Agenda item

Deepings Leisure Centre

Due to significant health and safety concerns, the Deepings Leisure Centre has been temporarily closed since July 2021. At an extraordinary meeting of Council on 2 September 2021, it was agreed that options to provide leisure in the Deepings area would be assessed at a joint meeting of Culture and Visitor Economy and Finance, Economic Development and Corporate Services Overview and Scrutiny Committees. It was agreed these two Committees would jointly make a recommendation on the preferred option to Cabinet, prior to consideration by Council.


This item and the attached report provides Members with an opportunity to carryout this decision of Council. In order to facilitate discussion and debate of this item as efficiently as possible, it is proposed that consideration of the report takes place as follows:


(a)           Presentation of the report by the Cabinet Member for Leisure and Officers


(b)           Consideration of background information on the Deepings Leisure Centre


(c)           Consideration of feasibility work undertaken for a new Leisure Centre


(d)           Consideration of leasing arrangements


(e)           Consideration of refurbishment options in respect of the existing Leisure Centre


(f)             Consideration of the project risks and opportunities


(g)           Consideration of the timeline


(h)           Consideration of recommendations to Cabinet


Exclusion of Public and Press


Some of the appendices to the report contain information which is exempt from publication. In addition, exempt information not for publication may be disclosed as a result of considering the report at the various stages outlined at (a) to (h) above. The press and public may therefore be excluded during discussion of this agenda item under paragraphs 1 and 2 of Schedule 12A of the Local government Act 1972 (as amended) at the relevant stage of the discussion and debate.


The Joint Scrutiny Committee considered a comprehensive report which provided Members with the background relating to The Deepings Leisure Centre and options available relating to the provision of a Leisure Centre in The Deepings.


In presenting the report, Councillor Barry Dobson, Cabinet Member for Leisure, made the following points:


·       Investing in high quality leisure facilities across the District was a key part of the Council’s corporate ambition and a vital part of achieving this was good quality facilities which were sustainable and met customer expectations.

·       He had been the Portfolio Holder for Leisure since January last year and was personally committed to delivering on the ambitious leisure improvement plans which this Council had previously announced. As part of this, the Deepings area was prioritised for investment due to the age and condition of the existing Leisure Centre.

·       Over the course of the last two years, a significant amount of work had been undertaken to identify the feasibility of providing a New Leisure Centre for the Deepings area. The report documented the Council’s journey in this respect and provided information on each of the schemes considered, together with the resulting impact on the Council’s General Fund revenue budgets.

·       Whilst a new build for the Deepings area was once considered affordable, this was sadly no longer the case.

·       The Council finds itself in extremely challenging financial times. Whilst some of this was a direct result of reduced funding from Central Government, the impact of Covid-19 on the Council’s finances could not be under-estimated. This has resulted in a significant reduction in the Council’s income, and its reserves have been put under pressure as it had supported local residents, businesses and staff. The Council had to align its diminished resources for the benefit of all residents across the District.  That being said, due to the temporary closure of the existing Leisure Centre, the Deepings area was currently without any leisure provision.

·       Since the meeting of Full Council on 2 September a full range of building and land surveys had taken place on the existing facility, and experts had been commissioned to bring forward options for refurbishment and the associated business plans. Four options had been identified, one of which included a full remodel and refurbishment of the existing centre which would meet the evidenced need, whilst providing residents of the Deepings with a facility which had the look and feel of a new centre.

·       As a refurbishment of this magnitude and cost would still be a significant undertaking for the Council, any investment approved would require the Council to review its spending priorities to account for the cost of borrowing. No investment would be possible, however, without the Council gaining a legal interest in the existing building. Although there had been good progress, there was still work to do in this regard.


The Cabinet Member for Leisure introduced David Rushton from Sports and Leisure Consultancy (SLC), who provided details of the work SLC had been undertaking with the Council. The work included the formation of LeisureSK Ltd, a Council owned company to manage the Council’s Leisure provision, after the contract had ceased with the previous provider, OneLife.


Paul Weston of Paul Weston Architects introduced himself to Members and provided details of the experience of his company, which included feasibility studies working alongside SLC. Options costs that had been prepared were prudent, taking into account a timescale and how inflation could have an impact through the project.


