Future of Leisure Member/Officer Working Group

FIFE COUNCIL

Adult Services Committee

31^st March 2006

Agenda Item No

FUTURE OF LEISURE WORKING GROUP

SPORTS CENTRES & SWIMMING POOLS - THE WAY FORWARD

1.0 INTRODUCTION

1.1 The role and remit of the Future of Leisure Working Group was set out in the report on `The Future of Leisure in Fife' which was considered by the Adult Services Committee of 23^rd June 2004. Its remit was to consider the issues, challenges and options which were available to ensure a strategy for sustainable quality leisure provision in Fife.

From the outset, it was agreed that the working group should focus its efforts on those facilities where there were significant infrastructure and investment issues to be addressed.

The purpose of this report is to

present the general findings of the review.
outline a range of options relating to key facilities.
propose a way forward set within the wider context of sport and leisure plans for the major population centres in Fife.

THE REVIEW

2.1 The Future of Leisure Working Group has undertaken an analysis of Fife's significant sports centres and swimming pools through considering a range of factors including; the strategic context; market appraisal; infrastructure and investment requirements; management arrangements and current performance; and major options for key facilities within the context of the development of leisure plans for the major population centres in Fife. The examination of these issues was informed by a combination of internal research and technical assessment coupled with advice and assistance from external Consultants.

The following sections summarise the key conclusions.

2.2 STRATEGIC CONTEXT

Nationally, Sport 21 and Let's Make Scotland More Active: A Strategy for Physical Activity (both 2003), define a framework of the development and delivery for sport and physical activity in Scotland. This provides for an increased focus on overall levels of physical activity and participation particularly amongst young people, as well as improvement in performance levels. It recognises that a higher standard of facilities will be required to assist in achieving these aims and objectives. The profile of sport has also been raised recently with both the award of 2012 Olympics to London and the announcement of the Scottish bid (Glasgow) for the 2014 Commonwealth Games.

2.22 The implications for Fife as a local authority are the need to deliver a physical activity strategy at a local level in order to contribute towards a more active Fife and Scotland. Community Services clearly has an important role to play in terms of delivering the types of programmes, facilities and opportunities that work towards achieving these objectives.

MARKET APPRAISAL

An appraisal of the market concludes that there is generally a good distribution of facilities to serve the major population centres of Fife, although further development in the health and fitness sector may be possible. The appraisal also suggests that while the distribution of facilities is good the condition of some of this provision is unlikely to continue to meet market expectation. The analysis also suggests there is a significant over supply of swimming pools in Fife, although there is recognition that this reflects the diverse geography in Fife and historical patterns of distribution. The analysis also indicates when the current position is compared to the likely demand it is evident that the future provision of sport centres and swimming pools in Fife will need to change significantly if a modern customer focused service is to be delivered.

INFRASTRUCTURE INVESTMENT

Consideration has been given to the significant capital investment required in the existing swimming pools and sport centres over the next 15 years. This has been based upon condition surveys undertaken and estimates that investment in the region of £50M would be required to address both short to medium term refurbishment and in some cases longer term replacement.

The estimated capital expenditure required to address the options outlined in section 3 alone- for the key facilities in Glenrothes, Kirkcaldy and Dunfermline range from over £20M to over £30M.

INVESTMENT OPTIONS

A number of possible funding options have been examined, including mainstream capital programme, prudential borrowing, capital receipts deriving from asset sales, and PPP/PFI.

It is clear the Council currently has insufficient capital funding programme to address these costs in full. A number of the options outlined in section 3 would provide opportunities for significant revenue savings from replacement / new provision which are likely to be more efficient in terms of operation. If these savings are utilised in part/ full to access prudential borrowing a significant contribution can be made to meet the investment requirements. In addition any savings which would accrue from the development of a Trust type body (which is considered later within this report) would also provide potential for prudential borrowing. Equally there is likely to be a need to review the level of provision made within future years capital plans.

It is clear that a more detailed financial and business planning appraisal will be required following the outcome of initial consultation on the development of preferred options.

MANAGEMENT & DELIVERY

For 2005/6 Community Services will generate an income of around £3.6M from its sports centres and swimming pools. However, when analysing the financial performance more closely it is evident that the ratio of costs to income generated is relatively poor. This is in part related to high utility costs, which is not unexpected given the age, design and condition of many facilities. The ratio also reflects the positive choices the Council has taken in providing a wide range of local provision to serve Fife's many communities. Nonetheless, the current staffing costs within sport centres and swimming pools are high and benchmarks indicate that this is an area, which should be given further attention. This would be a key element of the best value review, which is proposed at 3.46.

