Framework for Sport in England has
       identified a longer-term target to continue this growth to at least 2020 to
       establish England as the most active nation in the world. A new
       partner with experience of golf management would assist the Council in
       delivering this objective.

10.5 There are proposals to include sport & physical activity in the Audit
     Commission CPA inspection framework (“The Harder Test”) as a Key
     Performance Indicator. Sport England has prepared draft performance
     indicators. The percentage of adults participating in at least 30 minutes
     moderate intensity sport and active recreation (including recreational
     walking) on 3 or more days a week is one of them.

10.6 Through a contract arrangement we can expect investment, new
     developments/upgrade of the ancillary facilities and therefore an
     improvement in attendance. This will help to increase participation in
     sport and physical activity and contribute towards the 1% target set by
     Central Government.

     Equalities and Community Cohesion
10.7 An initial Equalities Impact Assessment is being drafted and will be
     submitted for approval once the procurement plan has been agreed.

11.    Staffing/Workforce and Accommodation implications:
       None for this report.

12.    Property and Assets
12.1   None for this report

13.    Any other implications
13.1   Please refer to Appendix 3

14.  Consultation
14.1 Consultation with the Portfolio holder, Cllr Nigel Sumner, has taken
     place. Some consultation with affected clubs and other existing
       providers has already taken place and this will continue throughout the
       process.

15.    Timetable for Implementation
15.1   The following is an outline timetable, subject to change as it depends
       on the procurement activity, the number of tenderers and other
       variables such as variant bids and development proposals.


Milestone                                              Deadline
Current arrangements regularised                       1st January 2008
Contract notice in OJEU                                January 2008
Evaluation of PQQ’s                                    February/March 2008
Invitation to participate in competitive dialogue      March 2008
Competitive dialogue period                            March/June 2008
Invite final tenders                                   July 2008
Cabinet decision to award contract                     September 2008
Finalise contract                                      October/December 2008
Contract executed                                      January 2009
Mobilisation Period                                    January/March 2009
Contract start date                                    April 2009



16.  Appendices
Appendix 1 – Existing arrangements and desired outcome
Appendix 2 - Current management arrangements and cost of service
Appendix 3 – Legal Advice


17.    Background Information
17.1   Cabinet Report: Golf Courses in Ealing, Extension of grounds
       maintenance contract & associated issues, 25th July 2006.
17.2   Major Procurement Plan



Consultation

Name of           Department                        Date sent Date      Comments
consultee                                           to        response appear in
                                                    consultee received report para:
                                                              from
                                                              consultee
Internal
Laura Langstaff   Strategic Procurement             30.08.07
Keith Townsend    Executive Director                30.08.07
Peter Lipman      Director of Cultural Services
Helen Bore        Director of Legal Services                   29.08.07   throughout,
                                                                          particularly App.
                                                                          3
Simon George     Director of Finance           30.08.07
Dipak Sethi      Finance Manager               30.08.07   05.09.07     Finance Section
Councillor Nigel Cabinet Member                30.08.07
Sumner


Report History

Decision type:                           Urgency item?
Key Decision - entered on forward plan   No
August 2007
Authorised by Cabinet Date report drafted: Report deadline:      Date report sent:
      member:
         .07           23rd August 2007 6th September 2007       24th August 2007
     Report no.:     Report author and contact for queries:
                     Nelim Legah – Projects Manager
                     legahn@ealing.gov.uk Tel: 020 8825 6418
                     Steve Marshall – Head of Parks, C’side & Events;
                     marshallst@ealing.gov.uk Tel: 020 8825 6429

				
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