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Waverley Borough Council Committee System - Committee Document

Meeting of the Executive held on 10/07/2007
Minutes



Executive 39
10.07.07

WAVERLEY BOROUGH COUNCIL
MINUTES OF THE MEETING OF THE EXECUTIVE – 10TH JULY 2007

SUBMITTED TO THE COUNCIL MEETING – 17TH JULY 2007

(To be read in conjunction with the Agenda for the Meeting)

Councillors:
*Cllr M H W Band*Cllr D J Munro
*Cllr B A Ellis*Cllr S N Reynolds
*Cllr Mrs P M Frost*Cllr J R Sandy
Cllr R J Gates*Cllr R J Steel
Cllr D C Inman *Cllr A E B Taylor-Smith
* Present

Cllr K T Reed was in attendance and spoke on Agenda Items 21 and 22
Cllr Mrs D James was in attendance and spoke on Agenda Items 8, 13, 14, 15.2, 19, 22 and 30
Cllr B Morgan was in attendance and spoke on Agenda Items 9 and 21.
Cllr V Duckett was also in attendance.

32. MINUTES (Agenda Item 2)

The Minutes of the Meeting of the Executive held on 12th June 2007 were confirmed and signed.

33. APOLOGIES FOR ABSENCE (Agenda Item 3)

Apologies for Absence were received from Councillors Gates and Inman.

34. DISCLOSURES OF INTEREST (Agenda Item 4)

Cllr Morgan declared a personal interest in Agenda Item 21 as his wife was the former Chief Executive for Waverley Borough Council.

Mrs M Orton declared a personal and prejudicial interest in Agenda Item 21 as the current Managing Director for Waverley Borough Council.
PART I - RECOMMENDATIONS TO THE COUNCIL

35. LEISURE PROCUREMENT STRATEGY IMPLEMENTATION (Agenda Item 8; Appendix C)
35.1 The Council currently operates five leisure centres that, between them, provide a wide range of facilities. These are managed under separate contracts by two private sector leisure management operators. The centres have differing contractual terms and are in various states of condition. These arrangements have arisen historically as a result of Compulsory Competitive Tendering and the takeover of two of the facilities from external trusts.

35.2 Given the significant cost implications of providing good quality leisure facilities and the identified need to carry out major refurbishments of the facilities, the Council took the decision in April 2006 to consolidate the leisure management contracts into a single contract by July 2008 and to undertake a review of leisure centre provision with the formation of a long term Leisure Centre Procurement Strategy. The Strategy focused on:

the management of leisure facilities in the future;
the level of leisure facility provision that should be provided in the future; and
procurement issues associated with management and facility options.

35.3 At its meeting on 12 December 2006, the Council adopted the recommendations set out in the Leisure Facilities Strategy, which was developed with specialist leisure consultants from Capita Symonds, and resolved to instruct officers to start developing detailed proposals for facility options for Waverley’s five leisure centres with DCL.

35.4 It was agreed that:
The contract should be for a period of 15 years, commencing in July 2008 or before if contract terms could be negotiated.
Subject to the Council approval, the procurement should be negotiated on the basis of a Design, Build, Operate and Maintain (DBOM) structure.
The Council’s Contract Procedure Rules be waived to allow the Director of Environment and Leisure, in conjunction with the Director of Finance and the Solicitor to the Council, to conduct sole negotiations with DCL and work up draft contract terms if deemed acceptable.

35.5 Officers were instructed to demonstrate that these solo negotiations achieve good value for money by undertaking a benchmarking exercise of all the proposals, to include references to DLO’s Charitable Trusts and the private sector.

35.6 At its meeting on 12th June 2007 the Executive considered the current position on the Godalming Rugby Club talks and in view of the lack of progress and increased risk, instructed officers to focus resources on progressing discussions with DCL to work up proposals to develop and operate improved leisure facilities in Godalming. This report therefore does not include any proposals on the option to provide new facilities in Godalming in conjunction with Guildford Rugby Club and a commercial operator. If Members agree to enter into a contract with DCL for the Godalming facility, this will bring a close to the talks with the Rugby Club and the commercial operator.

35.7 This strategy aims to deal with the long-term management and investment proposals for the Council’s leisure centres over the next 15 years. This is the first time the Council has taken an overall strategic assessment and proactive approach to the asset management of these facilities. The Leisure Facilities Strategy should give the Council a greater degree of certainty about the longer term financial planning for these leisure services. The Council is likely to hold another major review of the strategy towards the end of the contract to allow sufficient time to identify subsequent service and procurement requirements.

35.8 The scope of the leisure contract covers the management of the Council’s five leisure centres, which are:

Farnham Sports Centre
Cranleigh Leisure Centre
The Herons, Haslemere
The Edge Sports Centre, Haslemere
Godalming Leisure Centre.

35.9 Following approval from Members, the Council has taken a flexible approach to the procurement of its preferred partner to manage these facilities through a solo negotiation process with DCL, who currently manage the facilities at Farnham, Haslemere and Godalming. There are a range of benefits associated with this route of procurement, which are set out below and formed the basis of the Council’s decision. The key benefits include:
Continuing relationship with existing management contractor.
Continuity of service for users.
Ability to negotiate with contractor from a strong position (DC keen to operate all facilities).
Opportunity to establish longer term relationship with trusted partner.
Less expensive process in terms of procurement costs.
Open Book approach where WBC can interrogate in detail the submission
figures and negotiate to gain best advantage.
Possibly reduced tender price from contractors due to lower risk.
More flexibility than other options in terms of negotiating timescales for
implementation and levels of investment over the term of the contract.

35.10 Through the partnership, DCL will:

Contribute to delivering the Council’s priorities for sport and community development.
35.11 The Council expects DCL to have some degree of flexibility to operate the facilities commercially, whilst continuing to deliver certain targeted requirements such as equality of access, pricing structures and the Council’s stated objectives.

35.12 As well as managing the leisure centres, DCL also had to submit the following capital proposals for the five centres:

Basic Refurbishment Programme – these are essential works required at Farnham and Godalming and to which the Council has committed capital funding 35.13 DCL had to submit a management fee proposal for the five leisure centres assuming completion of the basic refurbishment proposals and the additional capital improvement works.

