mclaren leisure centre-service level...

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STIRLING COUNCIL THIS REPORT RELATES TO ITEM 17 ON THE AGENDA

STIRLING COUNCIL CHIEF EXECUTIVE

29 OCTOBER 2009 NOT EXEMPT

MCLAREN LEISURE CENTRE - SERVICE LEVEL AGREEMENT

1 SUMMARY

1.1 The Council currently has a Service Level Agreement (SLA) with McLaren Leisure Centre (MLC) which establishes agreed use of the Centre by McLaren High School and local primary schools and requires MLC to provide quality sports facilities for community use. The current agreement was reached in 2003 and was due to be renewed in 2006, but has not been. However payments to MLC have continued from the Council at significantly increased rates since 2006 with services being received, broadly in accordance with the terms of the 2003 SLA. In June 2009 the Council agreed that a revised SLA was required and that this should be put in place by the end of October 2009.

1.2 Since then discussions have been ongoing with MLC following receipt of their proposal for a new SLA in June 2009. MLC’s proposal would mean that the Council’s annual contribution to the running of the Centre would increase from £327,440 budgeted for the current year to £458,000. This compares to the annual payment of £248,000 agreed in 2003. In addition MLC would require the Council to provide capital investment of at least £170,000 over the next 18 months. Expenditure by MLC is currently running at a rate that is well in excess of anticipated resources with little evidence of real budgetary control, particularly in relation to staffing costs. The Centre is only currently able to stay afloat and meet its other costs by failing to pay outstanding energy invoices from the Council, amounting to almost £100,000. Discussions with the Board and with the Chairman in particular, have failed to get MLC to reduce the cost of their proposals, until last week when a revised proposal based on an annual cost of £430,000 was submitted. The revised proposal was based on a 5 year 2010-2015 agreement and did not address the financial problem for this year.

1.3 As a result, officers have entered into discussions with Stirling Gateway Limited to explore the possibilities of the Leisure Centre being included within the scope of the existing Schools PPP Project as a contract variation. A business model has been investigated which would change the nature of the Council’s support to the Centre. Instead of providing deficit funding as in the past, the Council, through the PPP Provider, would take on responsibility for providing a fully functional building from which MLC would be able to provide sports facilities for community use. The Council would not be involved in

providing direct funding to MLC, but would provide support in the form of a fully operational facility.

1.4 A business case based on this model has been created which would indicate that the revised model could be operated at a cost to the Council that is within existing revenue budgets. The revised model would also provide for life cycle maintenance of the building, avoiding the vast majority of future demands on the capital programme.

1.5 MLC however, have to date indicated that they are unwilling to pursue this alternative model, which would be difficult for the Council to enforce as MLC own the building (the Council owns the land on which it is built). It is evident, however, that the current operation of MLC is not viable, with budget management lacking, and costs growing significantly on a year by year basis, without matching income.

1.6 This report therefore recommends rejection of the MLC proposal.

2 RECOMMENDATION(S)

2.1 The Council is asked to:-

a) Reject the proposal received from MLC of an SLA for 2010-2015 based on annual revenue support of £430,000 to be subject to annual inflation.

b) Instruct officers to continue pursuit of a solution, which can provide services, which are affordable and sustainable within current budgetary constraints. This may include the option of a business model based on a variation to the Schools PPP contract.

c) Instruct officers to bring a further progress report back to Council in December 2009.

2.2 To note that, in setting the capital programme for 2010/11 and beyond, the Council will need to take the requirement for capital investment in McLaren Leisure Centre into consideration.

3 CONSIDERATIONS

Background – McLaren Leisure Centre – Funding and SLA History 3.1 McLaren Leisure Centre was originally built in 1997/9, opening to the public

and the school in 1998/9. The Centre cost £3.6m to build with funding from a variety of sources including Sportscotland and the Lottery. The main funding, however, was supplied by Stirling Council who originally provided the funding in two forms:-

a) A capital grant of £1.94m, based on a “notional capital receipt” created by entering into a long term lease for the site from the Council to the MLC and

b) A capital loan of £510,000 to be repaid with interest by MLC.

The original business case for the Centre envisaged that the Centre would be self financing. As part of the contractual arrangements, however, a User Agreement was set up which confirmed that the Council would make an annual payment for school use of the Centre of £80,000 per annum. This effectively matched the anticipated debt servicing costs due to the Council under the loan noted in Paragraph 3.1 b) above, ie the payments were expected to cancel each other out. School use covered use made of the Centre by McLaren High School to meet PE curricular requirements and use by Primary Schools to deliver the servicing programme.

