Agenda item

The Executive recommends that Council approves: 

1.    That a revised capital budget of £31,137,252, as shown in the financial viability assessment at Exempt Annexe 1, be agreed and allocated to deliver a new-build Cranleigh Leisure Centre.

50.1    Councillor Liz Townsend introduced the report and thanked Officers accordingly. The proposal was supported by a viable business case and was aligned with the Corporate Strategy which included improving the health and well-being of residents together with supporting a strong resilient local economy, and a serious commitment to be a carbon neutral Council by 2030. Architects GT3 had led the successful St Sidwell’s Point Passivhaus development for Exeter City Council and subsequently had been engaged by Waverley.

50.2    All Councillors had been invited to be briefed on Passivhaus by consultants, and those that attended had heard the projected significant long-term energy consumption benefits of potentially up to a 70% saving. The Council had taken a cautious approach in its projections and had included a 50% saving in its proposal.  The report showed a significant increase in budget required to progress to the next detailed design stage and Councillors could be assured that the procurement process would fix costs where appropriate and beneficial to the Council.

50.3    It was difficult to compare the initial capital budget agreed in December 2021 with the current proposal. The December 2021 proposal had been based on a traditional build leisure centre. Since then, costs had been negatively impacted by inflationary pressures and the effect of the mini budget in 2022 saw inflation rise to 10.1%. This had caused the cost of materials and associated fees to increase. The revised capital budget of £31.1 million was shown in the exempt Annexe with the use of £18 million capital receipts, section 106 contributions and internal borrowing of approximately £11 million. Greater borrowing costs of up to £18 million had been fully considered against the impact on the Council’s treasury management and the proposal was still within the limit set by the Council in its Treasury Management Strategy.

50.4    Councillor Liz Townsend summarised that the proposal represented a significant opportunity to future-proof the leisure centre in Cranleigh, to build an exemplar accessible low energy and low carbon building, and to continue to provide much needed and valued health and well-being services to residents.

50.5    Councillor Austin spoke against the proposal due to the 50% cost increase on the 2021 feasibility study.  Councillors had been given little information upon which to base their decision and no alternative options had been presented. The report appeared to cite the achievement of Passivhaus certification as the reasoning for the budget increase. Councillor Austin illustrated that the original £20m budget plus actual build cost inflation over the period would be £23m. The additional £8m requested in the proposal before Members could not be accounted for. Councillor Austin had requested details of an alternative option from Officers and had been provided details of a less expensive alternative which provided carbon reduction not far off Passivhaus, with a shorter payback period than the many decades planned in the Passivhaus proposal. Councillor Austin was concerned that the specification could continue to change and consequently, the budget could increase, 

50.6    Councillor Goodridge was concerned that insufficient information had been provided and that there was an absence of alternative options to consider. It was unclear what facility mix the Council would get for its money. Accordingly, Councillor Goodridge proposed that the proposal be deferred until such a time as further information had been made available, seconded by Councillor Austin.

50.7    The Leader spoke against the deferral and expressed dissatisfaction that Councillors had not sought further information from Officers or the Portfolio Holder before the meeting. Councillor Liz Townsend emphasised the urgent need to replace the existing complex due its poor condition and the risk of plant infrastructure failure. The Passivhaus proposal had a favourable 50-year projection and would represent a long-term saving for the Council. The facility mix was based on a full and formal assessment of need, engagement with stakeholders and Councillors had received reports on the matter previously.

50.8    Councillor Martin spoke in support of the deferral as the payback period would be measured in decades. Other options should be considered, an Option B existed, but was not evident in the report, it was understood that option could achieve near Passivhaus design within a significantly better payback period. 

50.9    Councillor Murray spoke against the deferral and explained that he had emailed the Portfolio Holder to seek clarification, and the Portfolio Holder had provided a detailed response which had provided assurance that Cranleigh residents would achieve good value for money. Councillor Merryweather added that the project would pay for itself over time, and the principle factor in the increased budget was inflation.

50.10  The Leader proposed procedural Motion 14.11 (d) to take an immediate vote on the deferral. The Mayor considered that sufficient debate had been heard and called upon Councillor Austin as seconder to speak, followed by a right of reply being afforded to Councillor Goodridge. Councillor Austin cautioned that the proposal was a once in two generation opportunity which the Council could consult on to ensure that the specification was right. No scope of works or specification had been provided for the Council to consider. Councillor Goodridge concurred that consultation should be undertaken on the facility mix to determine the specification first.

50.11  Councillor Hyman raised a point of order in relation to Article 12.2 of the Constitution insofar as not all relevant matters had been considered; and that the report of 14 December 2021 stated that Officers would report back to Council when final costs, the preferred contractor, and precise funding was known. The Monitoring Officer clarified that the amendment before Members was to defer the proposal, and as such was satisfied that Council had sufficient information to vote upon deferral. The Mayor called upon Council to vote. 

The amendment to defer the proposal was lost.

50.12  The Mayor called speakers on the original Motion. Councillor R. Reed stated that she had attended the site visit offered to all Councillors. That site visit demonstrated why a replacement for the leisure centre was needed and the urgency to mitigate the risk of not having a leisure centre in Cranleigh at all. However, it was a concern that the cost was estimated and both the cost and specification should be clearly established before being put to the Council.