35.14 The solo negotiations have been on the basis of DCL managing the five facilities on behalf of the Council from 1 July 2008 for 15 years, with the opportunity of reviews every five years for some elements of the income and expenditure.

35.15 This report presents the evaluation of DCL’s Best and Final Offer submission. Subject to Members’ recommendation, DCL may be required to refine their proposals, particularly around the scope of the capital works proposed.

35.16 The officers and consultants developed a matrix to evaluate DCL’s submission which covered the following areas:

Financial Criteria (50% Overall Weighting)
a. financially sustainability of DCL’s proposals
b. demonstration of value for money for the Council in DCL’s proposals
c. demonstration that DCL’s proposals represent the market price
35.17 In accordance with Waverley’s Contract Procedure Rules this matrix was approved by the Council’s Management Team in April 2007 and provided the structure for evaluating DCL’s submission.

35.18 It is normal practice for officers to evaluate a contractor’s financial position prior to entering into major contracts. As the Council is proposing to enter into a 15-year contract with DCL it is critical that their financial position is robust. To review and understand this, the following exercises were undertaken in parallel to the detailed evaluation of DCL’s submission:

Assessment of DCL’s financial strength through a review of their accounts for the past three financial years.
Comparison of DCL’s financial strength with other leisure management contractors.
Review of DCL’s surety proposals (performance bond).

35.19 The initial review of the financial standing was undertaken by the Council in January 2007, and updated in June 2007.

35.20 The results of this second analysis showed that the financial standing of DCL is still good (as at 31 March 2006). However, the results overall are slightly worse than those for 2005. DCL’s draft accounts for the year ended 31st March 2007 show an improved position. Officers will keep monitoring the financial position of DCL and its parent company during the negotiation of contract terms and throughout the period of the contract.

35.21 Officers comparied DCL’s financial strength with other similar leisure management contractors to gain an understanding of DCL’s relative stability in the leisure market. This Comparison was undertaken with:


Leisure Connection
35.22 The first three of these are the three other biggest private leisure contractors in the Country and Greenwich Leisure is the largest not-for-profit trust managing public leisure facilities.

35.23 The review of the four companies usedan industry standard financial report and covered, amongst other things, the following areas:

balance sheet strength
profitability
risk
35.24 The matrix used to undertake the evaluation was based on the one developed for pre-qualification questionnaire assessment in the standard leisure contract procurement documentation. Detailed results can be found in (Exempt) Annexe 2. In summary, the overall results are as follows:

DCL – 70% rating against specified indices
Parkwood Leisure – 70% rating
SLM – 70% rating
Leisure Connection – 41% rating
Greenwich Leisure – 33%.rating

35.24 These results reflect the outcome of the earlier evaluation of DCL’s financial stability and show that it is one of the strongest leisure management contractors in the market. This should give the Council comfort that, based on current financial performance, DCL is an appropriate company with which to contract for 15 years.

35.25 With any contract of this value, length, duration and profile, the Council would normally require there to be a performance bond, or alternatively, a parent company guarantee (if appropriate). The purpose of such a form of surety is to pay for any additional costs, up to the value of the Bond, of ensuring the continued provision of the services delivered under the contract, should DCL cease to trade (for whatever cause but most obviously the company being placed in liquidation).

35.26 Contract Procedure Rules state that financial security (surety) shall be sought unless the Director of Finance is satisfied that, upon completion of a risk assessment, there is no need to have a bond (or other form of surety). The form of bond must meet the requirements of the Solicitor to the Council.

35.27 Officers have agreed that, as service continuity is critical in this contract, a bond should be obtained from DCL to cover the costs that Waverley would incur should the company cease to trade. It is envisaged that such an eventuality would be overcome through appointment of an interim manager (whether that be an individual, company or other form of organisation) until a new long-term contractor can be appointed.

35.28 The costs will need to be quantified over the coming months up to finalisation of contract terms and conditions. Officers would negotiate on the form and content of the bond to ensure that the necessary financial safeguards were in place.

35.29 The Council has agreed that the preferred management option is a commercial trust operation. This method of operating the leisure facilities helps the operator to focus on the community-based facilities by separating the profit-making part of the business. One financial benefit of that arrangement over the more usual commercial operation is the potential to avoid a large proportion of NNDR costs, which trust status makes possible. A commercial trust operation is not eligible for mandatory NNDR relief but Waverley’s current policy enables certain types of community organisations to receive up to 80% discretionary NNDR relief (part of which Waverley bears). Any proposed trust model would have to satisfy both the legislative requirements and Waverley’s policy objectives in order to receive discretionary NNDR relief. Waverley will be reviewing its policy in the Autumn and, as neighbouring authorities have done, Members will be asked to consider extending the policy to cover the community-focussed model proposed to operate the Council’s five leisure facilities.

35.30 None of the costs reported to Members take account of any NNDR savings as they cannot be guaranteed in the long-term. As more and more local authorities adopt this model, the Government could change the legislation in the future to prevent them from benefiting from these savings. The current level of NNDR for the five centres is 349,000 per annum, which the leisure operator pays and passes on to the Council as part of the management fee. If this saving opportunity is withdrawn, the Council would need to revert to paying DCL the higher management fee to cover the full NNDR cost. If discretionary rate relief was granted for all five of Waverley’s leisure facilities, the Council could save up to 200,000 per annum. Whilst these savings would reduce the cost of the leisure contract in the short-term, the saving cannot be guaranteed in the future.

Financial Analysis - Explanation of Financial Arrangements

35.31 The Council pays the operator a management fee, which is the deficit of expenditure over income of running each leisure centre. This management fee is increased each year by an RPI-based uplift. The current contract requires the operator to take all of the risk for price increases and any legislative changes that have a financial implication.

35.32 The division of responsibilities for maintenance and repair of the facilities is defined in the current contracts with DCL. Broadly, the Council is responsible for the structure of the building and plant and the contractor for internal maintenance, decoration and equipment. The new contracts follow the same division of responsibilities.

