EAST LINDSEY DISTRICT COUNCIL

Evaluation of Jubilee Park Business Plan for

Community Ownership

August 2010

Client:
East Lindsey District Council

Tedder Hall,

Manby Park

Manby

Lincolnshire

LN11 8UP

Client Lead: Mark Humphreys, Business Manager Sports Facilities

Tel: (01507) 601111

Fax: (01507) 600206

Prepared By:
Focus Consultants (UK) Limited

Focus House

Millennium Way West

Phoenix Business Park

Nottingham

NG8 6AS

Focus Lead: Heather Frecklington

Tel: (0115) 976 5050

Fax: (0115) 979 5151

Email:

DOCUMENT CONTROL SHEET

Client: / East Lindsey District Council
Project: / Evaluation of Jubilee Park Business Plan for Community Ownership
Title: / FinalReport
Authorised by: / Heather Frecklington
Position / Senior Consultant
Signature:
Date: / August 2010

EVALUATION OF JUBILEE PARK BUSINESS PLAN FOR COMMUNITYOWNERSHIP

DRAFT REPORT

CONTENTS

Page Nr

1.0Introduction2

2.0About Focus Consultants2

3.0Objectives of the Evaluation2

4.0Evaluation Findings 4

5.0 Overall Conclusions 20

APPENDICES

Appendix A -Project Programme

Appendix B-Skills / Competency Assessment

1.0INTRODUCTION

Focus Consultants (UK) Limited was appointed by East Lindsey District Council in August 2010 to conduct an evaluation of the Business Plan for the transfer of the management and operation of Jubilee Park Woodhall Spa to a community owned Industrial and Provident Society. The Business Plan was prepared by Jubilee Park Steering Group. This evaluation involved assessing the Business Plan and supporting documents against a series of questions and criteria.

This document is the report of the evaluation and sets out Focus’s findings against each of the criteria.

2.0ABOUT FOCUS CONSULTANTS

Focus Consultants specialises in high quality value added services to clients in economic development, area regeneration, funding support, research and evaluation, strategic and technical project and programme management, construction and property services and environmental sustainability consultancy.

Since its inception in 1994, Focus has assisted clients to secure in excess of £730 million of grant aid funding used to deliver over £980 million of projects and programmes. Focus has secured grant assistance from all major European Union programmes, United Kingdom Government through a wide range of different initiatives, all arms of the National Lottery, charitable trusts and foundations and many others, with a very high application success rate.

Focus has extensive experience of working with community groups and other organisations to develop sustainable business cases for village halls, community centres and other community facilities. Focus has worked extensively across East Lindsey and Lincolnshire.

3.0OBJECTIVES OF THE EVALUATION

East Lindsey District Council’s brief for the Evaluation of the Business Plan was to:

  • To offer an overall assessment, strengths and weaknesses included, of the robustness of the Woodhall Spa steering Group’s Business Case to take on the Park, refurbish the pool (with capital investment from ELDC) and operationally run the facility on a 125 year long-term lease community asset transfer basis to achieve a nil subsidy for ELDC by the end of year 5.
  • To assess, based on the Business Plan, whether the IPS is the most appropriate type of community organisation to establish. To consider whether the business plan will enable the new organisation to become a credible body with which ELDC can agree to the community asset transfer of Jubilee Park.
  • To assess whether the Business Case identifies funding opportunities which can be realistically realised.
  • To assess whether the Business Case provides a realistic assessment of the pool refurbishment costs including arrangements for this work to be effectively project managed
  • To assess whether the revenue costs of operating the facility have been realistically assessed, whether income assumptions are realistic and whether, therefore, the proposal demonstrates that the scheme is sustainable assuming the level of revenue support requested from ELDC.
  • To provide an overall risk assessment on the proposal. In doing so, to use the Department of Communities and Local Government’s (DCLG) Guide, “Managing Risks in Asset Transfer” (June 2008), Section6, as a template.

This report is based on an evaluation of the information provided in the “Business Plan for Community Ownership”, along with information provided at meetings between Focus and representatives of the Jubilee Park Steering Group. A number of issues were discussed with the group and a list of action points agreed. These points have now been actioned and a revised business plan has been produced.

It is acknowledged that East Lindsey District Council’s legal team have identified a potential issue with regards the State Aid implications of the proposal to transfer the management and operation of Jubilee Park to a community IPS. It is understood that East Lindsey District Council are seeking advice from the Department of Business, Innovation and Skills. All conclusions of this evaluation are subject to this advice.

4.0EVALUATION FINDINGS

4.1 Offer an overall assessment, strengths and weaknesses included, of the robustness of the Woodhall Spa steering Group’s Business Case to take on the Park, refurbish the pool (with capital investment from ELDC) and operationally run the facility on a 125 year long-term lease community asset transfer basis to achieve a nil subsidy for ELDC by the end of year 5.

Overall Considerations

The Plan presents a good thorough business case for the transfer of the management and operation of Jubilee Park to the local community of Woodhall Spa through the creation of an Industrial and Provident Society (IPS).