3.2 The Centre is built on land belonging to the Council. In 1997 the Council granted a 99 year lease of this land to MLC. The lease was amended in 2000 when the current annual rent figure of £5,000 was set. The Centre originally included the following facilities to the public:-

− swimming pool, jacuzzi and sauna

− sports hall

− squash courts

− indoor bowling arena

− climbing wall

− fitness suite

− all weather pitch (small)

Due to lack of demand the squash courts and the indoor bowling arena have been closed over time and converted into general purpose areas. The Centre’s current hours of opening are:-

− Monday, Wednesday, Friday, Saturday 8.00am to 9.00pm

− Tuesday and Thursday 7.30am to 10.00pm

− Sunday 8.30am to 9.00pm.

Callander Youth Project also have a base within the Centre.

3.3 From the early days of operation, however, it quickly became apparent that the Centre would not be able to operate on a break even basis and that the Council would be required to provide annual funding if the Centre was to remain open. This came in the form of revenue funding provided by Community and Children’s Services. In addition the Council accepted that MLC would not be able to service the original loan of £510,000 and this was converted into a grant.

3.4 Over time the financial position of the Centre has slowly worsened, with a larger and larger proportion of its annual operating costs being met by Council funding. The table in Appendix 1 shows the overall level of funding provided by the Council on a year by year basis since the Centre opened.

3.5 During the period since the Centre opened, MLC’s annual accounts also indicate the following:-

a) A significant year on year increase in staffing costs

b) Current income levels are similar to levels experienced in the first full year of operation in cash terms. Income levels fell to a low point in 2006/7, but the last 2 years have seen some success in regenerating income streams.

The graphs shown in Appendix 2 (figures taken from MLC’s accounts) show the following trends over time:-

Council funding support v external income

Staff costs v external income

Total cost v external income

Overall the figures and the graphs show that the Centre has continued to become more and more dependent upon the support of the Council for its financial survival and for its ability to provide services in as broad a manner as it does currently. In particular it is worth noting that costs have grown significantly since 2006/07 with the result that the level of Council support required has increased at a rate that far outstrips inflation.

3.6 Over time the Council and MLC have sought to amend the nature of the original agreement, with the main drivers of change being a need to approve additional support to the Centre and to define more explicitly the nature of the service provided, particularly to the schools. In particular, in 2003 the Council and MLC agreed a three year Service Level Agreement which saw funding increase on an annual basis to £248,000 per annum, index linked. The funding was split into a revenue payment of £226,000 per annum, and a capital payment of £22,000, with a requirement for the Centre to hold the latter in a separate fund, to be built up and used as required, with funding only to be released on the express approval of the Council. The SLA established clearly the level of service provided by the Centre to the Council and to McLaren High School in particular. Although the SLA only ran until 2006, the Council have continued to pay the Centre on the basis of the agreement and, indeed have provided further support as follows:-

a) Increase in the annual revenue grant of £48,000 pa from 2007/8 to cover additional energy costs. An analysis of the Centre’s utility invoices indicates that the Centre has not experienced any real growth in energy costs until the current financial year.

b) Emergency payments of £75,000 to keep MLC solvent in September 2008.

These are reflected in the figures in Appendix 1.

During the current financial year the Council has continued to make payments, which are in excess of those due under the terms of the 2003-2006 SLA. Quarterly payments of £76,000 have been made for the first 2 quarters, with total payments planned and budgeted for the year of £327,440. This includes a capital payment due at the year end of £22,440. However it should

also be noted that the Centre has failed to make payments for utility costs since the summer of 2008 and has only recently paid rent due which has been outstanding for 15 months. Invoices outstanding at the time of writing this report stand at around £100,000. It is evident from discussions with the Centre Board that they do not have the means to meet these invoices. If funding and expenditure patterns continue it is likely that Council funding for the current year will amount to around £470,000, ie funding under the SLA of £327,440, and around £140,000 - £150,000 of irrecoverable debt. This would represent another increase in funding over 2008/9 of around £73,000. (These figures assume that the Council does not receive any further requests this year for emergency funding). In the light of the current position, and the impending decision to be made regarding the future of the SLA, a one-month payment only was made at the beginning of October to cover the current month with a further one month payment made in mid October when officers became concerned that the Centre might be unable to meet its immediate commitments. Similarly, the Council has, to date, held off from pursuing the outstanding debt.

