FIFE COUNCIL

Adult Services Committee

27^th October 2006

Agenda Item No. 10

THE FUTURE OF LEISURE - PROPOSALS FOR THE REDEVELOPMENT OF FIFE'S MAJOR SPORT CENTRES AND SWIMMING POOLS

1.0 INTRODUCTION

1.1 This report is the culmination of the work undertaken by the Future of Leisure Working Group, which was set up in June 2004, to consider the key issues, challenges and strategic options available to provide high quality and sustainable sport and leisure facilities in Fife. The work has initially focused on the three major facilities in Dunfermline, Glenrothes and Kirkcaldy.

1.2 The report also gives feedback from the extensive public consultation exercise carried out during the summer months, an update on the work undertaken to develop a longer term sports facility strategy for Fife and, crucially, brings forward proposals for the three key facilities; Carnegie Leisure Centre, Fife Institute of Physical and Recreational Education (FIPRE) and Kirkcaldy Swimming Pool.

1.3 The wider national context is the clear priority being given to sport and recreation in recognition of the clear benefits to health & wellbeing that can be derived from more people in Fife being more active, more often. However, this has to be set against the national crisis in sports facility infrastructure - as highlighted in the `National Audit of Scotland's Sports Facilities' recently published by sportscotland. Not surprisingly, this concluded that significant capital investment is now urgently required in order to provide modern, fit-for-purpose sport & leisure facilities which can support increased levels of participation across Scotland.

1.4 The situation in Fife mirrors the national picture, but, if they are agreed, the proposals in this report would see the single biggest investment in sport & leisure facilities in Fife for a generation, thereby ensuring long term, high quality provision in each of our three major towns. It would also significantly enhance Fife's reputation as a leading sporting local authority in the run up to both the London Olympics 2012 and hopefully the Commonwealth Games here in Scotland in 2014.

2.0 CONSULTATION

2.1 During the summer months of 2006, a major consultation exercise was undertaken for the Council by TL Dempster Strategy and Research, its aim being to determine the views of both local communities and other stakeholders on the possible development options for Carnegie Leisure Centre, FIPRE and Kirkcaldy Swimming Pool.

2.2 The research involved different consultation methods, including:

2.3 A copy of the full report is available from the Members' Lounge in Fife House. This sets out in more detail the key findings, but in terms of the future direction for sports facility provision in Dunfermline, Glenrothes and Kirkcaldy, it concludes that:

2.4 All those consulted were of the view that the existing facilities are not suitable to meet the future sporting needs of Dunfermline, Glenrothes & Kirkcaldy and that the Council should then seek to provide facilities that could. Whilst a like-for-like refurbishment or replacement was regarded as a logical starting point, it was also suggested that, where possible, facilities should be designed to provide a much greater flexibility of use and perhaps even extended to include a 50 metre swimming pool and improved indoor and outdoor training facilities.

2.5 Encouragingly, the consultation exercise also confirmed that, despite the deteriorating condition of many of Fife's sports facilities, the level of adult sporting participation in Fife remains the highest in Scotland and that this could, in fact, be further increased via the provision of new or refurbished sports centres and swimming pools.

3.0 SPORTS FACILITIES STRATEGY

3.1 Initial work has been undertaken to develop community sports facilities plans for each of Dunfermline, Glenrothes and Kirkcaldy, including a comprehensive audit of the existing provision. Although further, more detailed work is required, the conclusion at this stage supports earlier work undertaken by the Working Group, namely, that the quantity and distribution of sports facilities in Fife is good and the level of provision is commensurate with available national standards (such as they are) and compares well with similar size towns elsewhere in Scotland.

3.2 Beyond the replacement or refurbishment of Carnegie Leisure Centre, FIPRE and Kirkcaldy Swimming Pool, there are, however, some small gaps to be filled. Dunfermline is very well served with regards to indoor sports facilities and a new centre will open at Duloch Park next year to serve the fast growing community within the Eastern Expansion. In addition, a new indoor athletics training facility - supported by £500,000 from the Sports Lottery - will open next year at Pitreavie Playing Fields.