It proposes maximising the Park’s potential as a visitor attraction and a viable local business as well as a community facility and sets the overall objective of achieving a sustainable future for Jubilee Park. The plan details researched examples of other community enterprises operating similar facilities in other parts of the UK and the lessons that can be learnt from these.

As part of the business planning exercise, the Steering Group have undertaken a skills / competency assessment of themselves which has also been independently assessed by Focus Consultants. The Steering Group have undertaken a situational SWOT analysis of the Park and a risk analysis with suggested mitigation actions. The group have also set out the management and staffing structure for the IPS and the operation of the Park.

The Steering Group members are residents of Woodhall Spa and have demonstrated support from the wider community for taking over the management and operation of Jubilee Park. They have commitment from local residents to volunteer as directors of the IPS and to help with the day to day operation of the Park. At the latest annual Parish Council meeting, 3 residents volunteered to become Directors of the IPS and 23 residents volunteered their time to help with the operation of the park.

In terms of financial projections, all factors appear to have been well considered. The group recognises areas of vulnerability in terms of reliance on volunteers, competition within the camp site market, and the impact of the weather on visitor numbers and these areas are considered within the business plan. The plan also identifies new opportunities to maximise income potential and achieve sustainability after the East Lindsey District Council subsidy ceases at the end of year 5.

The business plan presents a robust set of financial assumptions which will enable the IPS to start generating a modest but sustainable surplus of income over expenditure after 6 years of operation. As a percentage of turnover, the surplus generated is between 5-10% which is generally considered to be a sustainable position.

A two-phase approach is proposed to the operation of Jubilee Park. The first phase, up to the end of the 2014 season, builds on the existing position without any major new initiatives or investment other than the refurbishment of the swimming pool. It assumes modest increases in visitor numbers with corresponding marketing activity planned and costed to achieve these increases. Small price increases are planned for 2011/12 and 2013/14. Fund raising initiatives have also been planned from 2011/12 including a lottery scheme and programme of fund raising events. The fund raising targets are considered ambitious but achievable with commitment from the local community.

Cost savings will be achieved through use of volunteers, operating with just one Duty Manager from year 2 and a reduction in grounds maintenance costs. Responsibility for grounds maintenance of the croquet lawns and bowling green will be passed on, on a rising scale to the Croquet Club and Bowling Club as they themselves are encouraged to become more financial sustainable. The business plan also sets out a contingency plan, should the Clubs be unable to meet these costs which involves finding alternative uses, and the Steering Group are very confident this can be done.

Phase two of the plan considers a number of potential new revenue generating initiatives including, new cafe / community centre, fitness suite, pool cover / bubble to extend the season and log cabins as an alternative to the campsite. These initiatives will be researched and costed fully during phase 1. Apart from the new cafe facility, none of these initiatives have been included within the financial projections of the Business Plan. The group are currently looking at working with potential cafe operators who may be interested in investing in and operating a new cafe for Jubilee Park.

The Business Plan includes a refurbishment plan for the Swimming Pool which has been costed. A site visit and cost review has been undertaken by Focus Consultants and it is considered the Business Plan does provide a realistic assessment of the pool refurbishment costs. A number of small additions to the budget are however recommended including an allowance of the CDM co-ordinator and a professional Project Manager.

Strengths

  • The Business Plan demonstrates that a number of the Members of the Jubilee Park Group have extensive business experience which will be relevant to the management of Jubilee Park.
  • The Steering Group members have undertaken a skills / competency analysis of themselves in recognition of the lack of track record of the organisation.
  • The Plan demonstrates a commitment to achieving sustainability.
  • The Plan achieves the requirement of nil subsidy for East Lindsey District Council after 2016/17.
  • The Plan demonstrates how cost savings can be achieved in the operation of the park.
  • The Plan demonstrates how modest increases in income can be generated to improve sustainability.
  • Scenario planning has been undertaken in relation to the impact of bad weather on income generation.
  • The income and expenditure projects demonstrate expected profit of between 5-10% from year 6.
  • The Steering Group has committed lead individuals from the local community, giving their time and expertise free of charge.
  • The proposal to take over the management and operation of the Park has the support of the local community and commitment from volunteers.
  • Professional support has been engaged to assist the development of the project.
  • The proposed scheme supports national, regional and local policy objectives regarding transfer of assets from public bodies to community groups.
  • The Steering Group has worked closely with Focus to update the Business Plan and income and expenditure projection to reflect agreed changes and actions.

Weaknesses

  • The operation of the Park on a day to day basis places a heavy reliance on volunteers.
  • Unclear at this point how the possible phase-two initiatives will be funded.
  • As a new organisation, the Steering Group or the IPS does not have a track record of delivering similar initiatives or managing community facilities.
  • IPS status may limit ability to secure grant funding through the IPS.
  • Delivery of the pool refurbishment within the proposed programme will be challenging. Building in the required procurement, a more realistic commencement date is mid-late November 2010 with completion late April 2011.

