Agenda item

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 net contribution to the Revenue Budget

o        Partnering with other councils/bodies to reduce costs 

o        Knowle Green Estates (KGE) generating a net revenue contribution towards the Council’s Revenue Budget

o        Increasing fees and charges income

o        ‘Invest to save’ initiatives led by the Continuous Improvement Team

o        Digital Transformation including the potential to reduce the number of applications the Council is paying for

o        Looking at options to reduce the cost of the Council’s office accommodation footprint, particularly in the context of more hybrid work post the pandemic

o        Procurement savings

o        Green initiatives. Whilst some may require additional investment, some will potentially generate revenue savings

 

The current Revenue Budget gaps in years 3 and 4 of the Outline Budget period at £2.6m for 2024-25 and £3.4m for 2025-26 are of a similar scale as projected in the past for years 3 and 4 in the Outline Budget cycle. As such, we believe there is sufficient time to close these gaps and thereby address the Leisure Centre funding shortfall. The detailed Budget report coming to February Corporate Policy and Resources Committee and Council will be presenting a balanced Budget for 2022-23 which would in turn help reduce the scale of projected gaps for the years two to four of the Outline Budget period.

 

Councillor H. Harvey asked a supplementary question as follows:

 

‘Does the Leader feel confident that this Chamber should proceed with this state of the art Leisure Centre when it appears to me that this answer does not project far enough into the future as to how the gap will be closed ongoing’.

 

The Leader advised that he would provide Councillor H. Harvey with a more detailed written answer to this question but stated the following:

 

“Council agreed to build this Leisure Centre and we were aware of the costs; this is something that we should be doing for our residents. There is a concept in economics knows as ‘public good’ which relates to things that no individual can purchase but which individuals would like eg parks. I put Spelthorne Leisure Centre in this category, something we want to have and should provide to our residents.

 

I am strongly in favour of this and am confident that we will find the revenue so that we can bridge this gap but it won’t be simple”,

 

Council considered a report on the proposed replacement of Spelthorne Leisure Centre and resolved to:

 

1.    note progress to date with the Pre-Construction Services Agreement (PCSA) with the preferred bidder as the main contractor for the construction of the proposed new Spelthorne Leisure Centre and,

 

2.    delegate authority to the Deputy Chief Executive in conjunction with the Chairs of the Corporate Policy & Resources Committee and Community Wellbeing & Housing Committee to agree the fixed contract sum and award the contract to build the new leisure centre to the preferred bidder as the main contractor, provided that the final price for construction is within the Capital Programme provision agreed by Council on 29 October 2020 and reflected in the 2021-22 Capital Programme.

 

Council agreed that the order of the Agenda be amended in accordance with Standing Order 17. (c) to consider both Notices of Motions at this point in the meeting.

 

In accordance with Standing Order 16 the Council received two written Notices of Motions.

 

1. Councillor R. Smith-Ainsley moved and Councillor M. Beecher seconded the following motion:

 

There has been real concern amongst residents and councillors about the lack of a Vision for Spelthorne.  In order to create one, three important Visioning sessions were held and the councillors attending worked hard to produce a Vision.  An opportunity has been given to all councillors to review it and it has also been checked by officers to ensure it is sound.

 

I therefore move that:

 

Council incorporate the Vision into the new Local Plan and from the next meeting of the Local Plan Task Group use it to review existing policies and inform future ones.

 

Councillor J. Boughtflower requested a recorded vote.

 

 

For: Councillors S. Doran, C. Bateson, M. Beecher, J. Doran, R. Dunn, S. Dunn, T. Fidler, K. Grant, T. Lagden, L. Nichols, D. Saliagopoulos, J. Sexton, V. Siva, R. Smith-Ainsley, B. Spoor and J. Vinson (16)

 

Against: I. Harvey, M. Attewell, C. Barratt, R. Barratt, I. Beardsmore, J. Boughtflower, A. Brar, S. Buttar, R. Chandler, N. Gething, A. Harman, H. Harvey, N. Islam, V. Leighton, J. McIlroy, A. Mitchell, S. Mooney, R. Noble, O. Rybinski and R. Sider BEM (20)

 

Abstain: Councillor M. Gibson (1)

 

The Motion FELL

 

 

2. Councillor S. Dunn moved and Councillor M. Beecher seconded the following motion:

 

This Council seeks to clarify its position in respect of the Local Green Spaces’ consultation. This consultation is designed to give extra protection to the Local Green Spaces where possible.

 

Our current scheme for this - Protected Urban Open Space (PUOS) has failed completely to offer any extra protection. After we introduced PUOS the government produced a new standard to add protection to smaller Green Spaces ‘Local Green Space’. (LGS). LGS can only be protected as part of the local plan process, such as we are undertaking currently.

 

This Motion therefore urges all Councillors to support the following:

 

1.    That all existing PUOS sites be submitted for possible inclusion in the list of proposed new Local Green Spaces sites

2.    That after consultation held with Spelthorne residents finishes that further individual sites are discussed through the Local Plan Task Group as potential LGS sites

 

The motion was carried.

 

 

The meeting was adjourned at 20:54

The meeting was re-convened at 21:09