COMMITTEE: Policy Commission for
Safer Communities
DATE: 3
November 2005
SUBJECT: The Future of the
Crematorium (Saf 6/05)
REPORT OF: Head of Consumer
Protection
Summary
The Safer Communities Commission has initiated a value for money exercise to determine the future management of the crematorium. This report is directed at providing evidence and information to the Commission to help guide the exercise.
Background
1. The Isle of Wight Crematorium was built in 1961. In the first year of operation there were 308 cremations. Business volumes have increased considerably in the intervening period; ending March 2005 there were 1382 cremations on the Island. Approximately 91% of island deaths result in cremation.
2. In 1995 ownership of and responsibility for the operation of the crematorium passed to the then new unitary authority, the Isle of Wight Council. In 1997 three new cremators were installed. The Council has a cremator maintenance contract to minimise the likelihood of disruption to operational activity. It is anticipated that these cremators will need to be replaced in 2012. At the same time the Council expects major new emissions control legislation directed at environmental improvements to be implemented.
3. The Council employs a small team of officers in Bereavement Services (5.5 FTE) who support a Bereavement Services Manager reporting to the Head of Consumer Protection. This team manage and oversee all cremations on the island, and burials in Council owned cemeteries. The Council owns 12 cemeteries and has a legal duty to maintain a further 10 closed churchyards.
4. The Council has a statutory duty to provide and regulate cemeteries. The Council has a power to establish and administer crematoria where desired.
5. There are currently 261 crematoria in the UK, 207 of these are in Council ownership, and the remaining 54 are in private ownership.
6. A financial overview for Bereavement Services demonstrates that if deaths on the island follow the established pattern consistent with figures between 1999/2000 – 2003/2004 a net surplus of approximately £63k will result. (There is a caveat however, in that in 2004/5 the number of deaths on the island was approximately 10% fewer than in each of the previous 4 years. The 2005/6 figure at the half year point is in line with 2004/5 rather than earlier years.)
After controllable and non-controllable expenditure is taken into account the crematorium is forecast to make a surplus of £259k in the current year. Cemeteries and closed churchyards are forecast to make a loss of £196k. A contributing factor to this loss is the cost of the grounds maintenance contract; £250k in 2005/6. The contract runs until December 2007.
7. Modest surpluses in the Bereavement Services budget in some years have been carried forward in a contingency fund to support the cost of cremator replacement. The Bereavement Services reserves balance stands at £45k.
8. Estimates have been obtained to determine the likely cost of new cremators in 2012, at today’s prices. The figure obtained is £450k. New emissions control equipment would cost a further £450k.
9. In 1996/7 the Council commissioned consultants to market the crematorium on a limited tender basis. Outline bids were obtained from 4 companies linked to broad business terms capable of variation. At that time, and as we now know the Council retained ownership of the crematorium. Consultants have again been approached and advice sought to support this current exercise. Formal instructions have not been given to consultants at this stage.
10. Several commissioners recently visited the crematorium and Council cemeteries. The Council is custodian for a variety of buildings in its cemeteries. These assets vary in condition and vary in usage. In the past assets have been released, for example cemetery lodges have been sold. Officers regularly review options and recommend disposal of assets that can be demonstrated to be “surplus to requirements”.
Issues for Possible Consideration
1. In recent years the balance sheet for Bereavement Services has been broadly budget neutral. A crematorium surplus covers a cemeteries and closed churchyards deficit.
2. The crematorium is a high value capital asset but up to £1m of capital expenditure will need to be found in about 7 years time if the crematorium remains in Council ownership.
3. The contingency fund would be enhanced through above inflation increases beginning in 2006/7. The annual income target for Bereavement Services is £800k. A 1% above inflation fees and charges increase will therefore generate £8k. The fund would be further enhanced if capital receipts from future Bereavement Services asset disposals were in part ring-fenced.
4. Should operation of a crematorium be viewed as core business of this Council?
5. The concept of a Bereavement Services Trust has been briefly considered in the past. A trust could be custodian and or operator of Bereavement Services assets on a not for profit basis. No substantive work has been commissioned to develop this concept.
Contact Details:
Rob Owen
Head of Consumer Protection
Tel 01983 823388
Email: [email protected]