35.33 A number of national factors have changed significantly during the life of the current contracts and the fixed management fees have ‘protected’ Waverley from the impact of these factors in recent years. The report to Members in December detailed those known issues that were likely to result in an increased management fee under the new contract and these are summarised below:

- Leisure Market – Competition from private and other public leisure facilities has increased significantly. This has led to the tightening of contract terms and a shift in risk to the client.
- Significant cost increases have had a major impact on leisure providers, particularly for energy, insurance and pensions.
- The age and condition of Waverley’s centres has been a key factor in the decline in the number of users of Waverley’s facilities in recent years, and consequently income. The Council has a relatively small ongoing maintenance budget and has not undertaken major improvements to the centres for many years. Waverley needs to review the way that it plans, finances and delivers its repair and replacement obligations.
35.36 This is a long term, 15-year, contract and the Council needs to ensure that it has achieved a competitive price from DCL through the negotiated route, which gives the Council good value for money and is both profitable and sustainable for the operator. The independent benchmarking is critical in making this assessment (see later in the report).

35.37 Generally, the operator will take the Business Plan risk over the period of the contract. However, recognising the need for a sustainable contract and the fact that there are many unforeseen factors that could impact on the business plan during a 15-year period which are outside of the control of the Council and the operator, it is proposed to have 5-yearly price reviews included in the contract. This will enable either party to realign certain external, unforeseeable elements of the management fee. The Executive stressed the need for this flexibility in the contract to respond to a whole range of changes in the leisure field over the next 15 years.

35.38 Currently, Waverley has an income share agreement for the Farnham and Herons contracts. Officers have negotiated a profit-share arrangement under the new draft contract terms, which means that the Council will benefit from both improved income position and from DCL achieving cost efficiencies. This requirement is coupled with the condition that DCL fix the level of support costs upfront in their business plan. The profit share will be activated if DCL exceed an agreed profit level included in the business plan. This will trigger a 50/50 split of any additional profit. No allowance has been made for profit share in the comparisons included in this report as it cannot be guaranteed.

35.39 It is important to Waverley for planning purposes and setting the annual council tax that the costs of its large contracts do not cause major fluctuations in the revenue budget each year. Officers have worked with DCL to ‘smooth’ their management fees as much as possible over the contract. Officers intend to negotiate a payment profile, which pays the operator a fixed amount based on the year 1 to 5 average figure in each of the first 5 years.

35.40 As this contract is still in the process of negotiation, it is prudent that detailed financial information remained exempt is set out in the (Exempt) Annexe 1 to this report.
35.41 The report to Council in December 2006 alerted Members to the fact that the current annual capital budget of 105,000 is insufficient to meet Waverley’s landlord obligations for the leisure centres in the medium to long term. In response, an amount of 100,000 a year was identified as an additional future pressure within the Medium Term Financial Strategy. The funding issue identified in (Exempt) Annexe 1 also applies to this amount.

35.42 (Exempt) Annexe 4 shows the Council’s estimated repairs, replacement and maintenance requirements over the 15-year contract period. The table shows that the average annual provision required is 200,000, including estimated capitalised staff costs. The Annexe also shows that the peaks of expenditure fall in the latter years of the contract. Waverley needs to make proper provision for these works and officers proposed that a contribution of 200,000 is made each year to a leisure centre repairs and renewals fund which will be used to fund Waverley’s schedules of work in the capital programme over the next fifteen years. This would reduce the annual contributions from the General Fund to the Revenue Reserve Fund by 105,000, thus making an additional annual charge to the General Fund of 95,000. However, Members felt that this needed further justification and investigation of how it might be funded.

35.43 As part of a major leisure management contractor procurement, it is best practice for the Council to undertake a benchmarking exercise of the business plans provided by all bidders to ensure that they represent value for money. As Waverley is following a solo negotiation route in this instance, this benchmarking process assumes greater importance because the Council does not have a range of submissions to compare.

35.44 The benchmarking analysis was undertaken by the Council’s leisure procurement advisors, Capita Symonds. A range of key performance indicators (KPIs) were calculated for the Council’s leisure centres and data was used from Trusts and Direct Service Organisations (DSO’s) as part of the benchmarking comparison. Three sets of KPIs were calculated for each facility based on the following:

current financial performance of the centres
35.45 These KPIs were then compared to national benchmarks to ascertain whether DCL’s proposals represented good value. These national benchmarks came from two sources:

Sport England’s national benchmarks for leisure centre performance
Capita Symonds’ operational database of leisure centre performance.

35.45 Sport England’s benchmarks are based on a survey that was carried out in 1999-2000 and, therefore, are somewhat dated. However, Capita Symonds maintains its operational database continuously and, therefore, comparison with these benchmarks was accorded greater importance.

35.46 Capita Symonds has produced a detailed report of the results of its benchmarking analysis and this can be found in (Exempt) Annexe 2.

35.47 Overall, DCL’s operational proposals represent good value for the Council and will bring together all of the Council’s facilities under one management. There are a few areas where projected performance is relatively prudent, mainly reflecting the existing performance level of the facilities in question. However, DCL has proposed an improvement in performance and income generation in most cases and if the centres perform substantially better than projected, the Council will benefit through the profit share mechanism.

35.48 As outlined in the introduction, the Council’s requirements for capital works was as follows:

Basic Refurbishment Programme
Additional Capital Improvement Works

35.48 In terms of the Additional Capital Improvement Works, as part of the Leisure Facility Strategy work, the Council developed a list of preferred requirements that was approved by Members.

35.49 DCL was required to provide cost estimates for these requirements in their submission so that the Council can undertake an affordability analysis prior to confirming its commitment to implement all or part of these schemes as part of the contract. In addition, they were required to present any additional proposals that they thought would be of benefit to the Council and Customers. Annexe 7 summarises the Council’s capital improvement requirements and the additional items included in DCL’s proposals. An initial analysis of DCL’s capital proposals was undertaken by the Council’s technical advisors, Michael Edwards Associates and Scott Wilson. In overall terms, subject to the adjustments listed below, the costs and outline drawings appear realistic and will form a satisfactory basis to progress negotiations. Exempt Annexe 5 includes adjustments to DCL's figures as follows:

Planning & Building Control fees
Works not included in figures as noted

35.50 In order to take the capital proposals forward, MEA and Scott Wilson recommend the following actions:

finalise brief for scope of works to each centre (to be dictated by affordability assumptions)
meet with DCL design and cost consultants to clarify design, layouts and cost issues
consultation with the planners to confirm acceptability of proposals
consultation with Building Control with regard to Part L, DDA, etc
detailed review of overall programme of implementation
confirm extent of Fixtures, Fittings and Equipment and specialist services
finalise budget estimates for refurbishment and capital improvement works
agree strategy and method statement to maintain service at the centres operational during works.