The report set out that the Deepings Leisure Centre had been temporarily closed since July 2021, due to significant health and safety concerns.  An extraordinary meeting of Full Council was held on 2 September 2021 where it was agreed that a joint meeting of the Finance, Economic Development & Corporate Services and Culture and Visitor Economy Overview and Scrutiny Committees would be held to consider the future of the Deepings Leisure Centre and make recommendations on the preferred options to Cabinet on 7 December 2021. A final decision would be taken at a further extraordinary meeting of Full Council, scheduled for 14 December 2021.


The South Kesteven District Council (SKDC) Corporate Plan (2020-2023) recognised the role facilities played to inspire residents to take part in sport and physical activity. The Council had four Leisure Centres within its portfolio, which helped contribute towards the promotion of Healthy and Stronger Communities.


The Deepings Leisure Centre was built and opened in 1974, since that time it had been managed by SKDC, the land and the building were owned by Lincolnshire County Council (LCC). There had never been any formal leasehold arrangements in place between SKDC and LCC, which meant the responsibilities of each organisation had not been documented. The facilities were shared with the Deepings School (part of the Anthem Trust), who had use of the sports hall, playing fields and swimming pool during term time, with the fee paid for that use equating to £35,600 for 2021/22. 


In 2014 LCC withdrew its maintenance contribution of £124,000 and notified the Council that the land and buildings would be transferred to the Anthem Trust, as part of the Academy’s transfer process. Subsequently the Council was advised that it was necessary to secure a leasehold interest directly with the Anthem Trust. To date the transfer had not been completed and was currently in progress.  Unfortunately, despite numerous attempts to agree terms, a lease between the Anthem Trust and the Council was not in place. This had meant that since 2014 the Council had been solely responsible for the maintenance and repair of the Deepings Leisure Centre. 


Previous feasibility work had been undertaken, which was reported to Members in 2013. Consultants were engaged to identify schemes of refurbishment, should a lease be secured. There had been an anticipation that, without investments, the existing Leisure Centre would close in 2016.


In 2018 Mace Ltd had been commissioned on behalf of InvestSK Ltd (a Council owned company) and undertook an initial assessment of all four of the Leisure Centres within the Council’s Portfolio. On 7 March 2019, Cabinet received a report titled ‘Enhancing Leisure Opportunities for Everyone’.  The report included the results of the feasibility work and a range of options for the development and refurbishment of the facilities within the portfolio.


In May 2020, to ensure that a robust structure was in place for the decisions around the facilities, a project team was formed. This team included:

the Chief Executive, Strategic Director for Growth, Section 151 Officer, Director of Law and Governance and Head of Leisure. Additionally, a Leisure Improvement Board was formed comprising key Cabinet Members; The Leader, Cabinet Member for Leisure, Cabinet Member for Finance and Resources and Cabinet Member for Culture and Visitor Economy. 


Members received a briefing on 20 October 2020, which provided an update on the improvement plans and feasibility work undertaken for the leisure portfolio. The briefing also included the scale of work involved and the challenges the Council faced in terms of affordability. The Leisure Improvement Board advised Members that improvement schemes would need to be prioritised, with the Deepings Leisure Centre being the key priority.


In May 2020, the Council commissioned Paul Weston Architect to provide a check and challenge to the original feasibility work undertaken by Mace Ltd and to explore alternatives.


Supported by SLC, an assessment was undertaken of the local and latent demand for a new facility within the Deepings, to assist with the development of any business plans. In September 2019 a location had been identified for a replacement facility at Linchfield Road Playing Field in Deeping St. James.


The Council undertook work with Sport England, using their Facility Planning Model. Taking all information into account, Paul Weston prepared two schemes and a site masterplan, which included required facilities, financial planning and a business plan.


In late 2020 an opportunity arose to explore an alternative site for a new Deepings Leisure Centre, a prominent position within the Northfield Industrial Estate in Market Deeping, where the Landis & Gyr building was situated. A feasibility study of the site was undertaken, which was compared against the Lichfield Road scheme. The study found the building was a good standard, however a number of issues would have to be addressed. Members were provided with details of a comparison between the two sites which was set out in paragraph 1.47 of the report.


