Hampshire County Council

Executive Member - Recreation & Heritage Item 11

20 November 2003

New Accommodation Block, Calshot Activities Centre

Report of the Director of Recreation and Heritage and the County Treasurer

Contact: Stuart Nundy / Bevis Ingram 5015/7508

1. Summary

The following decisions are sought:

1.1 That the Executive Member, Recreation & Heritage, confirms that the project is a priority for Recreation & Heritage and undertakes that appropriate funding will be found from within the Departmental Capital Programme for the years 2004 -06, subject to the other contributions outlined below.

1.2 That the Executive Member for Recreation & Heritage approves the building of a new accommodation block at Calshot, to begin in the summer 2004, pending the final decisions over capital sourcing.

1.3 That the feasibility of applying service financed unsupported borrowing be investigated, within overall guidelines approved by the cabinet. It is assumed that this will form a major part of funding this project, supported by the current business case for the centre.

1.4 That the Centre builds its own contribution to the scheme to £360,000 through transfers from revenue to capital over the two financial years 2003/04 and 2004/05, and accumulated contributions already made.

1.5 That the Property, Building and Regulatory Department should proceed with full Project Appraisal during November - December 2003, prior to approaching the Executive Member, Policy and Resources, in early 2004.

2. Reason

In order to maintain its ability to attract and work with both young people and adults, Calshot Activities Centre urgently needs to address the poor quality of its current accommodation. A ten year development plan has established that the first step is to create a new purpose built block to permit the flexibility and quality required by all customers in the 21^st Century.

3. Other options considered and rejected

i. refurbishing other existing blocks

ii. carrying out no improvements at all

4. Conflicts of interest declared by the decision maker or a member or officer consulted -

None

5. Dispensation granted by the Standards Committee

Not applicable.

6. Reason(s) for the matter being dealt with if urgent

Not applicable.

Approved by: (signature) Date: (date of decision)

................................. ................................

Councillor J. Waddington

Hampshire County Council

Executive Member - Recreation & Heritage Item 11

20 November 2003

New accommodation block - Calshot Activities Centre

Report of the Director of Recreation and Heritage and the County Treasurer

Contact: Stuart Nundy / Bevis Ingram 5015/7508

1 Background

1.1 Calshot Activities Centre occupies the greater part of Calshot Spit at the mouth of Southampton Water. The residential facilities at the Centre are provided currently by three existing blocks, giving 150 bed spaces in total. Much of the existing accommodation is in former barrack style blocks dating from the early 20^th Century. Whilst the County Council and Calshot have worked hard to maintain the functionality and decorative order of these buildings, it is the case that schools, teachers, young people, corporate clients and adults now have expectations which far exceed the standard that we can currently provide in the existing buildings.

1.2 As a consequence, Calshot's user evaluations regularly record dissatisfaction with the nature of the accommodation.

1.3 It is proposed that enhanced and additional accommodation be provided by the construction of a new purpose built block, creating 60 new bed spaces in 20 rooms, with associated individual toilet and shower facilities. The design of the new block allows for good segregation of groups within it.

1.4 The new block forms part of the current five year strategy for the Outdoor Service. The strategy focused upon the contribution that the Outdoor Service could make to enabling the County Council to meet its corporate objectives, particularly as they apply to young people. The project will enable the Centre to more effectively contribute to the policy of enabling access for all young people to challenging outdoor activity. It will also provide the flexibility required to meet the accommodation expectations of adult and corporate clients which are key to the financial sustainability of the centre.

2 The Proposed New Accommodation Block

2.1 The new block will house up to 60 people in 20 bedrooms. Each room will contain two single beds and a third, bunk, bed. This gives the Centre the flexibility of housing three young people, or one or two adults as appropriate. All the ground floor rooms will provide accessible accommodation. Toilets and shower provision will break with the "communal" provision in other accommodation blocks, provided instead as individual units, ensuring privacy and accessibility. En-suite was considered but is not wholly appropriate for school groups. A meeting area/foyer, drying rooms and ancillary service rooms make up the remainder of the building.

2.2 Although providing up to 60 new beds, the new block will allow Calshot the additional capacity necessary to reduce the unsatisfactory density of beds in other blocks on site, creating more attractive and desirable rooms elsewhere. As a consequence the overall bed space within the Centre will rise by only 15 over current provision, but the overall number of people staying at the centre will rise significantly due to the more effective utilisation of bed spaces.