35.50 A comprehensive summary and evaluation of the DCL submission in respect of the service to be provided in the leisure centres is provided in Annexe 8. DCL is a proven management operator of local authority leisure centres. They presently operate 122 leisure facilities on behalf of 30 different local authorities and have actively been involved in the management of Waverley’s leisure centres for over eleven years. Besides the content of their submission, this relationship and the Council’s experiences of DCL have helped to put into context, and shape our understanding of, the proposals submitted by DCL.

35.51 Although there is some further work required with DCL in respect of producing method statements and performance standards for elements of their proposals, on the whole, every key heading of the evaluation process scored well in terms of the delivery of the service.

35.52 The key features of DCL’s submission include:


The provision for a 10 hours per week Disability Sports Coordinator based at The Edge Leisure Centre with the responsibility of promoting sports activities for people with disabilities (Additional 5,000 per annum cost to contract).
The appointment of a Facilities Partnership Manager to ensure that the Council’s objectives in terms of key target groups and health promotion are achieved. This postholder will also seek to secure external funding to support the Council deliver additional sports development programmes.
The provision of a standardised IT and Finance system across all the sites to give better financial and management information and improve marketing opportunities and the facility to book activities on line.
The development of links by DCL to national and regional sports and physical activity bodies to enhance the partnership working opportunities in the borough including representation at the Waverley Community Sports Network, Active Surrey, the local Waverley Sports Councils and the Local Strategic Partnership Health and Social Inclusion Sub Group.
The upgrading of the Council’s IN2 scheme, which will allow those members of the local community who qualify for the subsidy, to access more of each leisure centre’s facilities at a 50% discount.
The introduction of the National Benchmarking Service to the new contract. This is a relatively new scheme for leisure centres in the UK to benchmark their facilities and carry out vital annual surveys of centre users, this will improve the Council’s current performance management process in respect of leisure (Additional 20,000 per annum cost to contract).
The inclusion of a valuable, non-user survey, to be carried out every two years to find out what the barriers or reasons for non-participation are. These will not only be carried out in the main towns, but also the main villages in Waverley to get the widest possible understanding of our communities.
The continued development of QUEST, the UK’s national quality accreditation for the sport and leisure industry, in all of the Council’s leisure centres.
Extensive staff, training and induction procedures. DCL has secured Investors in People accreditation. In addition DCL as an organisation has been given approved training centre status by the Royal Life Saving Society.
Covering the transfer of staff and the centre programme at Cranleigh Leisure Centre. This facility is currently the only Council leisure centre in the borough not being operated by DCL and the transition to DCL management will be smooth.
high level of attention to the building maintenance and health and safety management of the council’s leisure centres.
DCL will actively participate in partnership working initiatives and support the Council in all forms of best value and other assessment initiatives. 35.53 The new contract includes a detailed and comprehensive performance management framework, which will enable the Council to monitor closely all aspects of performance against the service specification. This framework will provide the Council with the security that over the period of the contract should DCL under- perform in any aspect, procedures are in place to rectify the issues swiftly and effectively. Whilst giving assurances to the Council the process of monitoring is much more detailed and robust and does require more input from the client than the current system. If members are minded to approve the officer recommendation to introduce this performance management framework it will be necessary to strengthen the client team with a part time (20hours per week) additional monitoring officer post. The annual cost of this will be 20,092 p.a. and is set out in detail in the financial implications section of the report.

35.54 As outlined in the introduction, an evaluation matrix was developed to assess DCL’s submission. It was approved by the Council’s Management Team. A summary of the matrix and the results can be found in Table 9.

Table 9 - Evaluation summary of DCL’s submission
    Category
Sub-criteriaScore
    Financial Criteria (50% Overall Weighting)
Financially sustainability of DCL’s proposals73%
Demonstration of value for money for the Council in DCL’s proposals74%
Demonstration that DCL’s proposals represent the market price75%
Category score74%
Category weighted score37%
Service and Quality Criteria (50% Overall Weighting)Delivery of the Council’s service objectives83%
Demonstration of innovation and service improvements by DCL83%
Demonstration of a high quality of service.79%
Category score81%
Category weighted score40%
Overall score77%

Risk assessment

35.55 A detailed analysis of the key risk associated with the strategy is included in (Exempt) Annexe 9.
35.56 The Leisure Strategy is a major project for Waverley and officers prepared a detailed report which was presented on 19th June at the Environment and Leisure Overview and Scrutiny (ELOS) Committee. This was mainly aimed at bringing new Members up to speed on the subject - all Members were invited to attend the meeting where officers provided an overview of the Leisure Facilities Strategy and explained the key issues.

35.57 The Executive noted the following observations from the Committee:

35.58 The Chairman of ELOS emphasised the Committee’s request for assurances on the solo negotiations and the length of contract in particular. 35.59 The Executive noted the observations from the Committee. Members raised concern about the length of the management contract contract with DCL. They were assured that there were a number of review periods which would allow them to realign the service, if necessary, and to ensure that performance was being maintained.

35.60 The Executive recognised leisure as one of the Council’s key services for people in the Borough and reiterated the Council’s commitment to providing high quality leisure facilities in the Borough which were accessible to all residents and agreed that this should be maintained. 35.61 The Executive