Service Level Agreement – Proposal and Discussions to Date

3.7 As noted above, the existing Service Level Agreement between the Council and MLC originally ran from 2003 to 2006, but has been kept “live” by default over the past three years, with the Council continuing to pay MLC on a quarterly basis, and MLC continuing to provide the specified services in accordance with the agreement. In legal terms, the Council view is that the ongoing payment for, and supply of services has represented an extension of contract. Over the course of this past year, however, MLC have been pressing for a new SLA to regularise the current arrangements. From MLC’s point of view, the move to a new SLA also represents an opportunity for the Centre’s funding to be regularised, or increased, to reflect current financial need.

3.8 In June 2009, the MLC submitted an SLA proposal to the Council. Based on the existing levels of service the SLA proposal identified the following cost elements and proposed funding requirements:-

− Total revenue expenditure £683k

− Estimated external income £225k

− Council revenue funding required £458k

− Capital funding requirements for the building of £120,000 and for the all weather pitch of between £50,000 and £500,000 depending upon the nature of replacement.

The submission also notes a desire to develop the indoor arena at a potential cost of £500,000, with an indication that significant funding for this, and possibly for an improved all weather pitch may be available from external sources.

3.9 Following receipt of the proposals, meetings between Council officers, Members of the School Management Team and Members of the Board and the staff of the Leisure Centre have taken place to discuss the contents of the SLA proposal, both from a financial and a non financial perspective. During discussions Council officers have brought the current economic climate in which Councils in Scotland are operating to the full attention of the MLC

Board. In particular Council officers have noted the increased staffing costs of the Centre over time, and that the MLC’s figures for 2009/10 allow for a 5% inflation factor, over their own 2008/09 budget. It has also been noted that MLC’s expectations of funding are wholly unrealistic with their cost plan representing an increase in expenditure of 60% in just four years. Despite these observations, the MLC had not been prepared to adjust their cost proposal downwards, although they have noted that the capital funding requirement of £170,000 may be spread over 2 years. (The surface of the all weather pitch does, however, require to be replaced as a matter of priority). However, on 16 October 2009 a proposal was received for an SLA for 2010-2015 based on an annual payment of £430,000 ie an increase of £103,000 above current funding levels per annum.

3.10 Discussions on the service and contractual elements of the SLA have, however, been more straightforward. It has been recognised by both parties that these elements of the 2003-6 agreement had largely proved satisfactory and only minor amendments to these elements of the SLA have been required. A copy of the draft SLA is attached as Appendix 3.

Alternative Business Model – Extension of the PPP Project Agreement

3.11 In order to provide the Council with a possible alternative to the current business model for supporting the McLaren Leisure Centre and in light of the unrealistic expectations of the Centre, the Council has undertaken detailed discussions with Stirling Gateway Limited, and their facilities management partners FESFM (Forth Electrical Services, Facilities Management), on the possibility of the Stirling Schools PPP Project Agreement being extended to include the McLaren Leisure Centre. These parties currently already have an on-site presence at McLaren High School. A possible solution would involve Stirling Gateway taking on responsibility for an initial refurbishment of the Leisure Centre, and then agreeing to provide a full Facilities Management (FM) service to the Centre on the same basis and to the same or similar specification to that provided at the school. Under such an arrangement, the Council would need to provide initial capital funding to bring the Centre building and all weather pitch up to an acceptable standard. During the refurbishment, Stirling Gateway/FES would start delivering services to an agreed services specification, which would then step up to a full services specification on completion of the refurbishment works. If necessary the timing of upgrade works could be spread over a longer period, to match Council capital funding availability. Stirling Gateway, would then take on full responsibility for a fully facilitated Leisure Centre for a period to be agreed, but most likely, for a period to match the length of the existing Stirling Schools PPP Project Agreement, ie to August 2039. Under this alternative business model, the Council would pay Stirling Gateway to operate and maintain a fully facilitated building, and directly meet a share of the energy costs, but would no longer make any direct payment to MLC. MLC would then be responsible for running sports activities at marginal cost, from a fully facilitated building. The model would be similar to that recently agreed with Active Stirling in relation to the use of the sports facilities at the Council’s secondary schools.

3.12 Following discussions, with Stirling Gateway Limited an estimate of costs for this model has been developed. Figures are summarised in Appendix 4 and indicate that the model can be funded from within existing budget resources.

The information from Stirling Gateway Limited excludes detail of the initial capital expenditure required to bring the building up to an improved standard. However it must be noted that this capital investment will be required in the building whatever the route forward to be taken. The following points should also be noted:-

− The one-off setup costs of entering into a variation to the Schools PPP contract have not been included, and are not yet detailed. Should these costs require to be met, further work will be required to identify equivalent expenditure that can be capitalised to maintain a neutral revenue position.

