1. Culture, Leisure & Tourism A way forward

2. Update you on the latest financial position (our key driver for change) Share with you some work we have been doing on Alternative Models of Service Delivery Seek your views on various options Why are we here?

3. Medium Term Financial Plan 4 year period 2016 to 2020 - £52.5m On top of the millions already saved in recent years Target this year £16.3m ( £13.8m savings and £2.5m council tax) Leaves £36.2m to save between 2017/18 and 2019/20 Plus uncertainty following EU decision Funding pressures

4. Culture Staffing reductions, e.g. archives Reduced opening hours (Libraries and Scolton) Implemented new charges such as book reservations Closed TIC’s and moved them in to libraries Community Managed Libraries Changes to the mobile library service Tourism (Destination Management) Staff reductions Significant reduction in marketing and research budgets Savings achieved by adopting new marketing strategy Establishment of Destination Pembrokeshire Partnership Service changes so far

5. Leisure Drive to increase income through increased charges, higher usage and improved programming Staff rationalisation e.g. Leisure Centre Managers Energy efficiency measures Closing certain Leisure Centres on Bank Holidays Improved staff training, customer retention strategies & improved marketing Staffing and contract efficiencies within Beach Management Service changes so far

6. Another £36.2 million to save over the next three years We are fast running out of things that we can do to save money without closing facilities Another way? Is there another way that avoids this ‘death by a thousand cuts’? More to come

7. Alternative Models of Service Delivery (AMSD) What does it mean? It means changing the way that the service is managed and governed rather than directly changing the way the service looks to the customer within our facilities. So, rather than closing facilities or reducing opening hours etc, savings are made through the way the organisation is managed in the background.

8. Alternative Models of Service Delivery There are a number of different models/options but the one thing they all have in common is that the service stops being directly delivered by the County Council and is instead delivered by another organisation. Following a tendering exercise, Winckworth Sherwood (a specialist legal firm) were commissioned to undertake an options appraisal for us

9. The Brief Scope of the options appraisal Adult education Cultural Services Leisure Services Music Service Sports Development Tourism Marketing

10. The Outcomes Outcomes that we want the new model to deliver Reduced cost – Deliver services to the same or better standard at reduced cost Making a full contribution to the Councils strategic objectives and outcomes – e.g. Not just about the bottom line. A more effective way of working - the current model of operation may be restricting the potential of some services to achieve their full potential The right solution for Pembrokeshire – Being mindful of the unique characteristics of Pembrokeshire and the importance of the Pembrokeshire brand in terms of local identity and community perception. The solution should retain or strengthen this identity

11. The Outcomes Outcomes that we want the new model to deliver Statutory obligations – Critical that any AMSD adopted is able to continue to deliver against statute Building and developing partnerships with other parts of the Council and externally Acquiring funding - Any new model should increase these opportunities Ensuring collections are professionally managed and safeguarded Future flexibility - To take on new challenges and to be innovative

12. The Options Culture and Leisure 1. Create a local charitable entity - NPDO 2. Create a mutual or co-operative 3. Create a County Council controlled company 4. Outsource through open competitive tender to private or voluntary sector 5. Stay In-house

13. 1. Local charitable entity The formal name for this would be a Non-Profit Distributing Organisation (NPDO). This option would see the creation of a new charity, which would be independent of the Council. It would have a contract and budget from the Council to deliver services. Existing employees would transfer to the new charity. The charity would be governed by a Board of Trustees, which would include two county councillors. There would be two community advisory groups: one for leisure and one for cultural services.

14. Local charitable entity Advantages ▪ Mandatory business rate relief and other financial benefits (e.g. gift aid, exemption from corporation tax) ▪ VAT savings on sporting and related charges ▪ A single organisation focused on improving services ▪ Opportunity for local Pembrokeshire community involvement (trustees and advisory groups) ▪ Potential to access private finance (e.g. to make site improvements). The amount would depend on the length of the contract. (Please note that facilities are generally in good condition following significant Council investment.) ▪ Opportunities for donations, legacies, corporate sponsorship etc ▪ Easier access to Lottery and grant giving trust and foundations (the majority of which only fund charities)

15. Local charitable entity Disadvantages ▪ The assets of a charity can only be used for charitable purposes (or transferred to another charitable body for similar purposes) ▪ The charity would be an independent organisation. The Council would be able to influence rather than control ▪ Potential difficulties in recruiting trustees with suitable experience

16. 2. Mutual or Co-operative This means the organisation would be owned and operated for the benefits of its members. A co-operative would be owned solely by employees. Strategic management would be by its board. A mutual could be both employee and/or community owned and managed. Both these types of organisation would be entirely independent of the Council and would have a contract and a budget from the Council to deliver services.

