CABINET - 14/2/2012 – FOR INFORMATION AGENDA ITEM 10

BOROUGH OF POOLE

ENVIRONMENT OVERVIEW AND SCRUTINY COMMITTEE

9FEBRUARY 2012

PROPOSED CEMETERY AT MAGNA ROAD

PART OF THE PUBLISHED FORWARD PLAN YES

STATUS (Strategic)

  1. Purpose

1.1To update Members on options for the Council provision of a new cemeteryand recommend the way forward.

  1. Decision(s) Required

2.1Members are asked to recommend that Cabinet approves the Policy of providing a new cemetery on land at Magna Road within the Medium Term Financial Plan, subject to agreement with Bournemouth Borough Council.

  1. Background Information

3.1In September 2010 the Head of Leisure Services took a report to the Environment Overview and Scrutiny Committee for Members to consider options for providing earth burials in Poole. The option of no longer providing non-ashes burials in Poole was considered (the statutory duty of providing for disposal of the dead could be met through cremation or private burial facilities near to Poole) and rejected. The Council are however at risk of no longer being able to provide burial facilities in Poole within the near future, due to the lack of space within the near future.

3.2Members of the Committee recommended and Cabinet subsequently approved the reopening for burials of Branksome and Poole Cemeteries and that:

The Head of Leisure Services be asked to investigate the means to provide or procure a new Cemetery at the Canford Magna site and report back to a future Meeting of the Overview and scrutiny Committee.

3.3Poole has around 80 non-ashes burials a year and at the current rate the Borough will run out of burial space in 2012.Whist the number of annual registered deaths in Poole has remained broadly stable, over the last 5 years there has been a general decrease in the number of burials undertaken within Poole Cemeteries. Officers consider that there are 2 reasons for this:

  • the limited offer in Poole’s existing Cemeteries (including limited capacity). Currently only Poole and Branksome Cemeteries have space to bury. Even in these Cemeteries, space is at a premium and the choice of plots that the bereaved families are able to be offered is small; and
  • the number of alternatives available within the local market.

3.3The Borough of Poole and Bournemouth Borough Council jointly own the Land at Magna Road, which both authorities have identified for use as a possible cemetery. The Land comprises approximately 10.6 ha, best described as agricultural grazing land. There is gated access from Magna Road which has been secured against unauthorised access and a further entrance on the eastern side, which is accessible from Canford Arena.

3.4Bournemouth Borough Councilhasindicated that its Cemeteries have burial capacity for the next 10-15 years.Bournemouth Borough Councilofficers have indicated that it is unlikely to be a capital funding priority at this time.

3.5The Land is designated as Green Belt but has no other policy constraints. In 1995 planning permission was granted by the Borough of Poole for the use of the Land as a cemetery (App 5/95/22892/011/W). This Planning Permission was renewed in 2000 (App 00/22892/W/017) but has since lapsed. A new planning permission will be required.

3.6Borough of Poole Planning & Regeneration Services have advised that the use of the Land as a cemetery is acceptable in policy terms and that it meets the limited development opportunities for Green Belt, as set out in the Planning Policy Guidance 2 ‘Green Belts’.

3.7While the design has yet to be finalised, there is a balance to be achieved between initial infrastructure costs and the need to maximise the burial space on the Site for the next 15 years.

  1. Financial Implications

4.1The financial modelling has been based on a proposal for a new highway access off Magna Road directly into the Cemetery Site, providing a new entrance with signs and gates and parking for approximately 50 cars. There will need to be a shelter on Site, welfare facilities and the provision of water and electricity. Leisure Services will also need a vehicle store for operational reasons.As not all the Land is to be developed at the outset the proposals should include site security, including within the Site, to protect from illegal access.

4.2Leisure Services and Financial Services do not consider that the provision of a new cemetery will adversely impact on the Crematorium income.

4.3The initial financial work has been undertaken using different scenarios of burial activity at the new Site andhas projected annual net cash flows for the new Site based on 60 new burials each year, as figures suggest this is a realistic estimate of likely burial activity. It has excluded the burial of cremated remains but the option should be considered against the background of new provision at the Crematorium.

4.4A Capital investment of £225k is required to fund the Project.

