SUMMARY/PURPOSE

To receive the Blue Paper on the VFM exercise on the future of the crematorium enquiry from the Policy Commission for Safer Communities.

BACKGROUND

To carry out a value for money exercise on the future of the crematorium was a manifesto commitment which the Policy Commission for Safer Communities was tasked with investigating. The purpose of this enquiry was to enable the authority to develop a policy in order to achieve the following outcomes:

· To ensure that cremation facilities are available locally which suit the needs of the island community at a price that is considered fair and reasonable.

· To ensure that a Council strategy is in place that secures the long term future of an island based cremation service.

· To map out a Council approach to delivery of Bereavement Services that demonstrably provides value for money to all stakeholders including the bereaved, funeral directors and faith leaders.

3. This Council has a statutory duty to maintain 10 closed churchyards and like other Councils, discretionary powers to provide cemeteries. Where a Council provides cemeteries it then has a duty to maintain those cemeteries. The Council has a power to establish and administer crematoria if so desired. There are 251 crematoria in the United Kingdom, 193 of these are in Council ownership, 58 are in private ownership. Most privately owned crematoria have been built by the private sector, some crematoria formerly owned and operated by local authorities have been externalised.

4. All crematoria must operate within a strict legal framework. That framework insofar as emissions control is concerned is to be strengthened in 2011/2012. The sponsoring government department for emissions control legislation, the Department for the Environment, Food and Rural Affairs (DEFRA) has stated that quantities of mercury released into the environment from UK crematoria must be reduced. Broadly, this regime will require investment in new technology by cremator operators to reduce emissions, or as an interim, offer crematoria operators an emissions trading option allowing continued release of mercury into the environment if a fee is paid. It will cost approximately £150k per cremator to reduce our emissions to acceptable levels.

As cemeteries become full, particularly in urban areas, income streams reduce and such sites become financial liabilities. When cemeteries are considered by proprietors to be full an application can be submitted to the Home Office to have them declared closed, if successful their upkeep becomes the legal responsibility of the local authority. The local authority will be consulted and will have the opportunity to object if they wish.

Following death, 70% of UK bodies are now cremated. The Council deals with 87% of Island bodies. In excess of 90% of those bodies are cremated. It should be noted that the cost of cremation in most areas is considerably cheaper than burial.

This Council in respect of the crematorium is a monopoly provider. In the event of dissatisfaction with a mainland crematorium because of past experience, the bereaved can realistically purchase future services from another crematorium, often within a short driving distance.

The most recently published price comparisons indicate that the Isle of Wight was the 42^nd most expensive crematoria in the UK for a basic cremation. The basic cost of a cremation at the Isle of Wight Crematorium is currently set at £420. The cost of a cremation generally constitutes 25% of the total cost of a funeral.

9. The broad management principle adopted several years ago has been to set fees and charges at levels that were similar to those set elsewhere in the UK whilst allowing surplus from the crematorium to balance the deficit incurred in providing and maintaining cemeteries.

10. The notion of Bereavement Services as a budget neutral package provided by this Council wherein a surplus or profit generated by the crematorium subsidises cemetery maintenance costs has been tacitly accepted but never formally adopted as policy.

Health experts and population projections suggest that death rates, unless worst fears of pandemic or some other unforeseen circumstance arises, will remain low for another two or three years. Numbers will then increase sharply ‘as the large cohorts born immediately after the Second World War and during the 1960s baby boom begin to reach elderly ages’ (Government Actuary’s Department).

12. Indications are that all crematoria operators will be implementing significant cost increases in the next 3 years to fund investment in technology to satisfy emissions control legislation. Fees have also being increased to meet rising energy prices and a 150% increase in statutory fees payable to medical referees who must formally authorise every cremation.

STRATEGIC CONTEXT

13. Manifesto commitment.

14. Aim High

The Aim High Change Management Plan seeks to:

· ‘Improve the Health and Well Being of Island Communities’ (paragraph 2.3.2). The Council is responsible for measuring the quality of ambient air to ensure that it meets required standards in relation to the concentration of pollutants.

· ‘Create Safer and Stronger Communities’ (paragraph 2.3.3). It is essential that the Council is an exemplar with respect to health and safety issues to ensure conformity from the wider community and maintain credibility on those occasions when the Council has to prosecute offenders on health and safety grounds.

· ‘To be a high performing, cost-effective Council’ (paragraph 2.4.1). The crematorium is currently self-sustaining and generates sufficient surplus revenue to subsidise wider Bereavement Services activities. It is intended that revenue streams will be increased through the application of a more business-like approach, underpinned by a public service ethos. Surplus revenues that are not identified for the improvement of Bereavement Services activities could then be used to improve IWC services generally, helping to keep Council Tax at a level acceptable to the local community.

15. Tourism Development Plan

The TDP aspires to make the island a place of international repute with regard to its ‘greenness’. Attention to emissions control is a significant factor in maintaining the credibility of such aspirations.

