REPORT TO COUNCILLOR SORTON, PORTFOLIO HOLDER FOR RESOURCES
24 APRIL 2008
REPORT OF HEAD OF PERSONNEL AND TRAINING SERVICES ON FLIPPERS NURSERY
1.0PURPOSE AND POLICY CONTEXT
1.1This report updates on proposed changed accommodation arrangements to enable the continuation of Flippers Nursery.
2.0RECOMMENDATION
2.1The Portfolio Holder to approve the issuing of a licence agreement for Flippers Nursery to use Parkstone United Reformed Church on the basis set out in the report detail.
3.0PREVIOUS CONSIDERATION
3.1 At its meeting on 29 November 2007, Resources Overview Group received a report relating to accommodation pressures facing Flippers Nursery which potentially placed future nursery provision for Council employees at risk. The Chairman requested an update report as the situation developed.
3.2 Flippers Nursery has operated since 1995. It employs 8 qualified staff (and three employees on casual contracts), it is well managed and led by the Nursery Manager Janice Watkins. The Nursery has operated successfully and was the subject of a successful Ofsted inspection in September 2008. The Flippers Nursery provision, which is the product of a professional and committed staff team, is clearly valued by parents The Nursery has operated from Oddfellows Hall in Parkstone.
3.3 The Council has a duty to facilitate provision of adequate nursery places for the community. The provision of the Council’s own Nursery at Flippers has helped to contribute to this duty. Were Flippers Nursery to cease providing services the Council would be unlikely to meet this duty and would have difficulty identifying adequate nursery places.
4.0DEVELOPMENTS
4.1It was reported in November 2007 that the Oddfellows had written to the Council indicating the intention to sell Oddfellows Hall and to issue Flippers with notice to quit the Oddfellows Hall. The Oddfellows initially indicated that they were seeking vacant possession of the property by 1 April 2008. Meetings subsequently took place with representatives of the Oddfellows who agreed an extension of occupation until 30 June 2008, which was helpful.
4.2Meetings have taken place with parents and communications have been sent keeping them informed of developments.
4.3There has been exploration of the possibility of purchasing Oddfellows Hall for community use and continued use by Flippers Nursery. The price set for the Hall by the Oddfellows was indicated at £400,000 initially although subsequent indications by their agents have suggested a price of £350,000. The Local Plan provides that a facility used for community use will not be expected to be granted planning provision for alternative use. This is a general provision to protect community facilities and avoid over development. This will be expected to affect the proposed sale of Oddfellows Hall. The price indicated for purchase of the hall is significantly above advice given to the Council following a market valuation of the property by Goadsby’s. In view of this difference in expectation and indication of market value, it was not felt appropriate to recommend purchase of the Oddfellows Hall as representing good value for money and a suitable investment. The Oddfellows have now indicated their intention to place the property on the open market.
4.4An extensive range of alternative accommodation possibilities for Flippers Nursery has been considered.
4.5It is proposed that an agreement is entered it with the Parkstone United Reformed Church for occupation of part of the Church premises by Flippers Nursery to enable the Nursery to operate from the Church from the start of July 2008. Further details are given below.
4.6There has been continuing trade union consultation. There have been a significant number of actions and considerable work undertaken to help secure continuing nursery provision by Flippers.
4.7Flippers Nursery staff has continued to provide a high-class professional Nursery provision despite the uncertainties, which could affect their future employment and operation of the Nursery. Staff meetings have taken place and we are grateful for their professionalism.
5.0PARKSTONE UNITED REFORMED CHURCH, LOWER PARKSTONE
5.1The Church is located in Commercial Road, which is convenient for the Civic Centre and provides a central location.
5.2Adaptions to the Church building will be needed for the Nursery to operate from the Church and meet Ofsted requirements. Grant assistance is available to assist with the funding of adaptions, which involve an estimated cost in the order of £33,000. Parents have previously offered to assist with redecoration of premises and the Church are in agreement with this offer being taken up if parents remain willing to do this.
5.3Tendering action is being taken to enable the necessary work to be carried out. Property Services and particularly Kevin Judd has given considerable support to address a wide range of Property issues arising from the need for this relocation.
