PAPER F

Purpose : For Decision

REPORT TO THE EXECUTIVE

Date : 29 JANUARY 2003

Title: RYDE MARINA BOWLS CLUB

JOINT REPORT OF THE PORTFOLIO HOLDER FOR RESOURCES AND TOURISM AND LEISURE

IMPLEMENTATION DATE : 10 FEBRUARY 2003

SUMMARY/PURPOSE

1. Members are asked to consider a request from Ryde Marina Bowls Club and Sport England to become the official applicant in a Sports Lottery Application that involves the development of the facilities on the Esplanade.

CONFIDENTIAL/EXEMPT ITEMS

2. None

BACKGROUND

3. The Bowling Greens on Ryde seafront have historically been used as a pay and play facility for users (locals and tourists) and host 2 Bowling Clubs, Ryde Marina Bowls Club and Ryde Ladies Bowls Club (jointly known as the ‘Club’). The current membership of both of these Clubs is approximately 125 people.

4. A decision was made by the Council 4 years ago to devolve the Management of this facility to the Club, which in return has kept all of the income associated with its use (pay and play). This income was to go towards both the up keep of the ageing clubhouse and the development of club’s activities. This relationship has developed over the years without any serious problems, however, the gradual deterioration of the clubhouse has strained the resources of the Club.

5. Two years ago the Club approached the Council regarding the possible development or replacement of the existing clubhouse facilities. Council Officers advised that the best route to attract the necessary funding was the Sports Lottery Fund, administered by Sport England. An intent form was submitted by the Clubs in August 2001 with the agreement that Property Services would manage the project. Initial project costings at this time were estimated at £250,000.

6. A Stage One application went into Sport England at the beginning of 2002. The costs of the project at this time were estimated at £401,615 (attached)

7. with partnership funding of £150,000 coming from SRB, £43,000 from the Club. The Council agreed to a long lease and the use of the land. Sport England were asked for the balance which was set at £248,615 (58%).

8. In the summer of 2002 the Club received the news that it had been awarded 2 grants (£248,615 in principal from Sport England and £150,000 from SRB as part of its plans to develop the seafront areas of Ryde). The Club was then sent through Stage 2 Sports Lottery actions plans to complete and return. These forms focus on the both the capital development of the project and how the club is going to develop and maintain its links to its users.

9. Stage 2 Sports Lottery forms were completed and returned by the Club in June 2002 and Property Services were instructed to tender out the design brief. This process was completed at the end of October 2002. The lowest tender returned to the Council amounted to £482,347, including all fees but excludes VAT of £84,410.

10. Construction costs have increased since August 2001 due to amendments made to the project brief, national increases to tender returns brought about by a buoyant market, increases in construction costs and a shortage of skilled labour.

11. At a meeting with all partners on 19 November 2002 a request was made for the Isle of Wight council to take over the application from the Club. This was on the basis that the Council would be able to recover the VAT paid on the project making it achievable within the level of funding that had been identified for it.

12. In July 2002 the Executive agreed to support the development of the bowls club through granting a long lease to it for both the buildings and the greens. The Club were to take over the maintenance of the greens from the Council which was to pay an annual subsidy to the Club for so doing. This subsidy was set on a reducing sliding scale such that the change in management approach produced, in the medium term a cost saving to the Council of £14,000 per annum at current prices.

13. Unfortunately it has not been possible to conclude this agreed lease arrangement because of the need to transfer, under the TUPE regulations (Transfer of Undertakings (Protection of Employment) 1981) an employee of the Council’s grounds maintenance contractor to the club. The club have no wish to become an employer and would prefer to contract the maintenance of the greens to a suitably experienced company. Therefore whilst the club managing and maintaining the greens on a long term basis is a desirable outcome it may be necessary, to take advantage of the sports lottery grant, that an interim arrangement for just the clubhouse is reached in the first instance.

14. The Club have agreed that it would still be willing to take over the responsibility for the maintenance of the greens on the terms previously agreed at such time as it is legally possible to do so (within the next 12-15 years). This will eventually realize the planned budget savings to the Council. In the meantime the Council will continue to maintain the Greens to a minimum agreed standard that supports the Club’s development plan within agreed budgets.

