Issue - meetings

To consider the proposed replacement of Spelthorne Leisure Centre.

Appendix A to this report contains exempt information within the meaning of Part 1 of Schedule 12A to the Local Government Act 1972, as amended by the Local Government (Access to Information) Act 1985 and by the Local Government (Access to information) (Variation) Order 2006 Paragraph 3 – Information relating to the financial or business affairs of any particular person (including the authority holding that information) and in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information because, disclosure to the public would prejudice the financial position of the authority and potentially the preferred bidder in a competitive procurement process by allowing other bidders to know the financial position of the Council and the preferred bidder. This in turn prejudices the Council by (i) distorting the procurement process and (ii) prejudicing the opportunity for the Council to achieve a competitive price and good value for money and (iii) might dissuade organisations bidding for the Council's tenders if their commercial information was put into the public domain.

The Chamber agreed that the agenda order be changed in accordance with Standing Order 17.(c) to enable Councillor H. Harvey to ask her question submitted in accordance with Standing Order 15.

“In view of the opposition to bringing forward the Council’s planned developments and the consequential impact on revenue streams, can the Leader advise this chamber where exactly the revenue stream to cover the £17 million unfunded element of the capital costs of the new Spelthorne Leisure Centre will come from.”

Response from the Leader, Councillor L Nichols:

“When, in October 2020, the Council approved the decision to include the new Leisure Centre on the Council’s Capital Programme, it was made clear to councillors at that time that the additional income generated by the new centre with its mix of facilities would not fully cover the cost of financing the scheme. The precise proportion of the funding cost which will not be fully covered will depend on two factors: a) the income generating potential of leisure centres post the COVID-19 pandemic, and b) the prevailing interest rates at time the finance is fixed. It is still relatively early to fully understand the longer-term impacts the pandemic will have on people’s behaviour and what impact this will have on leisure centres’ income in Spelthorne and across the UK.  With regards to interest rate costs of financing the scheme, whilst the base rate is expected to rise between now and the scheme completing, the long-term gilt rates which drive the Public Works Loans Board interest rates which the Council access have in recent months fallen to new historic lows (the 50 year certainty rate is currently 1.29%). It is therefore clear, that although it is not possible to precisely calculate the Revenue Budget impact of the funding shortfall, pressing ahead with construction of the centre as soon as possible could help reduce the financing shortfall. Similarly, as outlined in the report presented to Council this evening, it is in Spelthorne’s interest to fix the build price as soon as possible if we are to minimise the anticipated increase in material and construction costs, otherwise that shortfall may rise to the point where it would be more difficult to address.

In the Outline Budget Report approved by November Corporate Policy and Resources Committee, officers have estimated that the funding shortfall could equate to a £750,000 per annum pressure on the Revenue Budget, commencing from 2024-25 following the completion of the scheme.

The Outline Budget report which went to Corporate Policy and Resources indicated that there are potential Revenue Budget gaps in each of the next four financial years which the Council will need to work to close through its medium-term financial strategy. For the years 2024-25 and 2025-26, these gaps projected include the anticipated impact of the Leisure Centre financing gap. As the Outline Budget report highlighted, a mix of strategies can be pursued to close the funding gap which include:

o        Maximising income streams from across our property portfolio and their  ...  view the full minutes text for item 650