4.5Officers have considered whether the investment is best funded from Prudential Borrowing (will incur borrowing costs) or through Council Capital Contribution (nil borrowing). As

a) the scale of investment required is relatively small and

b) financial analysis has demonstrated the ability for investment to be recovered within 7 years, based on annual surpluses generated from 60 new burials per year, or 11.6 years based on annual surpluses generated from 50 new burials per year,

it is proposed that the Project is funded through Council Capital Contribution.

This will save the Council £68k interest repaymentsthat would otherwise be incurred through Prudential borrowing based on borrowing £225k over 15 years at interest rate of 4.05% (rate as at September 2011).

4.6Core operational expenses (grave digging, cemetery site supervision and administration) on the new Site will be funded through capacity within the existing Cemetery Services Team. The new Cemetery will however require additional Council funding for site/grounds maintenance, utilities, equipment and security. This is expected to be £53.5k per annum,which has been included in the financial appraisal (see 4.5).

4.7It is proposed that fee income will be derived from a new pricing schedule developed for the new Cemetery. This will consider how Poole’s current interment fees compare with neighbouring authorities and private local providers and what fee structure should be applied in the new Cemetery. The pricing schedule will also determine the most appropriate length of lease for burial plots and consider the capacity to introduce new burial packages not currently offered in Poole’s existing Cemeteries (e.g. pre-purchased plots, hierarchy of plots).

4.8Officers have also considered how the investment in the Cemetery compares with alternative investmentsas the Council is under no statutory obligation to provide a new Cemetery.Should the new Cemetery attract 60 new burials a year, annual surpluses arising will be equivalent to a 13% rate of return on initial investment of £225k. Given current market conditions this appears to be sound investment.

4.9The key assumptions used in the financial viability analysis are contained in Annexe 1.

5Legal Implications

5.1The Borough of Poole is a Burial Authority by virtue of s.214 (1) of the Local Government Act 1972 and has discretionary power to provide cemeteries. While this is a discretionary power, the Council does have various statutory duties that it may be unable to fulfil if burial provision is unavailable.

5.2Section 46 of the Public Health (Control of Disease) Act 1984 imposes a duty on a Burial Authority to dispose of the body of any person who has died or been found dead within their area where there is no other person to make arrangements. However they must not cause the body to be cremated where they have reason to believe that cremation would be contrary to the wishes of the deceased. The Council iscurrently able to fulfil its statutory obligation, as proper disposal of the dead is possible either by cremation or by the use of other cemeteries outside the Borough. The cremation option is unacceptable to some faiths and for people who for various reasons require burial rather than cremation.

5.3The agreement of Bournemouth Borough Council is essential before any work commences on this Land.

5.4Leisure Services have had initial discussions with officers from Bournemouth Borough Council who have indicated that they would be willing to recommend proceeding by way of a 15-year lease or management agreement. The terms of this agreement would be subject to negotiations and to the approval of the Bournemouth Cabinet, but the terms are likely to be along the following lines:

5.4.1The Borough of Poole, at its own cost, is to be responsible for:

  • The design of the new Cemetery, subject to the approval of the Borough of Bournemouth (such consent not to be unreasonably withheld);
  • Securing planning consent for the development;
  • All construction works;
  • Day-to-day management of the Cemetery.

5.4.2Financial arrangements:

  • The Borough of Poole would set charges in consultation with Bournemouth BC and would collect the income generated from the operation of the Cemetery;
  • The following expenditure will be offset against this income in accordance with annual budgets prepared by the Borough of Poole in consultation with Bournemouth BC;
  • Recovery of the cost of the construction of the Cemetery, including fees, in accordance with a cost plan previously approved by both Councils;
  • Interest on any prudential borrowing obtained to fund these capital costs;
  • Day-to-day running expenses;
  • A management fee;
  • Any surplus generated after deductions of these sums would either be reinvested in new capital works in the Cemetery, retained as a sinking fund to cover future renewals, or be distributed between the two Boroughs. In practice, no surplus will arise until the initial capital investment, plus any interest, has been repaid.

5.4.3Policies for site and burial management including regulations to be agreed by both Councils. However, as an overriding principle, the Cemetery would be available for burials for both Poole and Bournemouth residents and the normal practice of double fee charging would only apply to people residing outside of these two Boroughs.