RECOMMENDS that

1. the Council notes that the additional costs indicated in the three year financial strategy will now be required if the Council’s policy to operate the existing five leisure facilities is continued, and recognises the pressure this will place on the revenue budget requiring significant savings if balancing the financial strategy is to be achieved going forward; 2. subject to 1 above the Council reaffirms its policy to operate the existing five leisure facilities; 3. the Council enters into a 15 year management contract with DCL which includes the operation of all five leisure centres commencing 1st July 2008, subject to the satisfactory agreement of detailed contract terms by the Director of Finance, Solicitor to the Council and Director of Environment and Leisure, noting that this decision will bring to a close the parallel discussions with the Guildford Rugby Club and the commercial operator; 4. the management contract includes responsibility for DCL to implement the basic refurbishment works as set out in the contract specification; to be funded from resources currently identified in the capital programme with the additional 1.6 million being met from the 2million earmarked by the Council in February for the implementation of the Leisure Strategy; 5. the additional net cost of 5,000 per annum for the inclusion of a new post of Disability Sports Co-ordinator within the contract be noted; 6. the additional net cost of 20,000 per annum for DCL to undertake the annual National Benchmarking Service audits and customer satisfaction surveys as part of the requirement of the new contract be noted; 7. the appointment of a part time post holder, from 1st April 2008, to establish and implement the performance management duties set out in the contract and to include an amount of 20,000 in the 2008/9 budget, be approved; 8. Future expenditure would be decided by the Council through the annual budget based on need, and the officers would report back on the implications within the financial strategy of different ways of funding this for the future. 9. officers be instructed in conjunction with DCL to investigate and report back on all improvement options focussing on those that could be delivered on at least a cost neutral basis, and for Members to identify which facilities they consider to be the highest priority; 10. officers be instructed to liaise with key stakeholders such as the Town Councils and Cranleigh Parish Council to identify ways in which they may be able to assist in delivering the Leisure Facilities Strategy, including identifying any potential sources of additional funding for the capital proposals; 11. the forthcoming review of the Council’s policy for Discretionary Rate Relief and the potential financial benefits that can be achieved by including Waverley’s leisure centres within the policy be noted; and 12. the recommendation set out in the (Exempt) Annexe 1 be agreed.
36. ‘SAME DAY’ COLLECTION OPTIONS - KERBSIDE REFUSE AND RECYCLING SERVICE (Agenda Item 13; Appendix H)

36.1 The Council entered into a new Waste Management Contract for kerbside collections of refuse and recycling, together with environmental cleaning, on 1st November 2005. Since that time the Council has resolved to achieve an enhancement of recycling by switching to an Alternate Weekly Collection system. The financial savings have been significant. In respect of the re-tendering exercise alone, the contract savings amounted to some 450,000 per annum on an ongoing basis, and the switch to alternate weekly will account for a further reduction of some 650,000 a year after paying for significant set-up costs, also on an ongoing basis, for the life of the current contract which is for a period of 7 years with a further option to renew (exercisable at this Council’s discretion only) for a total period of 14 years.

36.2 Environmentally, there has been a considerable increase in the rate of recycling at 30.63% (excluding garden waste collected for composting) for 2006/07, compared with 22.7% for 2005/06. There was also a reduction in the amount of residual waste collected for disposal.

36.3 However, amongst the issues regularly raised by residents many relate to refuse and recycling collections. This has been evidenced by the results of the most recent General Survey. A significant matter of concern raised with Officers and Members has been the current system of ‘Roll-Forward/Day-Change’ of collections whereby the collection day moves after each bank holiday. This is considered to be difficult to follow and of particular concern when the refuse collection period is extended. Instead of receiving a refuse or recycling collection service on a 14 day basis, the service interval can be as much as 19 days depending on the bank holiday. Your officers have therefore sought to devise collection sequences that would attempt to provide ’Same-Day/Catch-Up’ throughout the year and would be easier to follow at bank holidays.

Possibilities for enhancement

36.4 The possibilities for enhancement fell into two generic sorts: firstly move the date of a bank holiday collection temporarily to another day (options 1 & 2 described below), and secondly offer a four-day collection service (options 3 & 4 described below):

36.5 a) Option 1 36.6 b) Option 2

This option makes use of a combination of bank holiday and Saturday working. Bank holidays are worked, with the exception of Christmas Day, Boxing Day and New Year’s Day, when Saturdays are used for catch-up purposes. This option further reduces inconvenience to householders compared with Option 1 above, but the contractor has indicated that this option would be dependent on reaching a bank holiday working arrangement with staff.

In the same way as with option 1 above, this option could include the approach of implementing a temporary day-change across the service over the Christmas & New Year holiday period, then returning to the original collection day the following week. In this way, not more than one day would need to be added to any households’ collection period with the exception of a small number of households for whom 2 days would need to be added. Officers and the contractor will further examine ways of avoiding this to ensure the maximum would be 1 day.

36.7 c) Option 3

Under this possibility there would be no collection on a bank holiday within a given week but that the other four days of the working week would be extended earlier and later to remove the residual refuse stream and the recyclables within four working days. The working week would not be extended into the Saturday and the consequence would be an earlier start (not always acceptable to all of our residents) and a later finish (not immediately attractive to our operatives).

36.8 d) Option 4

With this option, Waverley would instruct its contractors to operate the residual refuse collection and the recycling service with a four-day week on an ongoing and recurrent basis. This would mean that in any working week the working days would be restricted to four, ordinarily Tuesday, Wednesday, Thursday and Friday. However, in the event of a bank holiday occurring during the week, these days may need to be varied but under any circumstances the refuse and recycling would be removed in the week, during the week, and on a regular basis.

36.9 The contractor has given the four-day working options (option 3 and option 4) consideration and concluded that it would not be possible to complete the work in four days, either in a bank holiday week, or on a permanent basis. This is because of the challenges presented in collecting from five days’ worth of properties in four days, both in terms of vehicle capacity and tipping arrangements. These options are not therefore being pursued further.

Financial Implications

36.10 The financial implications of the two possible options are set out in the (Exempt) Annexe 10 to this report. These costings are indicative at this stage and subject to several assumptions made by the contractor. They do not include any additional tipping costs nor advertising/publicity costs which would also have to come out of the 100,000 if supplementary estimates are to be avoided.

Practical Considerations and Implementation.

36.11 The contractor has indicated that his preference would be Option 1, Saturday Catch-Up. This is because negotiations with staff for the necessary revision to working arrangements are more likely to be successfully concluded on this basis. Veolia have also indicated that a revised collection system can be implemented at Christmas this year, with August bank holiday as the last under the existing ‘Roll-Forward’ system.

36.12 Examples of the ways in which these changes will affect collection sequences were presented at the Executive on 12th June and at the Environment and Leisure Overview and Scrutiny Committee on 19th June.

36.13 Officers are investigating the necessary steps that would need to be taken to implement the change to a ‘Same-Day/Catch-Up’ system. Those that fall within the remit of the contractor are set out in the (Exempt) Annexe.