17. Mutual or Co-operative Advantages ▪ As a single focused body with significant employee participation. This option could improve employee morale and productivity, as they would own and run the services and facilities. ▪ There have been a significant number of successful mutual organisations created to take over and manage a wide variety of local authority services Disadvantages ▪ Not entitled to have charitable status. Charitable status has many advantages (see Option 1) ▪ Very few financial benefits ▪ Loss of Council control

18. 3. Council controlled company Advantages ▪ The company is separate from but fully controlled by the Council ▪ Potential for business rate relief and VAT saving This option would see a trading company (not charitable) established, which would be completely separate from the Council. It would have its own Board of Trustees, budgets and employees. Existing employees would transfer to the new company. However, the Council would control the company.

19. Council controlled company Disadvantages ▪ Not entitled to have charitable status. Charitable status has many advantages (see Option 1) ▪ Future changes to business rate arrangements could have a big financial impact on the new company. This is to do with the possible devolution of business rates income to local authorities (due to occur in England by 2020). If this occurred in Wales, it would effectively remove business rate relief which is the majority of the saving this option would generate. ▪ Restricted expansion (maximum 20%). This means that the new company is restricted in being able to expand its services (for example by bidding for other contracts)

20. 4. Outsource to private or voluntary sector Advantages ▪ Most of the short-term risk would pass to the contractor ▪ The contractor would be able to access funding immediately (e.g. to make site improvements). The amount would depend on the length of the contract. (Please note that facilities are generally in good condition following significant Council investment.) ▪ If the contractor is able to make the service profitable some form of profit share may be possible ▪ In the case of the voluntary sector, tax benefits are possible. These include NDR (rates) and potential for VAT savings This option would involve inviting organisations to submit competitive bids to take over the running of the services for a fee. The organisation taking over the running of the services could be from anywhere in Europe.

21. Outsource to private or voluntary sector Disadvantages ▪ Profit rather than outcome focus ▪ Desire for increased profits may interfere with the integrity of some services ▪ Any surpluses generated are likely to be invested outside Pembrokeshire ▪ Loss of Council control ▪ Significant negative impact on the Council’s support services (e.g. human resources, ICT etc) ▪ Staff levels and conditions could be adversely affected ▪ Lottery funding / external grants may be more difficult to acquire ▪ Loss of local Pembrokeshire focus ▪ Due to the diverse nature of the services (e.g. museums, libraries, leisure centres, archives etc) a number of different contractors may need to be involved

22. 5. Stay In-house Advantages ▪ Council stays in full control ▪ Easier to work with other Council departments and health service providers to promote health and well-being ▪ Employees remain directly employed by the local authority ▪ Trade Unions prefer this option Disadvantages ▪ Significant risk of closure of facilities, redundancies etc ▪ The only way to continue to generate savings is to cut services / increase charges ▪Full liability for the maintenance of buildings remains with the Council This option would see direct management of the services retained by the Council.

23. The Options Tourism Marketing Option A Create a local charitable entity with a wholly managed tourism subsidiary This option would be as Option 1 above for Leisure and Cultural services but with the addition of a wholly managed tourism subsidiary. It would see the establishment of a new company to manage tourism marketing services. The company would not be charitable. The new company would be managed by the parent Leisure and Culture charity but would have its own Board of Trustees, staff, etc. It would receive initial funding from the Council and contributions from other organisations. There would be an opportunity for the tourism subsidiary to become completely independent in the future.

24. The Options Tourism Marketing OPTION B. Create a stand-alone membership organisation that combines membership services (with tourism businesses) and tourism marketing services This would be a stand-alone company (not charitable) which would receive initial funding from the Council and contributions from other organisations in order to establish itself but would need to generate its own income by 2020.

25. Recommended scope and option Winckworth Sherwood’s recommendation is to: Establish a new locally created charitable entity (Trust) to deliver culture and leisure services with a separate wholly managed subsidiary to manage tourism services Sports development, the music service and adult learning to remain in-house Tourism services are not charitable, hence the separate subsidiary approach.

26. Financial Savings OptionProjected Savings 1. Create a local charitable entity – NPDO Circa £700k (NDR and VAT) plus additional efficiencies and income Potential for donations, legacies, gift aid etc 2. Create a mutual or co- operative Circa £65k (VAT) plus additional efficiencies and income 3. Create a County Council controlled company Circa £600k (NDR and VAT) plus additional efficiencies and income 4. Outsource to private or voluntary sector Circa £600k (NDR and VAT) plus additional efficiencies and income 5. Status Quo£0 plus additional efficiencies and income

27. Savings in context A few examples of the net cost of running some of our facilities to put the savings into context. Leisure Centres Milford Haven £187,000 Pembroke £157,000 Crymych £151,000 Haverfordwest £125,000 Fishguard £226,000 Tenby £160,000 Pembroke Dock Library £91,000 Milford Haven Library £115,000 Pembrokeshire Archives £255,000 Scolton Manor £182,000

28. Consultation period 15 th August to 16 th September Hard copy forms available in leisure centres, libraries, Pembrokeshire Archives and at Scolton Manor Also available online and by email You can hand completed forms in at any of these facilities or email them to: surveys@pembrokeshire.gov.uksurveys@pembrokeshire.gov.uk We will also consult with tourism operators via Pembrokeshire Tourism

29. Questions and Answers