3 Capital costs

3.1 Initial estimates of building costs for the new block are set at approximately £1.15 million. This includes fees and second quarter 2004 inflation. It also includes all fixed fixtures and fittings, but not items such as bedding, mattresses or curtains which will be provided from other Calshot budget headings.

3.2 Income analysis suggests the following revenue increases from operation of the new accommodation (further details - see Business Plan p59-61)

3.3 Marginal costs related to occupancy of the new block will be approximately £16,000 (see Business Plan p 60), broken down as below

In addition annual fixed operating costs for the new block are calculated at £20,000. To this total of £36,000 should be added the contribution to the balance of overheads of £10,000 and contribution to centre wide minor works funding of £5,000.

3.4 Calshot thus has the ability to cover all the associated running costs of the new block from its additional earnings.

3.5 Calshot has made revenue contributions to capital over the past few years, to build up a fund to help pay for the Keymer House development. Currently this fund stands at £227,000. A further contribution of £40,000 is planned for 2003/04, and a further £40,000 that was earmarked for the slipway repairs is now available following a contribution from the Countryside Agency. When this is added to the capital fund the centre will have accrued £307,000, with the opportunity to increase this to £360,000 during 2004/05 from savings on the current minor works programme.

3.6 Capital funding for the project is therefore identified in principle as follows (as of November 20 2003). It should be understood that the funding of the project will be finalised with the Recreation & Heritage capital programme for 2004 - 2006. These allocations are indicative only.

1. Includes proposed 2004/05 Calshot revenue contribution of £53,000 from minor works budget.

2. The maximum allocated. Detailed budget discussions will determine the final contribution in December.

3. The minimum required. Detailed budget discussions will determine the final figure in December.

4 Servicing the capital

4.1 A paper on overall guidelines for service financed unsupported borrowing, within the prudential code, is going to the Cabinet for approval on 24 November. Final details are required with respect to the precise breakdown of sources of capital for this project; resources in this paper are based on a draft of the paper going to the Cabinet

4.2 On the basis that Calshot would currently require a loan of at least £433,000, the Centre would repay this over a 10 year period, with interest at the current long term rate (say 6%). Indicative repayments are suggested as being in the region of £56,000 for 10 years. The repayment amount must be at a level that is sustainable and will permit the medium term planned minor works strategy of the Centre to continue. It should be possible to contain £56,000 per annum from within the budget.

4.3 Calshot is generally budgeting for approximately £200,000 per annum on such works (See appendix E, and Minor Works Strategy, p51-52 - Business Plan) Assuming that up to £5,000 is available via the new block, in order to service a loan requiring annual payments up to £56,000, Calshot would be required to use £51,000 annually from the minor works budget over a ten year period. This is accepted as manageable by the Centre, still permitting a planned programme of prioritised minor works to be achieved.

4.4 Additionally, the longer term development plan for the Centre is concerned to ensure that Calshot is managed to ensure its future position in the outdoor education, leisure and recreation market. On that basis it may require further access to loans within the next ten years for additional major capital works. Consequently, Calshot would look to minimise the period of loan repayment, if possible.

4.5 The Recreation & Heritage Department capital contribution will be up to £360,000, with the final figure determined during budget discussion. A range of feasible options are being considered, including:

a) a single allocation of £360,000 over one year

b) an allocation of £360,000 over two years

c) an allocation lower than £360,000, requiring a larger loan from Calshot.

Recommendations

1. That the Executive Member, Recreation & Heritage, confirms that the project is a priority for Recreation & Heritage and undertakes that appropriate funding will be found in the form from within the Departmental Capital Programme for the years 2004-06, subject to the other contributions outlined below.

2. That the Executive Member for Recreation & Heritage approves the building of a new accommodation block at Calshot, to begin in the summer 2004, pending the final decisions over capital sourcing.

3. That the feasibility of applying service financed unsupported borrowing be investigated, within overall guidelines approved by the cabinet. It is assumed that this will form a major part of funding this project, subject to a suitable business case being drawn up.

4. That the Centre builds its own contribution to the scheme to £360,000 through transfers from revenue to capital over the two financial years 2003/04 and 2004/05 and accumulated contributions already made.

5. That the Property, Building and Regulatory Department should proceed with full Project Appraisal during November - December 2003, prior to approaching the Executive Member, Policy and Resources, in early 2004.

Section 100 D - Local Government Act 1972 - background papers

The following documents disclose facts or matters on which this report, or an important part of it, is based and has been relied upon to a material extent in the preparation of this report.

N.B. the list excludes:

1. Published works.

2. Documents that disclose exempt or confidential information as defined in the Act.

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