15. Members are reminded that in 1998 the then Policy Committee was faced with a similar situation when the Council was approached for a loan by a local sports club to enable it to safeguard the club’s sports lottery award. In that instance the Committee agreed to a loan of some £34,000 towards a £640,000 project. The Amenities and Culture Committee also resolved that it “not support requests for loans or grants to be used as matched funding for applications to other funding bodies unless the request is made prior to the application been submitted.”

STRATEGIC CONTEXT

16. The Club’s application to Sport England made reference in the Sport Development Plan to local (Ryde) and Island Strategic plans. Its Sports Development Plan focuses on 3 main development areas: -

· Wider Community Development

· Contribution to Economic investment through playing visitor teams and

· Expansion of its Club Development Programme

17. The Development Plan produced by the Club links to a number of key Corporate Objectives. Raising Achievement for example is addressed in the new coaching and teaching programmes identified in the Plan to new community groups. Specific reference is made in establishing a new junior bowls section on the site. The activities relating to the sport means that it also contributes to the Improving Health and Quality of Life theme identified in the Council’s Corporate Plan. The Club have also estimated that its visitor teams bring nearly £250,000 into Ryde as part of its mainland touring and event programme, therefore making a effective contribution to economic development in the Town.

18. The Club’s activities and emerging Development Plan would be strictly linked to the work programme of the Active Communities Development Officer in Ryde. This is a post the Council currently hosts in partnership with SRB and Sport England, which contributes to the targets and objectives highlighted in the Sports Development Unit Service Plan.

19. The project also links into the emerging development blue print of Ryde Esplanade, a project coordinated by Ryde Development Trust’s through SEEDA and the SRB programme.

CONSULTATION

20. The Club throughout the development of its Stage One Sports Lottery Application (February 2001 – March 2002) consulted widely with a range of its partners. Project development meetings were held with partners, including; Officers from the Isle of Wight Council, Ryde SRB Health and Social Group; to seek partnership funding and community need, Sport England Regional Lottery Officers, Active Communities Officer and the members of all Clubs that use the site.

21. The second phase of consultation involved more detailed meetings between Club officials and project managers from Property Services, who led on the submission of details relating to the Capital Building Programme and its related costings. Officers from the Sports Unit and SRB have assisted in the structure and content of the Club’s Development Plan, updating the Community Groups linked to the Health and Social Group of SRB. Sport England Case Managers were also included in the consultation and development of second stage bid through meetings to work through its “Club Action Plan” forms.

22. Once tenders were returned at the end of October 2002, a meeting was called between all project partners to discuss options for addressing the shortfall in project costs. This meeting took place on November 19^th, where detailed discussions took place to rescue the project. As additional partnership funding was not seen possible. Partners recommended that the only way to save the project was to formally ask the Isle of Wight Council to become the applicant.

23. The results of this consultation however, need careful consideration as becoming the applicant to any external grant giving agencies like Sport England can also bring with it additional risks and liabilities. Including the risk to the Council of the local club not being able to deliver both its Sports Development and financial Business Plans.

24. Sport England agreed at its December 16^th Panel to award Stage 2 approval subject to receipt of amended leases and a confirmation that the Isle of Wight Council has agreed to become the official applicant.

FINANCIAL/BUDGET IMPLICATIONS

25. If the Council were to become the applicant for Lottery funding, VAT on project expenditure would be recoverable although the Director of Finance and information is uncomfortable with the precedent this would set.

26. The above VAT expenditure would count towards the Council’s partial exemption threshold, but on its own would not have any budgetary implications.

27. By becoming the applicant for Lottery funding the Council may have take upon all related grant conditions. If the Club were unable to deliver its Business Plan, encountered financial difficulty and was unable to continue, clawback conditions would apply on the grant of £248,615, for which the Council would be liable. For a project of this size the clawback could be applicable for up to 21 years. It would also need to fund any increase in costs to the building project.

28. The related grant conditions also set out that Sport England (the grant distributor) have first charge on the property to be constructed. At the time of writing, clarification is being sought from Sport England as to whether this would negate the need for the grant to be refunded, if the project was to fail. It is intended that this clarification be reported verbally to the meeting.