During the feasibility work being undertaken, the Council had been advised that there may be insufficient demand for a large-scale facility. SLC were therefore commissioned to produce a business plan for a smaller scale facility, considering local demand.


On 29 July 2021 the Chief Executive in consultation with the Leader of the Council and the Cabinet Member for Leisure, using emergency powers within the Council’s Constitution at Article 16, closed the Deepings Leisure Centre due to significant health and safety concerns.


LCC, as the current owner of the building, carried out an initial condition survey. The survey identified that approximately £1.2 million of work would be required to rectify some of the identified issues. 


Given the previous work around the Leisure Centre, Paul Weston and Caston Cost Consultants were commissioned to provide an opinion on LCC’s findings and consideration on how to extend the life of the building for a further 25 years. These findings were reported to Members at the extraordinary meeting of Full Council, held on 2 September 2021. 


The closure of the Deepings Leisure Centre had impacted the operation of the Deepings School and the delivery of their curriculum. Customers who had used the facility had been encouraged to use one of the three other Leisure Centres within the District.


Members were provided with details of refurbishment options and anticipated timelines, ranging from a basic refurbishment of the existing building to a full remodelling and refurbishment.


The Football Foundation had identified the Deepings areas as an area of priority for the development of a 3G pitch. Previous discussion had taken place with the Football Foundation regarding the opportunity to apply for grant funding to develop the pitch on the Linchfield Road Playing Fields. It would be proposed to replace the old astroturf pitch with an allocated budget of £700,000, £200,000 of which would be funded by the Council, to allow for the match funding required of any application. It had been confirmed that the Football Foundation would welcome an application in either April or July 2022.


Following the extraordinary meeting of Full Council on 2 September 2021, the Leader of LCC had offered to transfer the freehold of the Deepings Leisure Centre to the Council for £1. The Council had been keen to explore that possibility, however it was proven to not be possible under the provision of the Academies Act. A lease between the Anthem Trust and the Council would still require the permission of the Department for Education and should it be approved a Service Level Agreement would be required.


On 14 October 2021 Members were provided with a briefing session which presented details of the feasibility work that had been undertaken. Members had also been invited to tour the OneNK Centre in North Hykeham, which had previously been refurbished. The OneNK Centre was a similar build and age as the Deepings Leisure Centre and Paul Weston had been the lead Architect on that project.


As this stage of proceedings, commencing debate on the content of the report, the Chairman invited questions on sections (a), (b) and (c) on the agenda.


The Cabinet Member for Leisure informed Members that the Landis & Gyr site had been sold for a higher price than offered by SKDC this option would no longer be available.


Several questions or comments were raised by a Member to the Cabinet Member for Leisure, as follows:


·       When had it been first suggested that if the Council had to rely on reserves and borrowing the new centre would not be affordable?

·       Why had a leaflet produced by Councillor Barry Dobson in May 2021 included a statement within it that a new leisure centre would be created, with land secured?

·       Members had not been made aware that in February 2020 the second Mace Report had made it clear that previous election promises were unaffordable.

·       A Cabinet meeting suggested that the Councillor Barry Dobson had attended all Leisure Centres within South Kesteven. However, having approached Councillor Dobson requesting what date he had attended the Deepings Leisure Centre, he reported that he had not visited the Deepings Leisure Centre and stated that it was to be demolished. 


The Cabinet Member for Leisure responded to the questions and comments raised, as follows:


·       The Linchfield Road playing fields site had been agreed in principle for a new Leisure Centre. At the time of the meeting, the Council had been looking to fund a new leisure facility using prudential borrowing, local priority reserves and a capital receipt, which would now no longer be possible due to solely having to rely on prudential borrowing to fund a new leisure centre, creating a significant revenue pressure for SKDC.

·       The Mace Report had not been commissioned by himself. Questions were raised regarding this report at the time and experts were involved to assess the options available. The Deepings had been chosen as the preferred site to locate a new leisure centre.