− It is assumed that the level of TUPE transfer of staff from the Leisure Centre to Stirling Gateway Limited/FES will be limited to cleaning staff.

3.13 The financial model provided by Stirling Gateway has been based on the Council continuing to support the Centre on the basis of the opening hours of the facility as outlined in Paragraph 3.2 above.

Alternative Business Model – The Key Issues

3.14 The adoption of the alternative business model would remove future risk of significant further investment in the McLaren Leisure Centre building from the Council, by passing that risk on to a third party ie Stirling Gateway Limited. It would also create a financial cap on ongoing revenue support, which previous experience suggests would only continue to grow over time. The alternative, of meeting the current funding demands of MLC is seen as unacceptable. Experience to date would also suggest that MLC will continue to come back to the Council for “deficit funding” on a regular basis.

3.15 The current Board of the Leisure Centre are strongly opposed to this alternative model and are clearly of the view that the proposal that they have placed before the Council is the only one that is operable. Although the Council own the land on which the Centre is built, the site is on a long lease to MLC with 89 years remaining, and more importantly, the building is owned by MLC. The MLC are therefore in a position where they can refuse to co-operate with the Council in progressing such a model. Pursuit of the model will therefore almost certainly lead the Council into direct conflict with the Board, and may also cut across work currently being undertaken with other voluntary groups in the Callander area. Should this be the case, then it is recommended that the Council cease to fund the Centre and pursue outstanding debts of around £100,000. In taking these steps it is essential that the Council commence contingency planning for provision of services to McLaren High School in the event that MLC are no longer able to provide services.

Both in-house legal and procurement advice has been taken to ensure that the alternative option of using a PPP route is practical and deliverable. Advice taken from advisers previously used on the original PPP agreement suggests that similar contract variations have been successfully transacted at other Scottish Local Authorities.

4 POLICY/RESOURCE IMPLICATIONS AND CONSULTATIONS

Policy Implications Diversity (age, disability, gender, race, religion, sexual orientation) No Sustainability (community, economic, environmental) Yes Corporate/Service Plan No Existing Policy or Strategy No Risk No Resource Implications Financial Yes People No Land and Property or IT Systems No Consultations Internal or External Consultations Yes

Policy Implications

4.1 Sustainability. The report raises concerns with regard to the ongoing financial sustainability of operations at the McLaren Leisure Centre.

Resource Implications

4.2 The report seeks Council guidance on the future funding of McLaren Leisure Centre. It is recommended that a proposal to increase annual funding to £430,000 (an additional £102,560) should be rejected, and that an alternative business model, based on an extension of the existing PPP contract be pursued. Whatever way forward is proposed it is clear that capital programme investment in the Centre will definitely be required over the course of the next few years.

Consultations

4.3 Consultation has been held across all relevant Council Services.

5 BACKGROUND PAPERS

5.1 Stirling Council, 30 October 2008, McLaren Community Leisure Centre Financial Support.

5.2 Community and Economic Development Committee, 30 January 2003, McLaren Leisure Centre – Revised Agreement and Funding Package.

5.3 Resources Committee, 26 April 2001, McLaren Leisure Centre – Financial Deficit.

5.4 Resources Committee, 21 September 2000, McLaren Community Leisure Centre – Financial Deficit.

5.5 Community and Economic Development Committee, 31 August 2000, McLaren Community Leisure Centre – Financial Deficit.

Author(s) Name Designation Tel No/Extension

Bob Gil Head of Assets, Property & Facilities Management

(44)2643

Approved by Name Designation Signature

Bob Jack Chief Executive

Date 20 October 2009 Reference


APPENDIX 1

Council Funding – McLaren Leisure Centre 1998/99 to 2008/9

YEAR

£ Annual % Increase

1998/99 96,875 - 1999/00 80,250 -17.2% 2000/01 169,896 111.7% 2001/02 197,685 16.4% 2002/03 199,096 0.7% 2003/04 212.564 6.8% 2004/05 252,520 18.8% 2005/06 257,130 1.8% 2006/07 262,230 2.0% 2007/08 365,672 39.4% 2008/09 397,310 8.7%


APPENDIX 2

Chart 1 : External Income v Income from Stirling Council

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Chart 3 : External Income v Total Costs

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Chart 2 : External Income v Staff Costs

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APPENDIX 3

DRAFT SERVICE LEVEL AGREEMENT STIRLING COUNCIL AND McLAREN LEISURE CENTRE TERMS AND CONDITIONS This is an Agreement between: The Stirling Council, having its headquarters at Stirling Council, Viewforth, Stirling, FK8 2ET (“The Council”), and McLaren Leisure Centre, having its registered offices at Mollands Road, Callander, FK17 8JP for the purpose of the Provider. 1 DEFINITIONS

1.1 The Service: To provide high quality sport and leisure facilities for the

citizens of Callander and surrounding communities and to allow use of the centre at agreed times by pupils and staff of McLaren High School and all of its associated primary schools.

