PAPER D3

 

 

                                                                                                              Purpose : For Decision

                        REPORT TO THE EXECUTIVE

 

Date :              19 NOVEMBER  2002

 

Title :               WEST WIGHT SPORTS CENTRE TRUST

                       

REPORT OF THE PORTFOLIO HOLDER FOR RESOURCES                                                  

                                                                        IMPLENTATION DATE: 29 NOVEMBER 2002

 

 

 


            SUMMARY/PURPOSE

 

1.         Members are asked to consider a formal request from West Wight Sports Centre Trust for additional funding to operate its Sports and Leisure facilities.

 

            BACKGROUND

 

2.         West Wight Swimming Pool has been managed and operated by a Trust for a number of years. In 1997 the Trust in Partnership with Totland Parish and Isle of Wight Council submitted an application to Sport England to expand its existing facilities (swimming pool and café). The following year Sport England announced its support for the application to improve and expand the facilities at the Centre, by awarding the Island’s largest Sports Lottery Grant of £1.8m.The facilities developed include a new dry side sports hall, fitness facilities, new café and improved swimming pool changing facilities.

 

3.         West Wight Sports Centre is the only public sport/leisure facility in the area. It is trying to develop a more strategic role in community/sports development by working in partnership to help deliver some of the key themes emerging from the Island’s Community Strategy and the Council’s Corporate Plan. 

 

4.         In its original business plan to Sport England the Trust highlighted its desire to financially manage the facilities within its existing annual subsidy from the Isle of Wight Council, a point also reinforced by your Officers at the time of application.

 

5.         The Trust are currently operating the new facilities through the second full year of its business plan, and although very well supported by the local community is finding it hard to match the projections set in its original plan to Sport England.

 

6.         The Trust was forced to use its reserves (of £30,000) in 2001/02 to balance its books at the end of the financial year. The lack of a financial buffer along with a continuing downward trend in some of the services provided (Café) has resulted in a severe cash flow problem for the Centre. Some negotiations have taken place with its creditors to give it some breathing space, however, the Council has formally been contacted to help address this problem. The request highlights that if no support is forthcoming the Centre may have to close.

 

            STRATEGIC CONTEXT

 

  1. In its period of operation to date the West Wight Sports Centre has developed in partnership some key service functions to the local community, contributing effectively to the new Corporate aims of both the Council and the themes highlighted in Island Futures. The Trust actively work with local partners to deliver some of the themes and aims highlighted in these key strategic documents. Current Trust activities link directly to:-

 

 

Examples of some of these services and linkages are listed below: -

           

·        The Sport Centre currently supports the development of the Physical Education Curriculum by offering the facilities at no cost to schools (sports hall only). West Wight Middle School for example currently uses the site 16 hours per week.

 

·        The Centre has developed a GP referral scheme with the local Health Authority. Funded in partnership with the Healthy Living bid the Centre has already supported 35 local residents through its programme with a target of 300 during its 3-year project life span.

 

·        The Centre has become a focal point for community organisations that use the Centre directly to support its local services (WI, Age concern and Farmers Market are examples).

 

·        The Sports Centre is now developing into a key area for Sports Development. Supporting the development of local sports clubs, the Centre management has worked with the authority’s Sports Unit on developing local people to help organise and develop local activities, which have been identified as an area of need by the local community. The Centre also promotes an active summer scheme for young people.

 

·        The Centre attracts nearly 100,000 users per year to its facilities from all aspects of the local community and is key strategic partner in the development of the Island’s Sport Action Zone application.

 

            CONSULTATION

 

8.         In March 2002 Trustees met with Members and Officers from the Council to discuss the Centres first year’s end of year financial statement. In the centre’s first years trading it had developed a deficit of £30,000, a figure that had to be balanced from the Trust’s reserves. This trend has continued during this financial year with an estimated budget at year end being £30,000 in deficit.