·       He had not visited the Deepings Leisure Centre at that time. He had been made aware, however, that the changing rooms needed to be repaired and upgraded.


A Member asked the Cabinet Member for Finance and Waste Services why a new centre had never been included within the Medium Term Financial Strategy, which would be required, if a new centre had any potential.


Councillor Adam Stokes, Cabinet Member for Finance and Waste Services, stated that a new build scheme would only be incorporated into the Council’s budget and Medium Term Financial Strategy if relevant scoping and feasibility work had been undertaken. The impact of COVID-19 and changes to external funding had affected the financial landscape for the Council.


A Member asked the Leader of the Council or Cabinet Member for Leisure why the Council was no longer able to use the capital receipts, prudential borrowing and local priority reserves towards the cost of a new Leisure Centre.


Councillor Kelham Cooke, Leader of the Council, took this opportunity to declare that he had trained and used Deepings Leisure Centre over a number of years.


The Leader highlighted the need to balance the way the Council provided leisure services across the wider area. He underlined the ambition to replace the leisure centre in the Deepings, however, the finance mechanism that had been previously used would be around the private sector finance, to which this investment into the leisure market had now been diminished.


A Member asked Paul Weston at what point in time had refurbishment options been explored rather than new build options and why the Landis and Gyr site had not been progressed.


Mr Weston stated that he had prepared the Landis & Gyr option prior to the national lockdown. In terms of the sequencing, the refurbishment and remodel options for Deepings Leisure Centre, this had been prepared over the past four months.


A Member asked the Cabinet Member for Leisure whether he had noticed the condition of the boilers on his visit to the Deepings Leisure Centre.


Councillor Barry Dobson explained that he did not attend the Deepings Leisure Centre with other members of the Deepings when the condition of the boilers had been highlighted.


A Member, in stating that recovery of the leisure sector was currently at 74%, asked David Rushton whether aspects of leisure were recovering from the impact of Covid.


Mr Rushton confirmed that swimming was recovering well, particularly swimming lessons due to a good level of demand. However, it had not recovered fully potentially due to the age profile. The area of concern had been health and fitness due to being a lucrative element of a leisure service.


A Member asked the Council’s Assistant Director of Finance and Section 151 Officer the following questions:


·       How did the minimum revenue provision work and what impact upon the Council’s revenue budget would this have going forward?

·       Could he explain the financial affordability of a new build and the impact on the rest of the District?


The Assistant Director of Finance and Section 151 Officer clarified the options available in terms of affordability. The different increases of council tax for each option were outlined, to which endorsement from residents would be taken into account.


A Member asked Paul Weston if a major refurbishment of the Deepings Leisure Centre would be the only way forward or is a ‘patch up’ option available to prolong the current centres lifespan by five or ten years.


Mr Weston clarified that the ‘patch up’ option was Option A as set out in the report. Option A dealt with the building’s failures currently and did not provide any different facilities, however, would last 25 years. He highlighted the opportunity for a remodel as the current structure of the building and the pool tanks were in good condition. By remodelling the current building, it would provide all the facilities of a new build but at a lower cost.


A Member sought clarity on the following issues:


·       The viability of new leisure centres in the Medium Term Financial Plan.

·       The expense of a new leisure centre prior to Covid-19.

·       The point in which the current leisure centre industry was in turmoil.

·       Clarity on whether the Cabinet Member for Leisure did attend the Leisure Centre and view the boilers.

·       The use of capital receipts from Stamford.

·       When architects were investigating Landis & Gyr and the Linchfield Road site, why no other options were put forward following a remodel to reduce the cost.

Councillor Dobson confirmed that he had visited the boiler room in the Deepings Leisure Centre and had confirmed that one of the boilers was already defunct, with the two boilers being of the same age.


The Chairman invited Members to consider section (d) of the agenda at this stage of proceedings.


Councillor Dobson confirmed that the Council had been in discussion with LCC, who owned the building, and the lease agreement was ongoing between SKDC and the Anthem Trust.


