Decision details

RESOLVED: That Cabinet;

1.    Noted the inclusion of the scheme in Capital Programme contained within the final budget proposals being considered by Council on 22 February 2023.

2.    Authorised the procurement of services and works and, subject to Council approval of the budget, delegate the award of contracts for the services and works to the Executive Director of Place, Economy and Environment in consultation with the Section 151 Officer and the Portfolio Holder.

REASONS RESOLVED:

1.    To replace end of life heating systems and, reducing risks of failure and improving customer service to leisure centre users.

2.    To mitigate the energy costs of the buildings.

3.    To support the Council’s efforts in meeting the net zero target for 2030 by decarbonising heat and increasing generating capacity from renewable resources.

ALTERNATIVE OPTIONS:

1.    The choices available to the Council are as follows.

2.    Option 1: Do nothing and leave the buildings as they are. This would not enable the Council to mitigate against increasing energy costs, maintenance costs or carbon emissions. There is also a high risk that the heating systems stop operating which will lead to long service disruptions, poor customer service, and reputational harm for the Council

3.    Option 2: Carry out the proposed installation and benefit from a grant of £7.075m, with the savings outlined above.

4.    Option 3: Like for like replacements. This would cost around £1m. The new heating systems would be more efficient, but this would not help as much with mitigating utilities costs. It would theoretically fall within the responsibility of the two operators of the leisure centres as they have full repairing leases. In practice this is unlikely to be secured, as the operators are likely to maintain the increasingly inefficient currently systems until the end of their contract terms rather than take that scale of capital investment. Alternatively, they may simply seek to exit the contracts or renegotiate terms on the grounds they were no longer viable. This option would also mean that Council would lose the opportunity to benefit from a grant to decarbonise the heating systems.

5.    Option 2 is clearly preferable, enabling the Council to deliver good customer service, support its public health objectives, reduce net operating costs, and take a major step forward in reducing its carbon emissions.