The review also considered a range of alternative management options including the potential for lease or PPP/PFI. However there are no obvious executive supported schemes in Scotland at present that would assist, in a similar way to the schools PPP programme. If this position were to change in the future, then this may provide opportunities in Fife.

Consideration has also been given to the advantages and disadvantages of setting up a Sport and Leisure Trust to operate some or all of the Council's existing or planned new provision. A significant number of local authorities have established Sport and Leisure Trusts to operate their facilities, with most establishing these Trusts in response to the budget difficulties faced by their Councils, and the financial advantages that Trusts potentially present. Initial work done to assess this in relation to Fife indicate that savings in national non domestic rates (NNDR) and VAT would generate a saving of £825,000 per annum were all of the current provision transferred to the management of a Trust mechanism.

Given the right circumstances, a Sport and Leisure Trust in Fife could provide an opportunity to use NNDR savings to help to address the capital investment difficulties highlighted earlier, e.g. through the use of prudential borrowing, as well as delivering further efficiency savings and improving services. There could be other benefits to this approach including the potential to access external funding which might not otherwise be available to the Council, coupled with a sharper business focus and an ability to respond more quickly and flexibly to our rapidly changing sport and leisure environment.

If this option were to be further explored, careful consideration would have to be given to links between the Trust and the Council, both in terms of board representation and in agreeing funding arrangements. There would also be significant staff issues to resolve arising from a Trust and these would require to be managed in conjunction with the Trade Unions and in accordance with Managing Change. There would also be implications for support staff.

It is clear that more detailed work is required to better assess the full implications of progressing a Leisure Trust in Fife. It is therefore proposed that further consideration should be given to possible alternative management and delivery models for sports centres and swimming pools in Fife, including the possible transfer of management of some or all of these facilities to an appropriate trust mechanism. It is proposed that further consideration of Trust models is developed by the Future of Leisure Working Group.

CONCLUSIONS

2.71 The work done to date has identified that;

The scale of the task is significant, given a steadily declining infrastructure and an urgent need for significant reinvestment to maintain, improve and possibly replace some of the current sports centres and swimming pools.
There is a need to give serious consideration to opportunities which, will address efficiency of current operations, and also to consider the potential of alternative management and delivery models.
There needs to be a recognition that given the scale of investment required it will be difficult to resolve all of the challenges simultaneously. A more pragmatic approach is therefore required which phases the development and upgrading works according to the most urgent issues confronting the Council.

2.72 In considering this phased approach, the Working group has focused initially on the significant investment challenges at FIPRE, Kirkcaldy Swimming Pool and Carnegie Leisure Centre. The following appraisal of options relates to examining how best to ensure continued quality leisure provision, which will serve the populations currently supported by these facilities. In considering each of the options, the opportunities and challenges which relate to each option are outlined.

3.0 OPTIONS APPRAISAL

3.1 FIPRE

3.12 The age & condition of FIPRE is such that stark choices now face the Council. It was designed and constructed with a lifespan of some 30 years in mind and that milestone passed in 2000. Not surprisingly, the building is now in urgent need of major capital investment, estimated at £8 million over the next five years. Most of this money is required to address the basic fabric & structure of the building. Beyond the next five years, it is inevitable that further significant ongoing capital investment would be required to sustain and redevelop the building.

3.13 It must also be recognised that the annual revenue costs for FIPRE are very high & it operates with a budgeted annual deficit of £2.2 million for 2005/06. It nonetheless continues to be well used with 463,000 visits in 2004/05.

The options for FIPRE are as follows:

3.14 Option One: Retain and Invest

A short to medium term investment of £8 million would address the significant works identified in the condition survey, but would not provide any modern enhancements or cosmetic improvements.
There are insufficient currently programmed Capital resources to fund this investment. Significant additional funding would be required.
A full evaluation of the cost effectiveness of this option versus investment in replacement provision would be required.
A significant ongoing revenue subsidy would be required which currently sits at £2.2 million per annum.

3.15 Option Two: Replace with New Swimming Pool & Sports Centre

A new facility to provide similar provision on the existing or alternative Glenrothes site would cost in the region of £10M.
There is potential to reduce operating costs within a new facility; the reinvestment of this saving to secure prudential borrowing could support the funding of this option

3.2 KIRKCALDY SWIMMING POOL

3.21 The issues concerning the age & condition of Kirkcaldy Swimming Pool are identical to those outlined for FIPRE in paragraph 3.12, although, in this case, the short term capital investment required is £6 million. The facility is budgeted to operate with an annual deficit of £1 million for 2005/06 and attracted 123,000 visits in 2004/2005.

