Agenda item

Report attached.

The Cabinet considered a report of Councillor Noordad Aziz, Deputy Leader and Portfolio Holder for Transformation, Education and Skills, updating Cabinet on the successful Swimming Pool Support Fund bid and the additional complimentary works to be undertaken to provide energy saving improvements at Hyndburn Leisure Centre, along with approval to undertake procurement through the use of the UK Leisure Framework.

Councillor Aziz introduced the report and added that the controlling group was championing sustainable projects towards net zero carbon emissions. The project had already attracted interest from two firms working in the energy efficiency sector. However, the Council would use the UK Leisure Framework to procure a development management provider and to deliver a clear schedule of works.

The Council had been partly successful in its Round 2 bid to the Swimming Pool Support Fund for capital funding for this work, although its Round 1 revenue application had been unsuccessful due to the large number of bids submitted.

When completed, the scheme could reduce energy consumption by up to 98,000KwH.

Approval of the report was not considered to be a key decision.

Reasons for Decision

 Hyndburn Leisure Centre (HLC) had been identified as the Council’s highest emitter of CO₂ due to defunct fossil-fuelled plant. Since then, working in partnership with the Leisure Trust, the Council had significantly reduced the CO₂ emissions by 70%, which on an annual basis was around 390 tonnes. This was the biggest single contribution to the Council’s pledge for net zero carbon activities by 2030.

This was achieved when the Council had received £1,988,324 Public Sector Decarbonisation Scheme (PSDS) funding to remove the gas supply and deliver a new electric powered sub-station, air source heat pumps, solar panels, a battery store and new heating controls. Further investment of £375122 had been needed by the Council to cover non-grant eligible costs including re-covering and strengthening the Sports Hall roof to accommodate the solar panels.

The PSDS funding however did not allow for the wholesale replacement of the plant and, as such, there was still equipment working alongside the new, which was inefficient and beyond its life expectancy thus contributing to energy inefficiencies and high running costs of HLC, exacerbated by worldwide energy market conditions. As such more work and funding would be required to replace this aged equipment, if energy costs and CO₂ emissions were to be reduced further.

With the increase in energy costs over recent years, the Government had announced the Swimming Pool Support Fund (SPSF) a year ago with the intention of both helping keep pools open in the face of financial challenges, as well as funding longer-term projects to help reduce future energy bills

The SPSF provided a total of £80 million to local authorities in England as a support package for public leisure facilities with swimming pools and had been split into two phases.

• Phase I - Revenue: £20m was available to support facilities with swimming pools with increased cost pressures, leaving them most vulnerable to closure or significant service reduction.
• Phase II - Capital: £60m was available from the Government for capital investment to improve the energy efficiency of public facilities with pools in the medium to long term.

HLC had faced significant increases in utility costs since 2022, the majority of which could be attributed to the costs of running a swimming pool.

Despite the unprecedented increase in costs and the submission of a competitive bid, the Council had been unsuccessful in its Round 1 revenue application.  However, the Council’s round 2 application had been partly successful, with the Council being awarded £241,447.

The SPSF scheme, funded by Sport England, would build on the PSDS measures to create further energy savings. The interventions with the highest proposed energy saving results would be included in the scheme, as per the terms of the agreement with Sport England. They were:

·         Installation of additional metering and monitoring software;

·         Installation of variable speed fans.

The current fan motors used in HLC’s  air handling units, including those in wet ancillary areas, fell short of the standard efficiency rating (IE1) for their respective sizes, operating at just 84% efficiency. Additionally, the building lacked adequate management controls for its heat pump supply, especially in the subsequent wet areas, and lacked an overarching holistic control system. This deficiency became particularly significant during the winter months when heating demands were higher.

The Chartered Institution of Building Services Engineers (CIBSE) Guide F (2004) emphasised the potential for substantial energy savings (10-20%) through the implementation of comprehensive heating controls and the adoption of energy-efficient fan motors. This would have a projected lifespan of 30 years and it held the topmost priority in future energy reduction efforts for Hyndburn Leisure Centre.

The newly implemented energy controls would complement the recent PSDS investment, enabling seamless integration into the Trend network (building energy management control system). This integration would enable centralised control of the heating systems through an IQview8 control panel. This was essential to future energy reduction and control, as currently this was manually operated in an on-or-off position.