The Head of Arts and Leisure confirmed that an agreed Heads of Terms had been confirmed with the Anthem Trust which would go to the Trustees for approval in due course. It was highlighted that the school did not want to take on the lease of the existing building in its current condition. However, an agreement for lease would be possible which would rely upon practical completion and specification of the work intended. The Council would be protected by having a legally binding agreement in place.


Members raised concerns as to what could happen in eight years’ time, for example, if a lease could not be agreed and what the respective options would be available.


The Head of Arts and Leisure clarified that until the Council agreed the Heads of Terms of a lease and a refurbishment option, these conversations could not be held with the Anthem Trust. 


A Member asked the Head of Arts and Leisure to confirm the timescale in which the Department for Education would correspond back to the Council.


The Head of Arts and Leisure explained that there had been significant pressure from the Department for Education on LCC and the Anthem Trust to resolve matters. LCC had reassured SKDC that this issue would be expedited.


A Member asked the Head of Arts and Leisure to confirm whether the refurbishment option would be looked into should the school decide not to renew its lease.


The Head of Arts and Leisure confirmed that the Council would not invest into the Centre without a lease.


A Member asked for clarification as to how long the lease would continue for and a negotiation timeframe.


It was noted that the lease from LCC to the school would be 125 years as it must be on standard academy terms.


A Member asked the Cabinet Member for Leisure what steps had been taken at LCC to attempt to resolve the lease situation and confirmation of the possible timescale of contractors starting work once a decision had been made.


Councillor Dobson was unable to answer this question but stated. However, he stated for the record that in his time as a County Councillor he had attended the majority of Deeping St James Parish Council meetings in the years 2017-2021.


The Head of Arts and Leisure clarified that the lease between LCC and the Anthem Trust would have to take place in parallel and that those negotiations were well advanced. The two agreements would be entered in concurrently.


The Chairman invited Members to discuss items (e), (f), (g) and (h) of the agenda at this stage of proceedings.


The Head of Arts and Leisure confirmed that the school had requested additional work to be undertaken such as a resurfacing of car park, a new incoming water main and bollards at the entrance gates.


A Member shared his disappointment over the selling of the Landis & Gyr site. He stated that the report outlined the comparisons of the Landis & Gyr site for refurbishment with a new build and did not mention renovating the existing Deepings Leisure Centre.


Clarification was sought as to how the costings of the options available had been calculated.


Mr Weston confirmed that at the start of the project he looked at the needs assessment as if it was to be a new build and how this could be related to the existing building. He highlighted the problems of the existing building, specifically accommodation for people on the first-floor level which comprised a very small gym space. Mr Weston highlighted the aspects of each of the options available and the difference in costings.


Mr Rushton commented on the business planning of the options. He stressed that all options and business plans factored in the relaunch of the Centre including its memberships and swimming lessons. He also outlined that the financial model of a Leisure Centre was dependant on health and fitness income, swimming income and swimming lesson income. These three components determined the financial performance of a Leisure Centre, based on the catchment area and customer demand.


The Chief Executive noted that in paragraph 1.22 of the report, the needs analysis had been provided where the demographics of the area were investigated to identify the needs of the area for these facilities. It was highlighted that the Anthem Trust were in use of the playing fields, sports hall and the swimming pool and that the refurbishment options available included the Anthem Trust still having access to these.


A Member asked Paul Weston the following questions:


·       When SKDC was exploring new build options on Linchfield Road and the Landis & Gyr site, why was a recommendation not made regarding a new build centre?

·       Why did the costs of Option A appear higher that the £1.5 million that LCC’s condition survey originally stated?

·       Could he confirm the cost and timescale of a basic refurbishment as set out in Option A?

·       If the Council did agree to undertake a refurbishment rather than a new build, what would the arrangement be with the school and how would the partnership be managed?

·       Could he confirm the management of cost and maintenance of the shared use car park?

·       Would there be an impact on income in respect of the lease of school fields?

·       If the refurbishment of the existing centre went ahead, would the refurbishment be phased?

·       Could he confirm figures based around the demand of Deepings Leisure Centre?