5.4 An Ofsted certification of the premises will be required before Flippers Nursery can operate from changed premises.
5.5 Occupation of the Hall will involve changes to the Churches use of the premises and we have been grateful for the help and support given by the Parkstone United Reformed Church to assist in finding a new home for Flippers Nursery. The support given has taken account of the positive relationship that exists between the Church and the Council arising from the Council Chaplaincy arrangements that are in place which involve a shared appointment of the Cannon Reverend Jonathan Martin as Chaplain to the Council and Minister for the Parkstone United Reformed Church.
5.6 The operation of the Nursery and Church community has the potential for mutual benefits. The Chaplaincy Management Committee and Pupil, Parent and Youth Services Unit have supported the relocation.
5.7 The Nurseries full year licence fee costs will be an estimated £12,500 per annum, which will involve some increase on previous rental costs.
5.8 Detailed arrangements and negotiations for occupation of the Church are being concluded at this time. At the time of preparing this report an agreement for occupation is close to being finalised this will need to be authorised by the Portfolio Holder for Resources. Taking account of the need to make adaptions to the building and to arrange an Ofsted certification of the premises, time is short to enable relocation by the start of July 2008 and early finalisation of the agreement and signing is important to avoid a potential break in provision.
5.9 There will be some other costs arising from the relocation such as removal costs.
5.10Agreement for occupation of the premises is expected to be for 2 to 3 years. The earlier report indicated provision at Parkstone URC would be for a time limited period. And that consideration would need to be given to longer-term possibilities. The Parkstone United Reformed Church is not viewed as a long term home for the Nursery by the Church and consideration will need to be given to more secure longer term arrangements following this relocation.
6.0FLIPPERS NURSERY CAPACITY
6.1Current Nursery provision provides 28 places for children aged from 3 months to 5 years. The facility is available to employees subject to space availability. As some children have part time placements the number of children using Flippers has been 38 per week. As the Council provides a workplace nursery this results in fee charges potentially being tax and National Insurance free if parents claim using the tax sacrifice scheme. This results in a provision that is competitively priced in net terms compared with the cost of childcare provision in other Nurseries. This has resulted in a potential additional demand for places from employees. The numbers have been limited at Oddfellows Hall by building constraints and the staff complement could potentially have allowed for more children to use the premises if the building capacity had been greater.
6.2 It is envisaged that the changed accommodation will enable a revised capacity of 40 places. This does give the opportunity to improve Nursery access for employees with child care needs, improve financial stability.
7.0FINANCIAL
7.1The budgeted gross cost of Flippers in 2008/2009 is £177,400. In 2007/2008 the budget was £170,610 and it is currently forecast to exceed its budget by an estimated £5,000.
7.2The Nursery financial strategy for 2008/09 is to achieve a break-even provision. This takes account of childcare provision for parents with children at Flippers being equitable with parents who have children at other Nurseries. The changes and costs set out within this report are not expected to affect this strategy. Expenditure above budget 2007/08 will be charged against the Flippers budget in 2008/09 to avoid an unplanned subsidy of parental Nursery fees.
7.3The Nursery fees payable by parents from 01 April 2007 to 31 March 2008 were:
UPSTAIRS UNIT (0 - 2 YEARS) / DOWNSTAIRS UNIT (2 - 5 YEARS)8 hour Session £33.74 / 8 hour Session £32.28
4 hour Session £16.87 / 4 hour Session £16.14
Full week (up to 40 hours) £161.20 / Full week (up to 40 hours) £153.50
Hourly rate £4.22 / Hourly rate £4.04
Hot meal fee (per meal) £2.75 / Hot meal fee (per meal) £2.75
The fees charged to parents have needed to be reviewed taking account of the changes set out in this report and some other inflationary costs including an equal pay review of Nursery staff salaries. This has lead to an above inflation increases. The new fees from 1 April 2008 are:
UPSTAIRS UNIT (0 - 2 YEARS) / DOWNSTAIRS UNIT (2 - 5 YEARS)8 hour Session £39.50 / 8 hour Session £35.50
4 hour Session £19.75 / 4 hour Session £17.75
Full week (up to 40 hours) £189.60 / Full week (up to 40 hours) £170.40
Hourly rate £4.94 / Hourly rate £4.44
Hot meal fee (per meal) £2.75 / Hot meal fee (per meal) £2.75
7.4Overall the new fees represent an increase of 12.51% between 2007/08 and 2008/09. This is estimated to raise £185,855 in fees in 2008/2009 - £8,455 more than has been budgeted for (i.e., £177,400).