50.13  Councillor Hyman was disappointed that some Councillors had been in receipt of an alternative option, which not all Councillors had been party to. Further, he expressed concern that it was unclear whether the Council intended to replicate the proposal for an exemplar leisure centre across its other leisure centres, and if so, how that would be funded. No red-line had been identified, and the report set out a scheme of delegation which would limit Full Council’s role in deciding the final cost and specification. Councillor Merryweather countered that the effect of the report was to establish a red-line. The Monitoring Officer reminded Members that the only recommendation for consideration was the capital budget, as the other matters had been resolved by the Executive.

50.14  At the invitation of the Mayor, the Executive Head of Commercial Services referred Members to the background papers listed at section 19 of the report. The facility mix had not changed since the need was identified in 2019 and accounted for growth of population in the Cranleigh and surrounding area up to the next 30 years. Councillor Hyman raised a point of order regarding Article 12 insofar as paragraph 7.5 stated that the facility mix may change at the detailed design stage, subject to consultation, to reduce build costs. The Leader countered with a point of personal explanation that the paragraph referenced was in fact consistent with the comments made by the Executive Head of Commercial Services. The Monitoring Officer concurred that there was no discrepancy.

50.15  Councillor Munro referenced his own experience regarding Surrey police headquarters and urged that Officers enquire whether the estimates for recently completed leisure centres had proven to be accurate on completion. The Council should be bold and ambitious but lessons could be learned from others.

50.16  Councillors Higgins spoke of the importance of the proposal for local residents and was impressed with the Passivhaus standard. The deterioration of the existing facility demonstrated that the Council should invest in a higher standard and should build a future-proof facility, in so doing, accepting the longer payback period. Councilllor Beaman spoke further in support and highlighted the significant contingency element which would cover any changes to the specification.

50.17  Councillor Cockburn spoke against the proposal and noted that the draft minutes of the Overview and Scrutiny Committee had not reflected its debate on the significant cost of the proposal, moreover, the Committee had not been presented with any alternative option to consider. The Council had a duty to its residents to consider all of the options and all of the information. Councillor Merryweather countered that inflation that was the root cause of the increase in cost. Once the payback period was completed, the proposal would then generate revenue.

50.18  Councillor Clark reminded Members that Council had been informed in 2021 that the leisure centre was coming to the end of its serviceable life and that the 5-year maintenance cost would be in the region of £7m. The Passivhaus specification wasn’t the reason for the cost increase, that element was £2.3m (7.5%) of the overall total. The centre would pay for itself primarily because it would be Passivhaus.

50.19  Councillor K. Reed acknowledged that large capital projects for Councils took a long time to pay back, but the proposal was viable. Furthermore, during the election, residents in the east of the Borough were in favour of a new leisure centre, as were the successful election candidates.

50.20  Councillor Martin emphasised that the 2021 report stated that Officers should report back to Members when final costs, the design, preferred contractor and precise funding arrangements were known. Instead, Members were being asked to increase the budget by around 50% to £31m. The financial analysis made generous assumptions, and the payback period was measured in decades, the Council should consider value for money and other options which could provide a better payback period for less cost.

50.21  Councillor Williams was surprised that some Members had not taken account of the detailed briefing and explanation of Passivhaus that they had been given. Future generations would benefit from the proposal as the current leisure centre comprised 11% of the Council’s carbon emissions. The Executive was clear in its commitment to tackling the climate emergency.

50.22  The Leader was assured by the level of cost control and building assurance that Passivhaus would provide; and emphasised that residents clearly wanted the Council to deliver a high quality sustainable new leisure centre. It was disappointing that despite those speaking in objection, no recommendations had been made by either of the Overview and Scrutiny Committees.

50.23  Councillor Long advised that energy industry regulators stated that the best way of saving money on energy was to ensure that you paid as little as possible by consuming less of it and any compromise on the amount of energy consumed would leave the Council open to inflated energy costs in the future.

50.24  Councillor Townsend summed up and clarified that if there was going to be additional budget that would have to come before the Council to decide.  Future generations should not pay for the environmental mistakes of the past. Members had received sufficient information to be able to make an informed decision, and if Members had wanted more information they could have invited the Portfolio Holder to the Scrutiny Committees to respond to questions, or made a request for information directly.

50.25  The Leader called for a recorded vote, supported by more than 5 Members.

A recorded vote was undertaken by roll call whereupon it was RESOLVED to approve:

1.    That a revised capital budget of £31,137,252, as shown in the financial viability assessment at Exempt Annexe 1, be agreed and allocated to deliver a new-build Cranleigh Leisure Centre.

For (33)

Councillors Beaman, Busby, Clark, Crowe, Davidson, Duce, Fairclough, Follows, Gale, Higgins, Kiehl, Law, Long, Mclean, Merryweather, Mirylees, Morrison, Munro, Murray, Nicholson, K. Reed, R. Reed, Paul Rivers, Penny Rivers, Robini, Spence, Steiger, L. Townsend, P. Townsend, Ward, Weldon, White, and Williams. 

Against (12)

Councillors Austin, Barker-Lomax, Cockburn, Deanus, Goodridge, Hesse, Hyman, Laughton, Martin, Relleen, Staunton, and Sullivan.

Abstentions (0)

Clerk’s note: Cllr Munro left the chamber upon the conclusion of item 8 and did not return.