1,2 The Lease: The Lease between Stirling Council and McLaren Community Leisure Centre (Trading) Limited, dated [xx].

2 PROVISION OF SERVICE

2.1 It is a material condition of this Agreement that the Provider shall deliver the Service in accordance with the Schedule.

2.2 The Council regards the contractual requirements as the minimum standards of Service to be met. The Council has an explicit policy of encouraging high standards and the Provider will be expected to show commitment to continual improvement to quality and standards of Service.

3 DURATION

3.1 This Agreement covers the period from 1 April 2009 until 31 March 2012.

4 PAYMENT

4.1 The Council shall provide funding to the Provider on the following basis: Revenue Funding [xx] Capital Funding [xx] TOTAL £[xxx]

All of the above amounts will be uplifted by an inflationary amount each year. All amounts will be paid on a quarterly basis in advance on the basis of invoices from the Provider. The Council requires quarterly revenue financial statements from McLaren Leisure Centre on the year to date and anticipated year end position within three weeks of the following quarter end. A quarterly monitoring statement on the capital fund is required by the Council.

The Centre will required to hold the Capital Funding in a separate fund and it is anticipated this will be built up to be used when required. The Board will propose any use of the fund to the Council in line with agreed priorities and will require (written) approval by the Head of Assets, Property and Facilities Management before any expenditure takes place. Should the Provider make any revenue surplus in the financial year, the surplus will be transferred to the Capital Fund. Priorities for spend against this surplus should be agreed with the Council in advance.

5 PROVIDER’S OBLIGATIONS

5.1 The Provider shall ensure that all of its employees and volunteers who are working with children or vulnerable adults have had an Enhanced Disclosure Scotland check showing no relevant convictions or disclosures prior to their appointment.

5.2 The Provider shall make available adequate training to all its employees to enable them to undertake their tasks competently. Training must, where appropriate, cover child protection practices, policies and procedures or working with vulnerable adults policies and procedures.

6 CONTACTS/NOTICES

6.1 For the purposes of this Agreement the Council’s contact will be Bob Gil, Head of Assets, Property and Facilities Management, or any other such person who may from time to time be nominated and duly notified to the Provider. The Provider’s contact person shall be [xx] or any other such person who may from time to time be duly notified to the Council.

7 INSURANCE

7.1 The Provider shall maintain adequate insurance arrangements at all times including cover for:

7.1.1 Employer’s Liability

7.1.2 Public Liability

7.1.3 Motor Vehicle Insurance

on terms to cover normal commercial risks and may be asked to produce evidence of this cover annually for inspection by the Council.

8 STATUTORY REQUIREMENTS

8.1 The Provider shall be responsible for meeting all statutory requirements in relation to their role as employer and service provider.

8.2 Prior notice to and advice of the Council will be required for any change being proposed to the Provider’s Company, Constitution or Articles of Association.

9 TERMINATION

9.1 Either party may terminate this Agreement in absence of default by giving 6 months written notice of such intention to the other party being signatories to this Agreement.

9.2 TERMINATION BY THE COUNCIL

9.2.1 The Council may terminate this Agreement, outwith the provisions of Clause 9.1 if the Provider:

9.2.2 Commits a serious breach of its obligations under this Agreement;

9.2.3 Persistently fails, after a reasonable period of notice has been given, to provide the Service in accordance with the terms of this Agreement;

9.2.4 Has a receiver appointed or goes into liquidation or passes a notice for voluntary winding up or, in the case of the Provider not being an incorporated company, if the Provider, or any partner, or individual running an establishment becomes bankrupt or apparently insolvent, or signs a Trust Deed in favour of their creditors. It will be an implied obligation of this Agreement that the Provider will immediately advise the Council of any of the events described in this clause.

9.2.5 The Council shall not be entitled to terminate this Agreement in terms of Clause 9.2.2 hereof unless and until they shall have given written notice to the Provider stating the basis of the breach, allowing the Provider a reasonable period of notice to remedy the alleged breach and the Provider has failed to so within the period specified in the notice.

9.2.6 Commits a breach of its obligations under the Lease.

9.2.7 Persistently fails, after a reasonable period of notice has been given, to reimburse the Council for utility costs incurred by the Council on the Provider’s behalf.