36.14 Waverley for its part would need to distribute collection calendars to all households. The existing calendars already cover the period of at least up to and including the 2007 August bank holiday. It was therefore already going to be necessary for new calendars to be prepared and distributed after August this year. Some confusion is likely to be caused if we were to distribute replacement information and calendars to implement a revised collection service for August bank holiday. Revisions will be needed to the web-based collection-day finder and the Council’s own Waste Management IT system.

Environment and Leisure Overview and Scrutiny Committee

36.15 The Executive noted that the Committee had discussed the advantages and disadvantages of the options and the principle of a same day collection service. The Portfolio Holder reminded Members of the Manifesto Commitment to introduce a same day collection service. Members were keen to have more background information and it was announced that there would be a Waste Seminar on 5th September at 6.30 p.m. for all Members.

36.16 The Executive noted the following observations from the Committee:

36.17 Generally the Committee supported the introduction of a Same-Day/Catch-Up system, as described in option 1A, i.e. collections normally move forward a day with a Saturday collection to catch up;
the Committee advised the Executive that this option should be easier for the public to understand, and is more robust in coping with any resident missing their revised collection day;
if possible, Members should be involved in reviewing the proposed arrangements for Christmas and New Year 2007;
the Committee welcomed the proposed Member Briefing on the wider issues of waste and agreed it will be helpful for Members to be able to see proposals for improving the service in this wider context;
the Committee welcomed the broader review of the service outlined by the Portfolio Holder, to include the range of materials collected for recycling and where available to develop costings for the proposed improvements for Member consideration;
the Committee welcomed the proposals for improving communications and for measuring improved customer satisfaction; and
the Committee wished to encouraged the Executive and Portfolio Holder to consider ways of involving Members including briefings from specialist advisors and if appropriate, reconvening the Climate Change and Waste Management Special Interest Group.

(Mr Reed and Mr Lovell abstained from the vote).

36.18 The Executive noted the observations from the Environment and Leisure Overview and Scrutiny Committee which were amplified by the Chairman, who explained that some Members had felt strongly that the proposed selective improvements should not be introduced until other options with costings had been considered. The Executive felt that it was important to make early improvements to the service to meet residents concerns in advance of the proposed broader review of the service. It was also agreed that, in making this recommendation, the Council should continually look into ways of promoting waste reduction.

36.19 The Executive

RECOMMENDS that

13. the contract with Veolia Environmental Services be varied or otherwise amended, as legally appropriate, to allow for a ‘Same-Day/Catch-Up’ collection of refuse and recycling throughout the whole of the calendar year, with effect from Christmas 2007, with a preference that such arrangements accord with Option 1 with a roll forward to the following day described in the agenda report; 14. the indicative cost of this option for the current year and the need for inclusion of a commensurate sum in the base revenue budget for future years be noted;

15. the further actions to be taken with the Portfolio Holder’s domain to improve other aspects of the service be noted, to include much improved public information; and

16. officers be instructed to enter into negotiations with Veolia Environmental Services to achieve the improvements in the report.

Background Papers (DoEL)

Recent correspondence, including e-correspondence with Veolia Environmental Services Ltd.

37. PRIVATE SECTOR HOUSING ENFORCEMENT POLICY (Agenda Item 19; Appendix N)

37.1 Waverley Borough Council formally adopted a corporate enforcement policy on 18th February 2003 in order to meet its obligations arising from relevant legislation and the principles of the enforcement concordat. There is a general obligation to ensure that the various statutes are enforced in a proportionate, consistent, targeted and transparent manner.

37.2 Significant changes have been introduced to the Council’s enforcement work in private sector housing by the commencement of the Housing Act 2004, which it is felt will require specific guidance on the Council’s Enforcement Policy.

37.3 This legislation has extended the Council’s range of enforcement activity by

Introducing a new notice procedure for dealing with defects in residential properties under a new system of assessment known as the Housing Health and Safety Rating System (HHSRS). 37.4 A new enforcement policy, specific to private sector housing enforcement work, has been produced to reflect these changes and is attached as Annexe 11. The Executive supported the Private Sector Housing Enforcement Policy and reiterated the importance of Councillors being made aware of enforcement action taking place throughout Council services.

37.5 The Executive

38. RESTRUCTURING: REDESIGNATION OF HEAD OF PAID SERVICE POST (Agenda Item 21; Appendix P)

[During consideration of this item, at 8.55 p.m., it was

38.1 The Executive discussed, in exempt, the issues relating to individual members of staff. Following the deletion of the (former) post of Chief Executive, as approved by the Council at its meeting on April 2006, the Council approved interim management arrangements and accepted the title of Managing Director for the post of head of paid service for Waverley Borough Council. The Council confirmed its acceptance when it approved a revised Scheme of Delegation at the meeting on 18th July 2006.

38.2 The use of the title Managing Director served to emphasize that there was a distinction between the former post of Chief Executive and the new head of paid service role and that the responsibilities had been changed. The use of such a title in local government is not completely exceptional; there are ten such job titles in local authorities in England and Wales for the head of paid service post.

38.3 However, the vast majority of heads of paid service in local government have the title of Chief Executive; the representative body for heads of paid service uses ‘Chief Executive’ in its title, Society of Local Authority Chief Executives (SOLACE) and, similarly, the relevant trade union is called the Association of Local Authority Chief Executives (ALACE). There is, therefore, a risk that the title ‘Managing Director’ could be misinterpreted.

38.4 In discussions with the newly appointed Managing Director and the Leader of the Council, it has been concluded that it would be appropriate to use the title Chief Executive rather than Managing Director for the new post. For the avoidance of doubt, this does not amend, in any way, the responsibilities of the post.

38.5 The Executive supported the redesignation of the post of Head of Paid Service to Chief Executive and

RECOMMENDS that


39. WEBSITE CONTENT MANAGEMENT SYSTEM AND WEBSITE MANAGER (Agenda Item 22; Appendix Q)

39.1 A provision of 75,000 has been included in the 2007/08 IEG Capital Programme for the purchase of a Website Content Management System (WCMS) and the associated website design services.

39.2 The reasons for implementing a WCMS are set out in detail can be summarised as follows:

Central management of the content of the Council’s website;

39.3 A WCMS is the software tool required to deliver the above. Indeed it is impossible to manage a sophisticated, modern website without one. However, it is only a tool. It requires particular website management and editorial skills to make effective use of it and deliver a website that is easy to use, accessible, comprehensive and an efficient channel for service delivery.