7.5Pressures resulting from the move can be funded by both a central government grant for the refurbishment works that need to be carried out and the additional income identified in paragraph 7.4 above for ongoing running expenses, professional services involved in the refurbishment of the site and relocation costs associated with the move. The details are as follows:
- The costs of the refurbishment of the site (currently estimated at £33,140). Department for Education Sure Start grant has been secured which will fund all refurbishment expenditure that meets the grant’s eligibility criteria up-to a maximum of £xk. This would constitute a contingency of Y% on the current forecast cost.
ii.A £1,334 increase in the cost of hiring the accommodation for the nursery in 2008/2009 (£1,778 in 2009/10). Flippers will be liable for a licence agreement if it occupies the Parkstone URC site. This licence is inclusive of all occupation costs (e.g., maintenance, utilities, rates). The total charge in a full year will be £12,500. There is funding of £10,722 in Flipper’s base budget for this resulting in a net pressure of £1,778 (in a full year). The pressure in 2008/09 will be £1,334 (because occupation will only be for nine months of the year rather than the full twelve).
iii.Other incidental costs of the refurbishment not reclaimable against the grant. These total an estimated £6,500 and relate to Property Services Management and ICT fees and relocation costs (£5,800 and £700 respectively).
(ii) and (iii) above point to a pressure in 2008/09 of £7,834. This can be funded by the additional fee income identified in paragraph 7.4.
7.6Risks in provision and to financial stability could occur if there are delays in reaching/signing an agreement, or adaption work required cannot be completed in the timescale, or if there are problems in securing the required Ofsted certification of the new Nursery premises. Much hard work is being undertaken to try and ensure there is no disruption and contingency plans have been considered.
7.7As indicated, parents can benefit from a salary sacrifice scheme where provision of a workplace nursery leads to Nursery fees being tax and National Insurance free. Whilst this provides a significant benefit for parents compared with the costs they would face if a workplace nursery were not available, the cost of nursery provision is nonetheless significant for parents.
8.0LEGAL
8.1Arrangements for nursery provision must comply with statutory requirements and accommodation arrangements will involve a need for the legal agreement referred to earlier in the report. Legal advice has been sought on the detailed occupation agreement terms.
9.0EQUAL OPPORTUNITIES
9.1Flippers is an important provision that particularly supports female employees with child care provision. The provision particularly supports employees wishing to return to work following maternity leave. A number of female employees have indicated that were Flippers to cease provision they would be unable to meet their current contractual provisions with the Council. Flippers is a very positive element of equalities provision that supports employees and particularly female employees. The Council is the only organisation in the Town with its own workplace nursery provision exclusively for employees.
10.0SUMMARY
10.1The Nursery is a valued service. There has been considerable support from a number of parties to help secure continuation of Nursery provision after notice was served on the Nursery to vacate Oddfellows Hall. Plans are well advanced for continuation of a facility at Parkstone United Reformed Church. Time is short and much hard work will need to be undertaken to secure a smooth relocation of the Nursery within the time available. A more long-term resolution will then need to be considered.
10.2ADDITIONAL INFORMATION
1)The Borough will have licence to use the hall and the three adjoining rooms together with shared use of the toilets and kitchen. The use to be between 8am and 6pm Monday to Friday (with a reduced area in the main hall on Monday and Wednesday afternoons when the college have their own activities in the hall).
2)The licence will be for a period of 3 years whilst we sort out a more permanent solution for Flippers. The licence to be 2 years certain but for flexibility will include a break option on either side on 6 months notice.
3)The licence to be subject to a fee of £12,500 per annum payable quarterly in advance with a commencement date of 1 July 2008. The fee to be inclusive of all occupation costs but excluding directly attributable costs such a telephone charges, trade refuse etc.
4)In order to comply with Ofsted registration requirements various accommodation works will also need to be done to the building. These are as attached although the details are still being finalised with the Church including the exact position of the moveable partition and the details on the outside play area. It is understood that the cost of the works will be funded through Surestart funding.
Colin Hague
Head of Personnel and Training Services
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