 

9.         To help the Trust identify both improvement and efficiency areas it was recommended that an external audit of the sports centre operational issues be carried out to help plan future service delivery within the available budget. The Council therefore funded a consultant to carry out a “snap shot” review of the Centre. The consultant’s report was presented to the Trust in June 2002 after they had visited the Centre to speak to both staff and Trustees. A review of the Sport England lottery submission was also undertaken.

 

10.       The Consultant concluded that the Centre is performing relatively well and provides a good service to its customers. However, it highlighted a number of opportunities to improve the financial performance of the facilities.

 

11.       The Management and Trustees of the Centre have taken these recommendations on board and amended some of its operational areas to encompass  the points identified.  The Trust have also developed as recommended a 5 year strategic/business plan to help resolve the current financial trends. Actions to date include: -

 

·        Commitment to outsource the Cafeteria to an external contractor, which is currently a strain on budgets.

 

·        To monitor, challenge and review services and budgets of the Centre on a monthly basis, using improved financial information.

·        To increase income levels on some of the services it provides.

·        To focus the Centre as a strategic partner in the delivery of key themes identified by organisations such as the Isle of Wight Council.

·        Committed Trust reserves to address financial shortfall and start to develop Strategic Plan.

 

12.       Although the Trust have committed to changing its operational procedures, some of these recommendations will take time to impact on the current financial climate of the Trust.  For example the Cafeteria will take at least 6 months to externalise with the impact on the overall budget not being clear until the middle of the next financial year.  

 

            FINANCIAL/BUDGET IMPLICATIONS

 

13.       The Council currently supports the Centre with an annual subsidy of £65,070 pa. Officers are currently developing a new Service Level Agreement with the Trust that is inline with other agreements to Leisure Trusts. This new Agreement would be the working document between the Council and the Trust and would monitor both financial and operational performance in all service areas. The document would also help identify future subsidy levels and links to Corporate objectives.

 

14.       In the absence at this stage of a costed business plan it is impossible to comment on the ability of the Trust to repay any advance of next year’s subsidy, so for budgeting purposes it would be prudent to assume that this would be a charge on the current year’s budget. It certainly seems unlikely that a significant surplus, if any could be generated in 2003-04.

 

            LEGAL IMPLICATIONS

 

15.      The power to incur expenditure on recreational facilities is contained within Section 19 Local Government (Miscellaneous Provisions) Act 1976.  The trust hold a 125 year lease of the building with covenants to pay rent, maintain and to undertake building works. A sub lease returns part of the premises to the council for occupation as a youth centre. If the covenants are breached or if the trust (which is a company limited by guarantee) goes into liquidation the lease will be forfeit.

 

            OPTIONS

 

16.      1(a)      To bring forward an advance payment of £30,000 from next year’s subsidy (2003/04) of £65,070 subject to receipt of a costed business plan that meets the approval of the Strategic Director of Finance and Information.

 

1(b)     To review the annual subsidy levels of the Centre when the Cafeteria has been externalised, a full Service Level Agreement has been finalised and a structured monitoring and performance management process put into place.

 

2.         Not to support the Trust’s request for additional funding

 

 

EVALUATION/RISK MANAGEMENT

 

17.             If the Trust can no longer continue to trade and operate the Council is under existing obligations liable to take over and directly manage the facilities. The level and range of facilities determined by the Council may be reduced and therefore impact on the quality of life of the local community.

 

18.             The Council does not know the level of liabilities relating to the management of these facilities at this time if a decision to take over the facilities was made.

 

19.             If the Council increased its current level of support to the Trust then a comprehensive monitoring structure would be established to ensure the deliverability of the Trust’s Strategic Plan. This would be linked to the funding agreement between the two organisations and signed off by the Finance and Business Services.

 

RECOMMENDATIONS

 

Option 1(a) and 1(b)

 

BACKGROUND PAPERS

 

20.      West Wight Sports Centre Operational Review – PMP consultants

West Wight Sports Centre Trust Business Plan “Connecting With Communities”

West Wight Sports Centre File

 

Contact Point:  Lee Matthews Tel : 823818 [email protected]

 

DAVID PETTITT

Strategic Director

Education and Community Development

 

R R  BARRY

Portfolio Holder for Resources