10 INFORMATION/LIAISON

10.1 The Provider will participate in joint networking and liaison as necessary in order to ensure Best Value of service provision.

11 COMPLAINTS

11.1 The Provider shall ensure that an acceptable “Complaints and Suggestions Procedure” is in existence and made available to all Service Users.

11.2 The Provider shall maintain a complaints register which will be available on request to the Council.

12 ASSIGNMENT AND SUB-CONTRACTING

12.1 The Provider shall not assign, nor sub-contract, its care responsibilities under this Agreement without the prior written consent of the Council.

13 UNPREDICTED COSTS AND VARIATIONS

13.1 Any variation to this contract must be agreed between the parties and evidenced in writing.

14 MONITORING AND EVALUATION

14.1 The Provider will undertake a user satisfaction survey annually, and provide the result to the Council’s nominated contact officers.

14.2 The Provider shall submit its “Annual Business Plan” or work plan in relation to this Service to the named contact person in the Council in the month of April of each contractual year.

14.3 At the close of each quarter the Provider shall submit that quarter’s statistics to the Council, which reflect the take up and usage of the service and reports against agreed performance indicators. The Provider shall also submit detailed financial accounts showing Income and Expenditure at the end of each quarter.

14.4 Upon request by the Council, the Provider shall consent to the Council’s Head of Finance and Procurement, obtaining a financial reference in respect of the Provider from the Provider’s bankers or accountant. The Provider or Provider’s accountant shall also submit to the Council’s Head of Finance and Procurement an annual statement of accounts including profit and loss accounts and balance sheets. As an alternative, it shall be acceptable for the Provider to submit a copy of the most recent audited accounts.

14.5 There shall be regular meetings, a minimum of twice a year, between the Provider and the Council to monitor the delivery of the services under this Agreement.

15 RESOLUTION OF DISPUTES

15.1 If any dispute should arise between the Council and the Provider in respect of the terms of this Agreement or either party’s rights or obligations in terms thereof both parties and their officers shall use their reasonable endeavours to reach an amicable settlement and working resolution of the matter in dispute as quickly as possible.

15.2 If any dispute is unable to be resolved in terms of Clause 15.1 then the dispute shall be referred to a single independent arbiter mutually agreed by both parties and failing agreement on such arbiter, by an arbiter nominated by the Scottish Society of Arbiters.

15.3 For the avoidance of doubt, if any matter arising out of this Agreement is subject to dispute or referred to arbitration the Provider shall remain responsible for the provision of the Service and the Council shall remain responsible for the payment.

16 CONFIDENTIALITY

16.1 It shall be a term of this Agreement that all documents and information received by the Provider, its employees or agents during or in connection with the performance of this Agreement, from the Council or any person employed by the Council shall be held in confidence. Such documents shall not be disclosed by the Provider or its agents to any other person without the permission of the Council unless a duty to disclose to that person is imposed by Statute or Court Order.

16.2 All staff employed by the Provider shall be made aware of the principles of confidentiality and adhere to them.

17 LAW OF SCOTLAND

17.1 The construction, validity, performance and all other matters arising out of and in connection with this Agreement shall be governed by the Law of Scotland and subject to the exclusive jurisdiction of the Scottish Courts.

This service agreement and the schedule annexed are signed as follows:-

For and on behalf of

McLaren Leisure Centre

Signed …………………………………….. [xxxxx] Print Name …………………………………….. Chair – McLaren Leisure Centre

Board Designation ..…………………………………. Date …………………………………… Place of Signing ……………………………… Witness ……………………….. Print Name ……………………………….. Designation ………………………………..

For and on behalf of Stirling Council

Signed ………………………………….. [xxxxx] Print Name …………………………………….. [xxx] Designation ..…………………………………. Date …………………………………… Place of Signing ………………………………

This is the schedule referred to in the foregoing service agreement between Stirling Council and Mclaren Leisure Centre dated [xxx].

SERVICE SPECIFICATION 1 Introduction

This Schedule sets out the details of the scope of the Provider’s Services.

2 Objectives

2.1 To provide high quality sport and leisure facilities for citizens of Callander and surrounding communities.

2.2 To allow use of the centre at agreed times by pupils and staff of McLaren High School and all of its associated primary schools.

2.3 To ensure that the partnership with the schools is based on trying to achieve the maximum benefit to the schools whilst ensuring that maximum availability is also provided to other citizens during school hours.

2.4 For all parties to strive to achieve a partnership which delivers more because of the positive and constructive relationship.