29. In addition to the potential clawback condition on Lottery funding, above a similar condition would apply to the allocation of SRB funds, with the monies being potentially repayable to SEEDA.

30. Sport England and the SRB scheme have agreed that it would be content with the club taking the responsibility for the grant liabilities by way of an indemnity agreement with the Council. The Club has indicated that it would not wish to do this.

LEGAL IMPLICATIONS

31. The Council’s powers to become the applicant and support the club are set out below:-

· Section 19 of the Local Government (Miscellaneous Provisions) Act 1976 provides that, “ a local authority may provide, inside or outside its area, such recreational facilities as it thinks fit”.

· Section 19 further provides that a local authority may contribute by way of a grant or loan towards the expenses incurred or to be incurred by any voluntary organisation in providing any recreational facilities which the authority has the power to provide.

· Section 2 of the Local Government Act 2000 provides the Council with the power to do anything which it considers likely to promote the economic, social and/or environmental well-being of its area. The authority must give due regard to the details of the Community Strategy in choosing to exercise this power.

OPTIONS

32. The Executive are being asked to consider:

i) To accept the request of funding partners to become the applicant in this Sports Lottery application, and to submit amended Stage 2 papers to Sport England.

ii) For the Bowls Club to accept all liabilities contained within the award conditions of Sport England and SRB and also any additional costs arising out of the building contract.

iii) The liabilities of the award conditions are shared between the Club and the Council.

iv) The Council maintaining the two greens to an agreed minimum performance standard until such time as it is possible to transfer this responsibility to the Club under the terms previously agreed.

v) Not to become the applicant.

EVALUATION/RISK MANAGEMENT

33. The Club currently has operational responsibility for the site. If the project was not to progress through Stage two, the Club has indicated that it may consider handing back this role to the Council. If this were the case the Council would need to review urgently the current state of the existing building. Financial implications would include ongoing maintenance of the Clubhouse and staffing of the greens for all users.

34. As the applicant the Council would have to find the extra financial resource to cover any cost increases if the capital costs were to increase. Tender prices were set until the end of 2002. There is a possibility they may rise once the contract is awarded.

35. The Club has a very vital role to play in delivering the outputs relating to the sports development plan. However, as a voluntary organization it will always be a risk long term for them identify their capacity to deliver the financial and sports related objectives related to this project, as leading members may leave the Club and/or membership figures may reduce

36. If the Council supports the project, the building programme would impact on a major part of the bowling season (May – August) through the loss of one bowling green. This may impact on the Club’s Business Plan.

37. One of the key liabilities of becoming the applicant relates directly to the funding conditions attached to each project. Sport England Award Conditions clearly state that it can “Clawback” from the applicant any grant issued over a 21 year period if the applicant fails to deliver any part of the project objectives or in this case if the Club associated with the project:-

• Ceased to operate for any reason or becomes insolvent, or is declared bankrupt, or is placed into receivership.
• There is evidence of mismanagement or budgetary control within the organisation (Club)
• In the reasonable opinion of Sport England the organisation (Club) fails to apply any part of the award for its intended purpose.

38. The risks are therefore very high for the applicant (The Council) as it relies heavily on a third party’s (Ryde Marina Bowls Club) long term stability and structure to deliver its objectives, which if failed, could result in the Council having financial responsibility for the whole site. Unless the third party accepted full or shared responsibility for these liabilities.

39. This would set a clear precedent on other Clubs and organisations planning to develop there facilities on Council owned land as their could be an expectation that the council would support every project on its land by becoming the applicant and therefore saving the VAT on project costs.

RECOMMENDATIONS

That options (i), (ii) and (iv) be approved.

BACKGROUND PAPERS

Ryde Marina Bowls Club File (Some items confidential)

Sport England Award Conditions

Contact Point : LEE MATTHEWS, Sport & Recreation Manager ( 823818

[email protected]

DAVID PETTITT Strategic Director Education and Community Development

R R BARRY Portfolio Holder for Resources M A JARMAN Portfolio Holder for Tourism and Leisure