5.4.4At the end of the 15-year Term it is likely that a new lease or management agreement would be negotiated on similar terms. Any under-recovery of capital investment or need for further works would be addressed as part of those negotiations.

6.Risk Management Implications

6.1

Gross risk / Gross risk score H/M/L / Mitigation / Residual risk score H/M/L
1 / Capital investment project costs are not fully understood/properly costed / M / Officer engagement with Transportation, Planning, Legal etc to determine project costs
Contingency of 10% applied to reflect level of uncertainty in initial financial viability work / L
2 / New cemetery fails to attract sufficient interest from the public (e.g. too remote a location, other local providers) / M / Unique selling point
Fees benchmarking work
Other burial services (e.g. hierarchy of plots)
Pre-purchased plots
Other faith burials / L
3 / New cemetery will require Council subsidy each year in addition to initial capital investment / H / Key cost in existing cemeteries is maintenance spend. This will be curtailed in new cemetery from strict enforcement of planned layout / M/L
4 / Demand outweighs planned burial capacity in existing design / M / Flexibility of layout – initial designs have deliberately provided for additional burial space to be accommodated if required / L
5 / Bournemouth Borough Council fails to agree with the BoP proposals / H / Continuing discussions between officers but there is a residual risk that might stall. / L

7.Equalities Implications

7.1Detailed equality impact assessments are required particularly regarding faith and specific consultation is intended in this respect.

8.Conclusion

8.1Detailed financial investigation shows that a Council provided and operated new cemetery is feasible without increasing operation costs and with capital investment fully repaid.

Clive Smith

Head of Leisure Services

Contact officers:

Richard Nicholson

Greenspace Development Team Leader

Leisure Services

(01202 261347)

Shirley Haider

Management Auditor

Financial Services

(01202 633528)

Background Papers

Environment Overview and Scrutiny Committee,6thSeptember 2010,report by Head of Leisure Services

Report to Cabinet:Future Provision of earth burials in Poole: Report of the Chairman of the Environment Overview and Scrutiny Committee12th October 2010

Cemetery Development Services, June 2010, A Strategy Document for the development of new cemetery provision at Magna Road

FINANCIAL INFORMATION

Key Assumptions used in Financial Viability Analysis

a)Project has been appraised over a 15 year period. This is aligned with the period for which Poole is expected to have sole use of the site (Bournemouth have capacity within existing cemeteries for the next 10-15 years). As Poole expects to fund all infrastructure investment without contribution from Bournemouth, financial viability work is focussed on whether this investment can be recovered prior to Bournemouth joining in year 15.

b)Initial capital investment of £225k (funded wholly from Poole Council Capital Contribution and not from Prudential Borrowing) has been used within viability work. Additional infrastructure repair spend of £5k is factored in at 5 yearly intervals.

c)Additional annual maintenance spend of £53.5k per annum (mostly salary related), increasing by 2.5% each year.

d)Marketing spend is included in financial calculations, weighted towards the earlier years of the project (when more marketing will be required).

e)Fee income from the sale of pre-purchased plots has been included within the financial viability analysis – this is based on a cautious estimate of the sale of only 6 pre-purchased plots (increasing to only 9 in year 15) each year. For context, Bournemouth currently sells around 30 pre-purchased plots each year. Fees of £500 per plot have been used, increasing by 3.25% per annum.

f)Anticipated annual fee income for adult interment is calculated based on current average fee of £1,350 – also increasing by 3.25% per annum over the life of the project. This is a cautious estimate of fee income as it is based on current fee prices only.

g)It is clear that the financial viability of the new cemetery depends on the number of new burials undertaken each year. Given that activity in this area has been falling over time (see A1) and demand for the new cemetery is not fully understood, financial viability calculations have been calculated using different estimates of 40, 45, 50 and 60 new burials each year (with no increase/decrease in activity in subsequent years).

h)Financial viability is based on burial activity only. As not all of the site is required for burials, there is the potential to generate additional income from alternative land use for part of the site – e.g. allotments, community farm, and driving range. Both Bournemouth Borough Council and the Borough of Poole Planning Services will need to be involved in understanding capacity for this.

1

1