CONSULTATION

16. The Commission has consulted widely through formal and informal meetings, public advertisement, iwight.com and written correspondence with:

· Funeral Directors

· Faith Leaders

· Council officers

· Trade Union (Unison)

· Other crematoria operators

· Private consultant – Mr David Holmes

· St Mary’s Hospital

FINANCIAL/BUDGET IMPLICATIONS

17. The estimated cost for the installation of 3 new cremators and abatement of mercury emissions is £900k at today’s prices. This figure will be reduced to approximately £650k if only 2 cremators are replaced and fitted with emissions abatement technology. No budget has yet been identified for this capital investment.

18. In 2005/6 the crematorium made a net contribution to the Council’s budget in excess of £131k.

19. The net cost to the Council in 2005/6 of providing cemeteries and managing closed churchyards was approximately £130k. This cost is currently funded by surplus revenue from the Crematorium. The Combined net budget shortfall for Bereavement Services in 2005/6 was £207k.

20. The disposal of assets to meet capital requirements represents a one-off solution and in the very long-term a calculation would have to be made as to whether year on year surpluses were sufficient to fund the next round of replacement cremators.

LEGAL IMPLICATIONS

20. The Council has a statutory duty to maintain 10 closed churchyards and discretionary powers to provide cemeteries. In the event that the Council provides cemeteries it then has a duty to maintain those cemeteries.

21. If the Council sells all of its cemeteries/externalizes the maintenance function, it still has the ultimate responsibility for the cemeteries maintenance. There is also the potential liability for claims against the Council in the event of accidents or injuries to visitors to the cemeteries.

22. The Council must adhere to strict emissions control legislation.

OPTIONS

i. To accept the recommendations set out in the Blue Paper and adopt them as the basis of policy development:

The Commission are satisfied that the crematorium delivers value for money as an asset that contributes significantly to the Council’s budget annually and which is valued by service users and stakeholders universally. The Commission have concluded that on a stand-alone basis the crematorium would be self-funding and capable of increasing its levels of surplus revenue whilst making provision for any further capital requirements in the future. Members of the Commission therefore recommend that:

1. Cabinet adopt Option E - retain the crematorium as an IWC service and take action to increase revenue.

2. Cabinet instruct the Chief Financial Officer to identify the most efficient means of funding the replacement of a minimum of two cremators incorporating emissions abatement technology in 2011/2012.

3. Cabinet instruct Bereavement Services to prepare a full-form business case for the crematorium based on, but not limited to, the measures identified in subparagraph 6.5.3.

4. The Council acknowledges the need for provision to be made to meet future capital requirements when such requirements are identified to Members by services and that Cabinet instruct Bereavement Services to include a contingency fund for such capital requirements within its crematorium business case.

5. Cabinet instruct Bereavement Services to monitor developments with respect to ‘Promession’ technology and related legislation to assess the viability of such a scheme in future years.

ii. To refer the matter back to the Policy Commission for Safer Communities and request they carry out further work.

iii. To defer any decision on this matter to a future meeting.

iv. To do nothing.

EVALUATION/RISK MANAGEMENT

23. The Council must install abatement technology by 2012. Failure to do so will result in unacceptable levels of mercury being released into the environment and will be contrary to the guidance from Defra resulting in a significant risk to finance and reputation.

24. If the Council should choose to outsource the Crematorium it will need to identify how Bereavement Services activities that are currently funded by surplus revenue will be funded in the future; this statutory obligation will increase in future years as more churchyards become closed.

25. If the Council should choose to outsource the Crematorium it would no longer have any say with respect to the management of the crematorium and would thus be unable to ensure that the Island community was receiving value for money.

26. If the Council should choose to take a more business-like approach to increasing revenue streams this would need to be underpinned by a public service ethos to ensure that the Island community are receiving value for money. If this were not the case this might be viewed as a cynical revenue raising scheme.

27. There is wide-ranging stakeholder and public support for maintaining the crematorium as a Council service.

RECOMMENDATIONS

28. That Cabinet adopt OPTION i, to accept the recommendations set out in the Blue Paper and adopt them as the basis of policy development:

1. Cabinet adopt Option E - retain the crematorium as an IWC service and take action to increase revenue.

3. Cabinet instruct Bereavement Services to prepare a full-form business case for the crematorium based on, but not limited to, the measures identified in subparagraph 6.5.3.

5. Cabinet instruct Bereavement Services to monitor developments with respect to ‘Promession’ technology and related legislation to assess the viability of such a scheme in future years.

BACKGROUND PAPERS

29. Bibliography contained within the Blue Paper, p.15.

APPENDICES

30. Appendix 1 - Policy Commission Blue Paper – VFM exercise to determine the future of the Crematorium (Saf6/05).

Contact Point : Cllr Arthur Taylor, Lead Member for enquiry, Policy Commission for Safer Communities, Tel: 01983 821000 Email: [email protected]

MR ROB OWEN

Head of Consumer Protection

CLLR BARRY ABRAHAM

Cabinet Member for Safer Communities