3.3 Glenrothes will shortly benefit from the addition of a new sports hall at Glenrothes High School - which will be available for wider community use - but there remains a need for local sport and community provision in North Glenrothes. Kirkcaldy is demonstrably short of indoor sports provision and this needs to be considered through both a replacement for Kirkcaldy Swimming Pool and any other development opportunities within the town.

3.4 The work undertaken thus far is seen as the basis for taking forward a comprehensive indoor and outdoor sports facility strategy for Fife. This is a significant and essential piece of work, and one which was agreed in the revised Sport and Active Recreation Strategy adopted by Adult Services Committee earlier this year. Following informal discussions with potential external funders, in particular sportscotland, it is evident that having this strategy in place will be a prerequisite for any funding application to the Sports Lottery.

3.5 It is proposed, therefore, to develop a sports facilities strategy for Fife by the middle of 2007. It will address priorities for major refurbishment and/or replacement beyond the proposals contained here for Carnegie Leisure Centre, FIPRE & Kirkcaldy Swimming Pool, including the other sports centres and swimming pools, as well as outdoor sports provision such as sports pitches & changing pavilions and golf courses.

4.0 PROPOSALS FOR KEY FACILITIES

4.1 During the course of the last six months, initial technical and design work has been undertaken in order to determine the best way forward for Carnegie Leisure Centre, FIPRE & Kirkcaldy Swimming Pool and to better inform cost estimates. The result of the option appraisal for each building is as follows.

4.2 Carnegie Leisure Centre

The preferred option for Carnegie Leisure Centre is to retain and invest in the existing facility through a major refurbishment project. This would entail a significant (but largely unseen) upgrade of the building fabric and structure, services, plant and equipment. There would also be a major remodelling of the internal areas with the aim of providing a wide range of new or upgraded facilities and a building environment much more in keeping with modern customer expectations. The overall aim, therefore, is to create a sustainable, state-of the-art Carnegie Leisure Centre which will continue to meet the sporting and leisure needs of Dunfermline and West Fife for many years to come. The preliminary indicative cost of this approach is £13 million.

4.3 FIPRE

The preferred option for FIPRE is to replace the current facilities with a modern new facility within the curtilage of the existing site, preferably in a partnership with Adam Smith College, which is committed to the wider redevelopment of Stenton Campus. This would provide, as a minimum, a replacement for existing facilities and would be a modern, accessible, operationally efficient centre, clearly focused on the requirements of our customers. The preliminary indicative cost of this option is estimated at £15 million.

4.4 Kirkcaldy Swimming Pool

The preferred option for Kirkcaldy Swimming Pool is to replace the current building with a modern, state-of-the-art new facility, on a new site yet to be agreed. This would link in with the wider masterplanning work being undertaken on the redevelopment of the town through Kirkcaldy Regeneration. In the immediate short-term, given the poor condition of the existing facility, some essential repairs and maintenance spend may be required to ensure its continued use until such time as the replacement facility is completed. The preliminary indicative cost of the replacement option is £8 million.

4.5 Centres of Excellence

In bringing forward these proposals for the three major facilities, we are also keen to maximise the potential to establish these as key Centres of Excellence. We will therefore explore with sportscotland and other potential funding partners the potential to add value to this provision by providing enhanced facilities which would support provision of facilities of regional and national significance. We will also ensure that sporting and learning programmes are maintained and enhanced to support this centre of excellence concept, e.g. building on FIPRE's reputation for its work around disability sport and vulnerable individuals.

4.6 It is important to emphasise that design and costing work undertaken to date is both preliminary and indicative. The next step, subject to the agreement of this Committee, will be to immediately commence detailed design and costing work, including full consultation with all key stakeholders on the nature, extent and design of the facilities.