The options for Kirkcaldy Swimming Pool are as follows:

3.22 Option One: Retain and Invest

A short term investment of £6 million would address the major works identified in the condition survey, but wouldn't provide any modern enhancements or cosmetic improvements.
There are insufficient currently programmed capital resources to fund this investment.
An ongoing revenue subsidy of £1 million pa would be required.
There are question marks over the cost effectiveness of this approach, particularly when the building is still unlikely to be truly fit for purpose.

3.23 Option Two: Replace with New Swimming Pool

A new like-for-like replacement facility - i.e. with 25 metre swimming pool and ancillary provision - would cost in the region of £6 million.
There would be the possibility of partially funding this approach by reducing revenue costs & using the saving for prudential borrowing.
There is the potential to consider replacement on alternative sites in Kirkcaldy which may also assist by freeing up the existing site to contribute to the regeneration of Kirkcaldy Town centre.

3.3 REGIONAL SPORTS CAMPUS

A Regional facility could be developed to serve Central Fife and beyond.
This could provide state of the Art provision for swimming (competition, training and leisure); indoor sports, health, fitness, dance and education provision; outdoor sports provision; and potential for synergy with other private and voluntary sector sports provision.
It is estimated that this may cost £15-£20M.
There is potential to fund this at least in part from prudential borrowing derived from revenue savings - although the level of saving would depend upon the extent of rationalisation of existing facilities.
A new regional facility may also be able to attract external funding support from agencies including Sportscotland.

It would be important to undertake a comprehensive site assessment were this option to be progressed.
It should be noted that this option could be developed as an enhancement to the existing options outlined at 3.1 or 3.2.

3.4 CARNEGIE LEISURE CENTRE

3.41 Although the original Carnegie Leisure Centre was built in 1905, there were additions to the building in the mid-1980's & early 1990's. Whilst there is still a requirement for a significant capital investment of some £6 million over the next 10 years in order to deliver a modern, fit-for-purpose sport & leisure facility, this could be sustained on a best value basis by refurbishing and developing rather than replacing the existing facility. The facility received 453,000 visit in 2004/05.

3.42 As well as the long history and tradition that sits behind one of Andrew

Carnegie`s major legacies to Dunfermline, this view is supported by the constraints associated with its Grade B listing. This severely limits the value of the site in terms of either disposal or a viable alternative use & reinforces the case for retaining, refurbishing & developing the facility.

3.43 However, this obviously limits the opportunity to deliver capital funding for a major refurbishment programme and, again, it would be important to consider the use of a Trust mechanism for Carnegie Leisure Centre so that the NNDR/VAT savings could be used to secure a contribution towards the investment funding required through prudential borrowing.

The options for Carnegie Leisure Centre are as follows:

3.44 Option One: Retain and Invest

A short to medium term investment of £6 million would address the significant works identified in the condition survey.
This would retain a major and significant historic building, which has been more recently extended.
An ongoing revenue subsidy of £1.4M p.a would be required.
There are insufficient currently programmed capital resources to fund this investment.
A trust option, with the reinvestment of the rates savings, could help to bridge the funding gap through the use of prudential borrowing.

3.45 Option Two: Replace with New Swimming Pool & Sports Centre

A new facility - with 25 metre swimming pool, a sports hall and ancillary provision - would cost in the region of £8 million.
There would be the possibility of partially funding this approach by reducing revenue costs & using the saving for prudential borrowing.

There could be potential for the facility to be delivered as part of the proposed Western Expansion.
There would be limited redevelopment options for the existing site and this would necessitate a continued revenue commitment.
There would also be the potential loss of a significant heritage asset.

3.46 OTHER SPORTS CENTRES AND SWIMMING POOLS

3.47 The current option appraisal has not in detail considered the remaining other Sports centres and swimming Pools across Fife. It is proposed that a second phase would require a best value review of the continuing provision and management of the remaining sport centres & swimming pools.

4.0 PROPOSED WAY FORWARD

DEVELOPMENT OF LEISURE PLANS FOR GLENROTHES, KIRKCALDY, DUNFERMLINE

4.1 It is essential that options in relation to the aforementioned key facilities cannot be considered in isolation from a broader consideration of the sporting and leisure requirements of the communities in which they reside. It is equally clear that in developing our long term strategy for the provision of quality sports and leisure facilities in Fife that the key population centres will continue to provide a focus for this. It is therefore proposed that detailed consultation on the current levels and location of provision within these 3 key communities is progressed and this, along with an audit of current and proposed provision, is used to inform the development of a long term sport and leisure plan for Glenrothes, Kirkcaldy, and Dunfermline. It is further proposed that following the production of these plans similar plans would be prepared for other key population centres including Levenmouth and Cupar/St Andrews.