4.2Assess, based on the Business Plan, whether the IPS is the most appropriate type of community organisation to establish and in doing so whether the business plan will enable the new organisation to become a credible organisation with which ELDC can agree to the community asset transfer of Jubilee Park.

IPS Status

The Steering Group, supported by Charles Cooke of Lincolnshire Co-operative Development Agency have committed to establishing an Industrial and Provident Society to manage and operate Jubilee Park. The reasons for selecting this legal form are because it could:

  • Provide incorporate status
  • Limit liability
  • Enter into leases, sub leases and licence arrangements
  • Provide a secure lock of the assets to community benefit
  • Offer membership to the whole community
  • Allow representation to stakeholder interests
  • Be a stakeholder in subsidiary trading arms, if appropriate
  • Permit issue of community shares in variable amounts to members without change to the democratic status of the organisation
  • Issue shares to raise finance, up to £20,000 per member where the returns are capped in accordance with the principle of community benefit.

Whilst in many ways an IPS seems an entirely appropriate status for the organisation, it has been raised with the Steering Group that as an organisation that can distribute dividends to shareholders, the IPS is likely to be ineligible to apply for funding from many public sector funding organisations.

The Business Plan does not state that grant funding will be required to realise the assumptions within the plan, however, discussion with members of the Steering Group suggests that grant funding may well be sought in the future for some of the proposed developments in the park. As an IPS with the potential to distribute resources through dividends to shareholders, the organisation will find it more difficult to secure this grant funding than an organisation which does not distribute dividends.

As explained to the Steering Group, the importance of bidding for funding in the future needs to be weighed against the possibility of attracting investment from businesses or individuals.

Credibility

The Business Plan sets out the experience and track record or each of the members of the Steering Group and at East Lindsey District Council’s request, members of the Steering Group will fill some of the Director posts in the IPS. As individuals, the Steering Group has extensive business and community experience which is relevant to the management and operation of Jubilee Park.

However, as a new organisation, the Group and the IPS has no track record of managing and operating community facilities. With this in mind, as part of the evaluation of the business case, the Steering Group were asked to undertake a SWOT analysis of themselves and potential Directors of the IPS in order to fully understand the internal and external influences on the organisation. In response to this request, the group undertook a skills / competency assessment which was then independently assessed by Focus.

This is supported within the business plan by a management structure which sets out the roles and responsibilities of the different organisations within the structure, including a number of advisory groups and an explanation of how the performance of the IPS will be monitored. It is considered that the structure and monitoring procedures are appropriate.

4.3Assess whether the Business Case identifies funding opportunities which can be realistically realised.

The business plan relies on a significant financial contribution from East Lindsey District Council, a capital contribution of around £700,000 in 2010/2011 and a revenue contribution of £217,000 over the 5 year period 2011/12 to 2015/16. These contributions are yet to be agreed by East Lindsey District Council and without this investment the proposal is not viable and will not proceed. A decision by East Lindsey District Council as to whether to make this investment or not is expected on the 7th September 2010.

To develop a sustainable business model, the IPS have identified a number of ways of generating additional income for the Park. These include small price increases and modest increases in visitor numbers. These assumptions are considered reasonable and will be accompanied by marketing activity to attract new visitors to the Park.

The IPS has set itself ambitious yearly fundraising targets of around £5,000 in the first year, rising to almost £39,000 by 2020/21. The fund raising initiatives include a lottery scheme and a series of special events. The fundraising target also assumes a £3,000 grant from the Parish Council, which from what we understand has yet to be officially confirmed but is reasonably secure. The fundraising targets are considered to be ambitious but achievable with the strong support of the local community.

As part of the two-phase approach to the business plan, the IPS have identified a number of major new initiatives to secure additional revenue for the park from 2014 onwards. Suggested initiatives include a new cafe, fitness suite, pool cover or bubble to extend the season and log cabins.

In terms of the cafe, the group seem reasonably confident that they will be able to attract a company that will invest in and operate a new cafe facility for the park and that it will be in place by the start of the 2014 season. However, this approach is not yet confirmed and represents something of a risk as if it does not proceed - it jeopardises the assumed level of income from the cafe from 2014 onwards, as set out in the business plan.

The rest of the suggestions for new initiatives have yet to be fully planned out and will be researched between now and 2014. However, based on the information gathered by the Steering Group about similar community operated facilities in the UK and our experience of community run facilities, the suggestions put forward for phase two would seem appropriate and likely to generate new income, if the capital investment needed can be secured.

4.4Assess whether the Business Case provides a realistic assessment of the pool refurbishment costs including arrangements for this work to be effectively project managed.

The Jubilee Park swimming pool, changing rooms and the caravan site amenity block were inspected by a Chartered Building Surveyor from Focus Consultants on Sunday 15th August 2010. The inspection was undertaken prior to the pool opening, but as it was operational and full of water a detailed inspection of the swimming areas was not possible.