3 SCOPE OF SERVICE The Service is based at the McLaren Leisure Centre, Callander and other local communities.

4 SERVICE PRIORITY AREAS The project provides services to McLaren High School and its associated primary schools by providing the following:

4.1 The School shall have use of the facilities at agreed times as detailed in the attached appendix.

4.2 The School will have use of the other facilities in a pattern to be agreed at the start of the School session in a planned way, which reflects the current and anticipated curriculum needs of the School. It is recognised that a degree of flexibility will be required by both the School and the Leisure Centre to allow for unplanned changes that occur in the course of the School session.

4.3 The School will have use of the fitness suite: a) As part of the PE curriculum and where users are directly

supervised by School staff and have received a full induction given by School staff to recognised quality standards; And

b) Where pupils are in either 5th year or 6th year, have received a full

induction given by School staff, are on an agreed list of pupils as provided by the School, who are authorised for use of the fitness suite at approved periods. Pupils using inappropriate behaviour within the fitness suite will be reported to the School and asked to leave the fitness suite. The School and the Centre will agree an appropriate protocol with regards controlled access and egress.

4.4 The School will give notice, in writing, of the intended use of the facilities

prior to the commencement of the first term of each School session. The pattern for the School year will be agreed at the start of each School session.

4.5 It may be necessary, from time to time, that the School will require dry changing space beyond that provided through changing rooms 1 and 2. If required, further changing accommodation could be provided through changing rooms 3 and 4, by prior arrangement.

4.6 The School and Leisure Centre staff will endeavour to ensure that the centre’s facilities are used in an appropriate manner.

4.7 Shared storage space will be made available to the School for the purpose of storing equipment.

4.8 The School shall have use of a dedicated area within the leisure centre, for the purpose of a PE subject team office, this area being at the northern end of the ground floor, currently being used for this same purpose. This arrangement may be changed, subject to the agreement of both parties.

4.9 School pupils will only have access to the Centre during break and lunch periods where:-

• They are supervised by School staff; or • They are using the facility as Centre members; or • With the permission of the Centre Manager.

The exception to this will be the all-weather pitch, where the School shall have priority use as noted in Appendix 1.

4.10 Staff will have use of both priority and non-priority areas as noted in Appendix 1.

5 RESPONSIBILITIES OF ALL PARTIES

5.1 Where the School has priority use due consideration will be given to the programming requirements of the Provider, subject to curricular demands. Similarly, the Provider shall seek to accommodate School needs in areas where the School has non-priority use, subject to community demand.

5.2 The School will employ a suitably qualified Centre Manager and other staff, as appropriate. Any proposed staffing structure changes during the course of this Agreement shall be notified in writing to the Council (normally by receipt of Minutes of Board Meetings).

5.3 In addition to the School’s own responsibility for health and safety, staff and pupils must obey all Health and Safety rules as set or directed by the Centre.

5.4 Procedures and standards of maintenance and cleaning should be consistent with those of Stirling Council to ensure appropriate safety and hygiene for School users.

5.5 Centre staff are entitled to bring to the attention of pupils any breach of the rules of the centre. Problems arising from the misbehaviour by pupils should be reported to any teacher on site or to the Principal Teacher of PE. Centre staff should attempt to clarify the identity of the pupils concerned. Serious incidents should be reported to a member of the School’s Senior Management Team.

5.6 The Centre reserves the right to remove a pupil or staff member from the Centre where behaviour does not comply with the agreed code of conduct as noted above.

5.7 Responsibility for the behaviour of pupils using facilities will at all time be the responsibility of McLaren High School during the School’s defined hours.

5.8 If the Schools have concern over the behaviour of a member of Centre staff it should be brought to the attention of a member of the Centre Management Team.

5.9 The agreed procedure for the proper use of the School’s entrance door to the centre will be adhered to, at all times. It is the responsibility of the School to make suitable arrangements to ensure the entrance’s proper use to be agreed with the Centre Manager. In the event that agreement cannot be reached, the pupils and staff must use the main building entrance only.

5.10 A member of the School’s Senior Management Team will attend Board Meetings of the McLaren Leisure Centre (Trading) Limited, in the capacity of Advisor on matters relating to the School.

5.11 The School and Leisure Centre staff will endeavour to ensure that the Centre’s facilities are used in an appropriate manner and as an educational environment for enhancing social behaviour. This should comply with the agreed code of conduct to be adopted by both the School and the Centre, and to be appended to this SLA.