39.4 At present the Council’s in-house skills with respect to its website are primarily technical. The current staff resource required to support the website is described in the Exempt Annexe. This resource is wholly within the IT Section and although it has significant skills they are in the areas of software development and support not website management, editorship and design. It will therefore be necessary to recruit somebody with the necessary experience and expertise in these areas.

39.5 It is worth noting that there is a significantly higher than average level of internet and e-mail usage within the population of Waverley and that access to the Council via its website is becoming an increasingly important channel of communication. A recent survey (see annexe 1) showed that 34% of Waverley’s residents had used the Council’s website within the previous year and that e-mails and online forms were second only to the telephone as residents’ preferred method of contacting the Council (27% compared to 40%).
39.6 WBC’s website began life about ten years ago. Created in-house it was initially a simple static site built using standard Microsoft tools and hosted by a local Internet Service Provider.
39.7 In 2002 the website was overhauled to meet the changing expectations of the public and comply with central Government initiatives, in particular categorisation of content, standard methods of website navigation and other e-Government requirements. At this point the website began to take on its current look and feel. However it should be noted that WBC has never used the services of any professional designers to shape the appearance of its website.
39.8 It is difficult to state the precise “size” of WBC’s website as it is comprised of several components but the current statistics for the “static” part of the website (i.e. WBC’s website excluding those pages delivered by Lotus Notes, documents delivered by the Comino image processing system, web-facing applications such as online payments etc.) are as follows:

39.9 The current level of visitor activity on these pages is: 39.10 Although the Council’s website received several accolades in the first few years of the century and was regularly highly placed in the Society of Information Managers’ (SOCITM’s) league of District Council websites it has recently been “slipping down the charts” as other Council websites have overtaken it. Waverley’s website is assessed as a “content plus” site whereas more and more Councils’ sites are being assessed as “transactional” based on a combination of criteria including ease of navigation, accessibility and usability of online forms and other interactive transactions.

39.11 SOCITM also make the point in their most recent annual snapshot of Local Authority websites, “Better Connected 2007”, that “expectations about site standards are rising all the time”.

39.12 Within the past twelve months the following surveys have been undertaken with respect to WBCs website:

39.13 The findings of these surveys are summarised.

39.14 The findings demonstrate that the website is an increasingly significant means of communicating with and delivering services to the residents of Waverley and customers of the Council. They also demonstrate that there are a number of issues that need to be addressed if the full potential of the website is to be realised.

39.15 Nearly all of the criticisms made of the website in the surveys are either managerial, editorial or design issues, i.e. not technical ones. These findings endorse the need for the Council to acquire the necessary skills to improve its website.

39.16 Most Local Authorities, including Waverley’s neighbouring Surrey Authorities, have at least one member of staff charged with the responsibility of promoting, managing and developing the Council’s website. These officers are usually also responsible for the Council’s Intranet and any Extranets (e.g. the Members’ Extranet).

39.17 At present, at Waverley, staff within IT section are responsible for the technical development and support of the website but nobody has overall responsibility for the management, editorial control and design of the content of the website.

39.18 The Executive noted the draft job description of a Website Manager. This demonstrated the range of responsibilities of the post and the variety of skills required of the post holder.

39.19 In order for somebody to be able to fulfil the role of a website manager they will need to have the software tools required to deliver corporate management and editorial control of the content of the website.

39.20 A WCMS not only provides a Website Manager with the necessary software tools to undertake their responsibilities, it also enables service managers to take ownership of the content of their pages on the website and assume responsibility for the quality and of the information published about their services.

39.21 An overview of the functional requirements of a WCMS is given at Annexe 12.

39.22 Your officer have drafted a detailed specification of requirements of a WCMS and propose going out to tender to a restricted list of suppliers with a proven track record for designing websites and providing web content management systems to Local Government.

39.23 The implementation of a WCMS would be a considerable undertaking as it would require the training of approximately 50 officers and the migration of a large volume of information from the existing to the new website plus the associated editing, reformatting and indexing of content. It is therefore desirable that a Website Manager be in post to manage the project and apply their expertise in the development of the Council’s new website.

39.24 A provision of 75,000 has been included in the 2007/08 IEG Capital Programme for the purchase of a Website Content Management System (WCMS) and the associated website design services.

39.25 Details relating to the revenue budget refering to current staffing arrangements are included in the Exempt Annexe 13.

39.26 The services of the Website Manager will be required as soon as possible in order to lead on the project to redesign the website and implement the WCMS.

39.27 This report therefore seeks a supplementary estimate of 18,000 in the current financial year and a consequent net growth commitment of 25,000 in the 2008/09 Revenue budget. Officers, however, will continue to look for offsetting savings.

39.28 Everybody’s expectations of the range and quality of services provided by the Internet are increasing, including those of Waverley’s residents, customers, staff and members. In the private sector websites have become a primary channel for promotion, publicity, communication, information and service delivery. Central Government is requiring Local Government to follow this lead.

39.29 Although Waverley’s website has received many accolades in the past it is now falling behind due to the lack of investment in terms of both staff resources and software tools.

39.30 The Council is also failing to take full advantage of the website’s potential to increase the efficiency of service delivery. The unit costs of filling a form, making a payment, inspecting a planning application etc. online are significantly cheaper than processing those transactions via other channels (face-to-face, over the phone and via the post).

39.31 A Website Manager would be responsible for raising the profile of the website amongst Waverley’s residents and customers and improving the range and quality of services available on its website, thereby delivering efficiencies for the Council and improving services to the public.


39.32 The Executive agreed that it was important that the Council had a system to improve its Website, and an officer to work exclusively on this issue. Accordingly, the Executive

RECOMMENDS that


20. Officers continue to look to find off set savings; and 21. the procurement of a Website Content Management System from the provision of 75,000 in the 2007/08 IEG Capital Programme be authorised.


40. FARNHAM PARK PLAN - RESOURCES FOR IMPLEMENTATION (Agenda Item 12; Appendix G)

40.1 Council adopted the interim Avoidance Strategy for the Thames Basin Heaths in February 2007 and made a commitment to implement the proposed improvements contained in the Farnham Park Restoration Plan by the use of developer receipts.