5.0 FINANCING THE INVESTMENT PROGRAMME

5.1 The creation of a capital investment stream in excess of £30 million in the short term clearly provides a significant challenge for Fife Council. This level of capital investment cannot be contained within the existing agreed capital plan, where traditionally investment in the sport & leisure infrastructure has been approximately £1.25 million pa. The future capital provision is projected at similar levels. Whilst it is proposed to utilise existing capital allocations, it is further recommended that significant additional capital should be secured in order to meet these investment requirements and that this should be financed by prudential borrowing.

5.2 In essence, this will require a major reduction in Community Services' revenue costs, sufficient to meet the annual borrowing charges relating to additional capital investment. It is proposed that this is progressed by utilising operational savings accruing from the creation of the new build and refurbished facilities, coupled with the establishment of a community sports and leisure trust mechanism to manage and operate all of Fife's sports centres and swimming pools.

5.3 It is anticipated that opportunities provided by modern new build design will allow for far more energy efficient and environmentally sustainable operating models. In addition, these new models will also provide an opportunity to review our overall cost/income ratio and will help identify opportunities for further operational and staffing efficiencies. It is also anticipated that these new, significantly enhanced facilities will benefit from increased use and that additional income will also be generated.

5.4 Taking of all these factors into account, and with the proviso, at this stage, that it is difficult to accurately predict the level of actual savings, it is nonertheless both reasonable and prudent to assume that it would be possible to achieve annual revenue savings of £600,000 through additional operational efficiencies and enhanced income. Utilising this level of saving to pay for additional prudential borrowing will provide an additional capital investment sum in the order of £10.5 million.

5.5 Consideration has previously been given to the creation of a leisure trust, with the Adult Services Committee in March this year agreeing to the further exploration of trust models. A detailed report exploring the types of trust bodies that could be established and the pros and cons relating to trusts was subsequently prepared for the Future of Leisure Working Group and a copy is available in the Member's Lounge in Fife House.

5.6 A significant driver across local authorities in Scotland and the UK has been the potential revenue savings which flow from the establishment of a trust. An initial financial assessment, based on the establishment of a trust to operate all 12 of the sport & leisure centres in Fife (listed at Appendix One), estimates an annual year-on-year saving of £950,000 achieved via a combination of business rates (NNDR) and tax benefits. Investing this level of saving in additional prudential borrowing should provide a further £17 million of funding for the investment programme. It is proposed, therefore, that an in principle agreement is sought to establish a community sports & leisure trust and that detailed proposals for the establishment of this trust are brought forward in due course. Further consideration of the proposed community sport and leisure trust and key issues are outlined later in the report.

5.7 There is also the opportunity to pursue external funding contributions to the overall investment plan. The key external funding route for sports facilities in Scotland is the 'Building for Sport' programme operated by sportscotland. This supports both community sport provision and any investments in regional and national training and competition facilities. There is a maximum grant level of £500,000 for any single element. Informal discussions with sportscotland would suggest there will be an opportunity to bid for certain key elements of the proposed investment programme. As a result, it would be prudent to assume a modest level of external funding to support the investment programme.

5.8 In conclusion, it is proposed that to address the significant challenge of identifying sufficient finance to meet the investment programme needs, a combination of measures are pursued, e.g. utilising existing future years' capital plan allocations, seeking external funding and maximising prudential borrowing opportunities through operational revenue savings and the creation of a community sport & leisure trust. These combined measures will enable the progression of the investment programme.

6.0 COMMUNITY SPORT AND LEISURE TRUST

6.1 More than twenty local authorities in Scotland now operate some or all of their sports and leisure facilities via some form of trust mechanism, a trend which has accelerated in recent years as budget pressures have increased. Fife Council itself already manages and delivers many of its countryside services through the Fife Coast and Countryside Trust and recently agreed in principle to adopt the same approach both for Ardroy Outdoor Education Centre and Theatres and Arts Development.

6.2 The model generally favoured by Fife Council is a Company Limited by Guarantee. This is a form of limited company, within which members agree to guarantee the debts of the company, if it fails, up to an agreed limit per member of, typically, just £1. Such a company has no actual shareholders and members have the protection of limited liability. The company is a legal entity in its own right & can enter into agreements. The Board of the company is elected by - and will take decisions - on behalf of its members.