4.2 Glenrothes

It is important that we recognise the pivotal role that Fife Institute has played over the last 4 decades in providing a sports and Leisure focus in Fife and a broader commitment to the ideals of participation education and excellence. In considering the development of a leisure plan for Glenrothes detailed consideration will be given to how best to achieve a continued presence at FIPRE. This should consider a combination of investment in existing provision on site, and consideration of new enhanced provision. It will also be important to consider the distribution of sporting and leisure provision across Glenrothes that currently exists and to examine the potential for new replacement or enhanced provision at other locations. The overall objective should be to ensure that quality sporting and leisure provision is accessible to the local population and that this will require the availability of sports and leisure provision at a range of Glenrothes locations.

4.3 Kirkcaldy

In considering the sporting and leisure requirements within Kirkcaldy a review of existing and planned provision will be necessary. Consideration of the options relating to Kirkcaldy Pool should be considered in the wider context of the potential for regeneration within Kirkcaldy Town Centre, as well as any longer term proposals for the eastern expansion of Kirkcaldy. This potentially provides the opportunity to consider new and enhanced sports and leisure provision but this must be balanced by a broader consultation on issues of accessibility. Given the range of factors currently weighing on the existing Kirkcaldy Pool, serious consideration should be given to exploring options for replacement or enhanced provision on a new site, within the context of a broader sports and leisure plan for Kirkcaldy.

4.4 Dunfermline

In considering future sports and leisure provision in Dunfermline consideration requires to be given to the current needs and future needs emerging from planned expansion. Equally the historic importance and significance of the Carnegie Leisure Centre requires careful consideration. The current building is a prominent and important part of the townscape. While it is reasonable to examine the cost effectiveness of investment in the existing facility against replacement provision, the additional factors relating to it's historical significance, as well as the limited potential for alternative development of the existing site leads toward a conclusion that continued investment should be made in the existing provision. Consultation on and consideration of sports and leisure in Dunfermline, therefore requires an early and clear view on investment in Carnegie Leisure Centre, coupled with the production of a longer term sport and leisure plan for the town which considers future growth needs and recognises planned commitments (e.g. Duloch Park).

CONSULTATION

5.1 Given the significance of the decisions which the council requires to make regarding the future strategy for the deliver of quality sport and leisure provision in Fife, it is essential that there is extensive consultation which provides a clear and transparent opportunity to engage with The Council, and to assist in informing ultimate decisions.

It is therefore proposed that a consultation exercise is undertaken in

Fife with a particular focus on the three key communities of Dunfermline, Glenrothes and Kirkcaldy. It is recommended that the consultation exercise will allow for exploration of the full range of options outlined in this report and in the development of the sports and leisure plans for the three communities. The consultation will include;

input from existing user groups
appropriate national sporting organisations.
formal involvement of major stakeholders including sports clubs, sports councils, community councils and other interested groups.
wider public consultation.

5.3 It is anticipated that the initial phase of consultation will be undertaken over Spring/ Summer 2006 following which an interim report which identifies preferred broad options, within the context of outline leisure plans, will be prepared.

RECOMMENDATIONS

Members are asked to:

6.1 Note the key development options for FIPRE, Kirkcaldy Swimming Pool and Carnegie Leisure Centre as outlined in Section 3 of this report and agree that these should form the basis of extensive consultation with local communities and other key stakeholders throughout Fife.

6.2 Agree that further work to develop community sport and leisure plans as outlined in section 4 should be undertaken for each of the major population centres in Fife, commencing with Glenrothes, Kirkcaldy and Dunfermline and that these will also form part of the consultation exercise.

6.3 Agree that further consideration should be given to possible alternative management and delivery models for the sports centres and swimming pools in Fife, including the possible transfer of management of some or all of these facilities to an appropriate trust mechanism.

6.4 Agree that the Head of Community Services undertake a detailed best value review of the other sports centres and swimming pools in Fife.

6.5 Agree to reconvening the Future of Leisure Working Group in order it can oversee the continuing significant work in this area.

6.6 Remit the Future of Leisure Working Group & the Head of Community Services to report back to Adult Services Committee after completion of the consultation with local communities and other key stakeholders.

Steve Grimmond

Head of Community Services

Grant Ward

Senior Manager

Sport, Parks & Countryside

Community Services

Tel No: 01592 416077

Ref - 074 - ASC / 31 March 2006