40.2 The Executive on 12th June 2007 endorsed the Farnham Park Management and Implementation Plan, which details the delivery of the Farnham Park Restoration Plan and Avoidance Strategy as it affects Farnham Park. The report to this meeting set out the financial and staffing implications of these plans.

40.3 The biodiversity and landscape elements of the Farnham Park Management and Implementation Plan will be funded through a combination of environmental grants schemes, capital bids and revenue funding. Waverley funds have been allocated for works to be completed in 2007/08 as follows:-

ItemCapitalRevenueGrant
Extension of cattle grazing5,8002,4653,281
Pond creation3,600
Opening up views of Castle5,500
Restoration of chalk grasslandModify existing grass cutting regime
14,9002,4653,281

40.4 The access, interpretation and management works in the Farnham Park Management and Implementation Plan are also required to qualify the Park as a Suitable Accessible Natural Greenspace (SANGS). The costs are detailed in the Avoidance Strategy (attached at Annexe 14).

40.5 Column A shows the estimated costs, Column B - the capital and revenue allocations already included in the Council’s budget, Column C - the costs that will come from developer contributions through Section 106 agreements and Column D, the timing of the works. The costings include a capital sum that will generate interest to pay for annual revenue costs and capital replacement in perpetuity.

40.6 Natural England requires the improvement works to be carried out before occupation of the new dwellings. Developer contributions will be collected at the time planning applications are approved. Based on previous numbers, it is estimated an average of 180,000 per annum will be generated per year. The timing of money coming in will be linked with the granting of permissions. The Executive was aware of a substantial backlog of applications that have been waiting for the Avoidance Strategy to unblock the moratorium of development within 5 km of the Thames Basin Heaths SPA. The Executive, therefore, considered that contributions received in 2007/08 would be around the average level, even though the Avoidance Strategy has not been available for the full year.

40.7 A cash flow projection for the part of the plan to be funded through the Section 106 Agreements is attached at Annexe 15.

40.8 A new post of full-time ranger would be located in the Park to implement the works and provide public information and education. Natural England regarded the ranger post as playing a key role in public reassurance and to be on hand to deal with issues as they arise as well as managing visitors and monitoring their impact. The part-year cost of the ranger in 2007/2008 is 16,500 and 24,500 in a full-year, as shown in Annexe 1 at Column C. The Executive was satisfied that these costs would be covered by developer contributions and

RECOMMENDS that

PARTS II AND III - MATTERS OF REPORT

Background Papers

Part II – Matters Reported in Detail for the Information of the Council

There were no matters falling within this categories.

Part III – Brief Summaries of Other Matters Dealt With

41. EXECUTIVE FOUR-MONTH ROLLING PROGRAMME (Agenda Item 6; Appendix A)

RESOLVED that the four-month rolling programme of key decisions for Waverley Borough Council be adopted, subject to:

1. the addition of Senior Management Restructuring to the Human Resources Portfolio; 2. the amendment of the item on the Best Value Performance Plan to a quarterly review of the programme; 3. the addition of the Member Development Programme to the Human Resources and Member Development Portfolio;

4. a review of dates for reports; and

5. the Chief Executive to report on the programme looking further forward.

42. EAST STREET - UPDATE/REPORT FROM THE SPECIAL INTEREST GROUP (Agenda Item 7; Appendix B)

43. COMMUNITY PARTNERSHIPS FUND: SOUTH WEST SURREY COUNCIL FOR VOLUNTARY SERVICES and a REVIEW OF THE COMMUNITY PARTNERSHIPS FUND (Agenda Item 9; Appendix D)

RESOLVED that 44. MUSEUM OF FARNHAM GARDEN CLASSROOM (Agenda Item 10; Appendix E)
45. WAVERLEY PLAY STRATEGY AND BIG LOTTERY FUND FOR PLAY (Agenda Item 11; Appendix F)

RESOLVED that



46. DOUBLE-GLAZING PROGRAMME FOR HOUSING REVENUE ACCOUNT PROPERTIES (Agenda Item 14; Appendix I) RESOLVED that

47. PLANNING SERVICES

47.1 Further Improvements to the Planning Service (Agenda Item 15.1; Appendix J.1)

RESOLVED that


47.2 Charging for Planning Services (Agenda Item 15.2; Appendix J.2)

RESOLVED that
48. GENERAL HOUSEHOLDS AND BENEFITS BEST VALUE SATISFACTION SURVEYS 2006/2007 (Agenda Item 16; Appendix K)


49. FOOD SERVICE PLAN 2007/2008 (Agenda Item 17; Appendix L) RESOLVED that the Food Service Plan for 2007/08 be approved.


50. EXTENSION OF FARNHAM AIR QUALITY MANAGEMENT AREA (Agenda Item 18; Appendix M)

RESOLVED that

51. GRAFFITI AND OTHER ENVIRONMENTAL CRIME (Agenda Item 20; Appendix O)


52. LAND REAR OF 11 HYDESTILE COTTAGES, HAMLEDON ROAD, HYDESTILE (Agenda Item 23; Appendix R)


53. EASEMENT OF ACCESS TO ST AUBYNS, ALFOLD ROAD, CRANLEIGH (Agenda Item 24; Appendix S)


54. PROPOSED SALE OF LAND TO REAR OF 20-30 GUILDFORD ROAD, FARNHAM (Agenda Item 25; Appendix T)


55. APPOINTMENT OF REPRESENTATIVE TO THE GODALMING HEALTHCHECK (Agenda Item 26)


56. PLANNING POLICY SPECIAL INTEREST GROUP - REVISED TERMS OF REFERENCE (Agenda Item 27)

“To give consideration to the policy for considering planning matters in the decision-making process”.

57. EXCLUSION OF PRESS AND PUBLIC (Agenda Item 29)
58. ACTION TAKEN SINCE THE LAST MEETING
i) Lease of Lammas Lands, Godalming;
ii) Appointment of White Young Green; and
iii) Outstanding Appointments, be noted.

59. HIGH COURT PROCEEDINGS (Agenda Item 30)

This item was considered in (Exempt) Session at 9.19 p.m.

The meeting commenced at 7.00 p.m. and concluded at 9.22 p.m.





Chairman