The scheme would reduce energy consumption by 49,000KwH – 98,000KwH based on a modest estimate of reduced heating costs.

Unfortunately, the SPSF grant whilst welcome was only 50% of the bid that was made and therefore there was still going to be inefficient plant remaining at the HLC and thus, along with the risk of it failing, there was a gap in the potential reduction in energy use and subsequently uncertainty regarding CO₂ and cost savings.

The Council had an approved capital programme budget of £525,085, in addition to £241,447 SPSF, making a total of £766,532. This budget had been identified for plant replacement and further energy efficiency works.  This might include upgrading shower water systems, replacing old lighting with LED fittings and upgrading the external lighting to the HLC and car park.

The UK Leisure Framework allowed for the direct appointment of a partner (Alliance Leisure Ltd) for scoping, design, refurbishment, construction and development of leisure centres, theatres, play facilities, recreation facilities and sports facilities across the UK public sector. It also supported the marketing of these types of facilities.

The Framework had been procured in accordance with EU Procurement Regulations by Denbighshire Leisure within Denbighshire County Council (DCC), and after an extensive tendering and evaluation process Alliance Leisure Services had been appointed. The Framework was therefore owned by DCC, but a management board comprising of both DCC Officers and Alliance Leisure personnel had been established to monitor and develop the Framework.

The Framework allowed Alliance Leisure Ltd to enter into direct relationships with organisations to scope, develop and deliver both physical leisure developments and cultural and marketing related services. Importantly, it did not commit the client to undertaking a development but allowed potential projects to be explored, with these only coming to fruition should the affordability prove positive.

The Council had successfully used the UK Leisure Framework on previous projects including Public Sector Decarbonisation Works, 3G pitch replacement and Wilson Sport Village.

The Council was now at a stage where it was required to enter into an Access Agreement to finalise the scope and design for these works and once this had been done the final costings could be agreed.

If approval was given to enter into the Access Agreement the cost to the Council at this stage would be £80,930, leaving a remaining budget of £685,602, to deliver all the required works through a future Development Management Agreement.

The timescale for works under the Access Agreement would be approximately 12 weeks and then it would take a further 12 weeks for development works to be undertaken, with all works to be completed before the 31^st March 2025, which was the deadline under the SPSF grant conditions.

Alternative Options considered and Reasons for Rejection

Other procurement routes – This was not recommended. Use of government approved frameworks was an effective form of procurement. The UK Leisure Framework offered a pre-approved contractor with demonstrable experience in the leisure sector. The UK Leisure Framework also provided a much quicker route through the design and construction phases allowing the Council to ensure it could meet a major condition of the grant award, that work must be complete by the end of March 2025.

Use of other frameworks for procurement – This was not recommended. Whilst there were other frameworks that could be utilised, none offered the specialist industry knowledge, which would combine both the design and construction/refurbishment of the facility with the business knowledge of the leisure industry obtained from the UK Leisure Framework. The UK Leisure Framework also provided a much quicker route through the design and construction phases allowing the Council the opportunity to achieve its major objectives around improving health at a faster pace. This approach was deemed as the most likely route to secure the overall objectives of the programme at the best value to the Council.

Resolved                                    -    That Cabinet:

(1)   Notes the grant award of £241,447 from the Swimming Pool Support Fund to be spent on the energy saving measures identified at Hyndburn Leisure Centre, as per the terms of the agreement with Sport England.

(2)   Agrees the use of the UK Leisure Framework to procure the appointment of Alliance Leisure Ltd to provide development management services in respect of the Council’s proposed investment in energy efficiency works at Hyndburn Leisure Centre, as well as all ancillary and supporting tasks.

(3)   Agrees to enter into an Access Agreement with Alliance Leisure Ltd to scope and develop designs and costs certainty for the proposed works in accordance with the requirements of the UK Leisure Framework.

(4)   Agrees to enter into a Development Management Agreement with Alliance Leisure Ltd to deliver the energy efficiency works, subject to final costs determined pursuant to the Access Agreement being contained within the approved capital programme budget available.

(5)   Agrees the use of the Council’s approved capital programme of £766,532 (including £241,447 SPSF grant) to design and deliver the SPSF and complementary energy efficiency works at Hyndburn Leisure Centre.