6.3 A Company Limited by Guarantee can own property, borrow money and employ staff and it can generate - but not distribute - profits which must be reinvested in the company. They can have a community membership or restrict membership to a smaller group. They have a long history of use for these type of arms length arrangements, are easy to set up and its company structure is familiar to banks and other financial institutions. They are governed by the Companies Act 1985.

6.4 A Company Limited by Guarantee can secure charitable status - this is a standard approach for any community sport and leisure trust - and as such is entitled to concessions relating to tax, VAT and, most crucially, the business rates (NNDR). As already mentioned, the latter provides the means to significantly underpin additional prudential borrowing.

6.5 It is therefore proposed to establish a community sport and leisure trust as a Company Limited by Guarantee, with the Board of the company being constituted with 13 members: 6 Councillors and/or officials and 7 representatives from relevant communities of interest, e.g. local sports councils, customers, sports clubs/national governing bodies and local community and business interests.

6.6 A business transfer agreement, funding agreement and various leases and licences will need to be concluded in order to transfer sports and leisure functions prior to completion. A service level agreement or service specification setting out the outputs/outcomes to be achieved by the trust will also need to be agreed and put in place.

6.7 The Council will need to be satisfied that the transfer to the trust is not going to compromise its service level, policies and objectives. This will require reassurances about maintaining and developing the quality and quantity of sport and leisure programmes and a mechanism to review the annual grant and perhaps influence the setting of fees and charges.

6.8 Above all, the Council will want to ensure that the transfer to a trust will not undermine existing good practice and will help support significant service improvement. The new trust structure will have to demonstrate that it is flexible enough to meet future challenges and able to respond quickly and effectively to improve services. The Council will therefore need to ensure that there are robust, but streamlined arrangements in the trust for executive decision-making.

6.9 Following transfer, sport and leisure staff would become employees of the new trust. The terms and conditions of staff would be protected by the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE). This would be underpinned by a guarantee of indefinite preservation for those staff transferring to the trust and the Council can, through agreement, look to secure the same for all future employees of the trust (although this would probably be at additional cost). Pension arrangements can be protected by the ability of the trust to be granted "admitted body" status within the Scottish Local Government Pension Scheme. It is proposed to establish a joint working group with the Trade Unions to take forward consideration of these issues.

7.0 RECOMMENDATIONS

7.1 Members are asked to:

(a) Note the key findings of the extensive community consultation exercise carried out on behalf of the Council.

(b) Agree to the development of a Sports Facilities Strategy for Fife.

(c) Agree to the significant investment proposals for the redevelopment and replacement of key facilities as outlined in Section 4, namely, the refurbishment and enhancement of Carnegie Leisure Centre; the replacement of FIPRE with a new facility within the existing site (preferably in partnership with Adam Smith College); and the replacement of Kirkcaldy Swimming Pool on a suitable site.

(d) Agree in principle to the establishment of a community sport & leisure trust to manage and operate the Council's sport centres and swimming pools and remit it to the Heads of Community Services, Finance and Asset Management and Law and Administration to produce a detailed report on this matter for future consideration.

Steven Grimmond

Head of Community Services

Tel.: (01592) 413810

Grant Ward

Senior Manager

Sport, Parks & Countryside

Tel.: (01592) 416077

APPENDIX ONE: LIST OF SPORTS AND LEISURE CENTRES

Carnegie Leisure Centre, Dunfermline

Bruce Street Sports Centre, Dunfermline

Cowdenbeath Leisure Centre

Dalgety Bay Sports and Leisure Centre

Beacon Leisure Centre, Burntisland

Bowhill Swimming Pool

Kirkcaldy Swimming Pool

FIPRE, Glenrothes

Levenmouth Swimming Pool & Sports Centre

Cupar Sports Centre

East Sands Leisure Centre, St. Andrews

Waterstone Crook Sports Centre, Newport-on-Tay

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