5.12 In recognition that the final responsibility for safety lies with the Centre, any breach of Health and Safety rules or procedures within the Centre which is committed or reported, should be dealt with by the appropriate organisation’s disciplinary procedure ie by Centre disciplinary procedures if Centre members of staff are involved and School disciplinary procedures if pupils or staff are involved. Both parties will provide evidence to inform each other’s procedures. The outcome will be shared on a fully confidential basis. If either party is dissatisfied with such an outcome then an attempt must be made to ensure the cause of the dissatisfaction is identified and a resolution sought.

6 SANCTIONS AND REWARDS

6.1 Damage: Any malicious damage caused by pupils will be paid for over and above the normal SLA fee. The Centre will be required to produce reasonable evidence that the damage has been caused by a School user rather than by a third party. The Centre will attempt to minimise the repair costs by use of appropriate contractors and materials, and times for repairs, which keep costs to a minimum. Any charge levied as a result will reflect normal wear and tear of the building. The PE staff should examine each area at the end of its use during the day, including changing rooms, and bring damage, malicious or otherwise, to the Centre management’s attention during that day. The staff of the Centre must bring such damage to the School’s attention as soon as noted, or at the end of the School use that day or early the following day.

6.2 Success In The Relationship: where a whole term passes without incident, a suitable celebration will be created jointly by the school and the centre. Centre staff will provide a special sports “treat” as a reward eg a draw for a climbing wall session, for one pupil of each gender, of each year. Where a whole year passes without incident, the Centre will provide a special event and a suitable prize to be awarded to the School.

APPENDIX 1 To The Schedule 1 The School shall have priority use of the swimming pool and associated wet

changing rooms from 9.00 am to 3.30 pm, Monday to Friday during the School session, and shared use from 7.30 am on the days the centre is open early.

2 The School shall have use of the swimming pool and associated wet changing area from 3.30 pm to 5.00 pm on three days per week during School session, these days to be fixed and agreed with the Centre Manager.

3 The associated primary schools shall have priority use of the swimming pool and associated wet changing area, for two and one half days per week, during the Summer term, times and details of which to be arranged to suit the leisure centre, McLaren High School and associated primary schools. Information on the primary school swimming programme will be supplied by the preceding December. Where class sizes are of 20 or more, the associated primary school classes will have exclusive use of the pool, classes of less than 20 will be joint use with the public, or the School.

4 The School shall have priority use of the sports hall and dry changing rooms, numbers 1 and 2 from 9.00 am until 3.30 pm, Monday to Friday during School session, and from 3.30 pm to 5.30 pm Monday to Thursday each week during the School session, for inter-school fixtures and other extra-curricular activities. These special activity periods, by prior agreement with the Centre Manager could be further extended, provided that there are no prior bookings.

5 The School shall have priority use of the all-weather pitch and dry changing rooms numbers 1 and 2 from 9.00 am until 5.30 pm, Monday to Friday during School session.

6 The School shall have non-priority use of other facilities as noted below.

7 For the avoidance of doubt, all areas will be treated as non-priority areas on School in-service days.

DEFINITIONS School Pupils and staff of the McLaren High School Associated Primary Schools Pupils of all associated primary schools for McLaren

High School Facilities – Priority Use - Swimming Pool - Sports Hall - All-weather Pitch - Dry changing rooms 1 and 2 (south end of 1st floor) Other Facilities – Non Priority Use - Fitness Suite - Dance Studio/Indoor Arena - Climbing Wall


APPENDIX 4 MCLAREN LEISURE CENTRE (revenue budget only) Current Budget (2009/10) Expenditure 2008/9 Expenditure 2009/10 Stirling Gateway Limited Leisure Centre Proposal (estimate - Note 1) Note 2 2009/10 (submitted in June)

327,440 397,310 465000 PPP Unitary Charge: Total Spend 803000 FM Less: Life Cycle Capital Upgrades 120000 Management External Income 225000 PPP Unitary Charge 201300 Add: Energy (75%) 81750 School Lifeguard 11500 Fitness Suite (50%) 6000

£327,440.00 £397,310.00 £465,000.00 £300,550.00 £458,000.00 Notes

1. Estimate 2009/10 includes quarterly grant as at present, plus end of year capital grant at £22,440, plus assumption that centre will continue not paying energy invoices Figures to date indicate that the Centre may well come back to the Council before year end seeking further "emergency" funding.

2. Scenario assumes initial upgrade funded by Council. Without full initial upgrade life cycle allowance would be higher. Have assumed Council meets 75% of energy costs pays for a lifeguard during school hours, and meets half the cost of the fitness suite for lease of equipment Unknown Level of initial capital expenditure required. This analysis is of revenue expenditure only.

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