Mr Weston confirmed he had prepared and presented refurbishment options in 2013 to SKDC. He highlighted an issue raised that a new build could be built whilst the existing Leisure Centre remained in operation. He stated that a basic refurbishment option would be based on a 25-year lifespan, which was used to judge the selection of materials and how long they would last. The work that had been completed around Option A was based on the new condition survey which produced more evidenced information. 


The Head of Arts and Leisure confirmed that the proposed lease would include the Leisure Centre building and the playing fields. It was highlighted that the school would still require the use of the sports hall and playing fields during day term time, however, the proposal included a payment from the school. Alongside this, a Service Level Agreement could be developed which would detail the payments and how they would be calculated.


It was noted that a phased delivery could be something that the Council investigated, however, the current costs were based on the work being completed at one time. It was a probability that the options around phasing may increase the cost.


Further clarity was sought in relation to the extension of the catchment area considered and whether transport facilities were considered to determine the demand of the area.


Mr Rushton confirmed that the catchment area was a 20 minute travel time and that current and future population projections were included within this assessment. It was highlighted that none of the projections indicated that the centre would not take less than it did before, warning however that it may take some time to get back to how it was prior to closure.


A query was raised regarding the consideration of Stamford, Grantham and Bourne. Bourne had experienced a leaking roof and had an old boiler. It was understood, however, that temporary measures had been put into place for the winter.


The Head of Arts and Leisure clarified that Bourne Leisure Centre opened in the 1990’s and that the installations were not as old as the Deepings Leisure Centre. A budget had been assigned to bring forward the refurbishment options, with that budget not having been fully utilised. The Council was in the process of commissioning full building condition surveys on Stamford, Grantham and Bourne Leisure Centres to identify their condition and to develop asset management plans.


The Chairman made the following points:


·       The figures in the report were not in the current Medium Term Financial Plans, together with the revenue that would need to be gained and any savings generated.

·       The impact of inflation that had been modelled were still unclear

·       It would be interesting to understand the Leader of the Council’s preferred approach in respect of the options presented.


The Assistant Director of Finance and Section 151 Officer highlighted the financial implications in the report were slightly disproportionate due to the new build being a 50-year lifespan and the refurbishing of the existing asset being 25-year lifespan. This put pressure on the borrowing profile due to it being over a shortened period. The surplus income projections could be used to offset the borrowing cost options.


The Deputy Leader of the Council and Cabinet Member for Finance and Waste Service noted that to facilitate this any budget decisions would be made by Full Council.


Mr Weston confirmed that the contingency allowance at this stage was 10%. The calculations for inflation had followed a national service building cost calculated by the Royal Institution of Chartered Surveyors and was received on a monthly basis. The inflation figures were based on the mid-point of the different options.


The Leader of the Council highlighted the ambition for Option C, due to delivering everything that a new centre would, whilst protecting services in the south of the District. Cabinet and Council would determine the outcome in terms of savings and prioritising the budgets in respect of leisure.


A Member queried what consultation had taken place with the Deepings community about the options available for Deepings Leisure Centre.


The Head of Arts and Leisure stated that the proposals set out in the report were subject to consultation and highlighted the difficulty of community consultation with no parameters.


A Member questioned procurement of works for this project.


The Head of Arts and Leisure stated that, following the meeting, detailed work around procurement would be undertaken for presentation to Cabinet on 7 December 2021.


The Monitoring Officer clarified that this meeting would be making recommendations to Cabinet, with a further recommendation from Cabinet referred onto Full Council at its extraordinary meeting on 14 December 2021 for the final decision. It was highlighted that this meeting, as a Joint Overview and Scrutiny Committee, had no decision-making power on this matter.




To note the feasibility work undertaken to establish options for leisure provision in the Deepings.




That the Joint Overview and Scrutiny Committee recommends to Cabinet that Full Council:


(1)  Approves Option C with a budget allocation of £10.663m for leisure facilities to meet the local needs in the Deepings area, subject to meaningful community consultation and the inclusion of a financial review.

(2)  Requests the relevant Cabinet Member to call upon the Department for Education and the Anthem Trust to resolve the lease of Deepings Leisure Centre in order to allow LeisureSK Ltd   and South Kesteven District Council representatives to reopen the Deepings Leisure Centre as soon as possible.

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