The winning London bid for the 2012 Olympic Games will be instrumental for UK sport in obtaining nationwide interest on sporting participation and infrastructure. In the Midlands it has created a unique opportunity, as the Olympics are not just about medals and regeneration in London, but about creating a legacy through investment in sports and leisure infrastructure throughout the regions, securing greater long-term participation in sport.
The Carter Report on Sport, published in 2005, commissioned by Secretary of State Tessa Jowell, identified the need to improve the local delivery of sport. Mirroring this recommendation, Lord Coe, chairman of the the London Organising Committee of the Olympic Games and Paralympic Games, recently said: “We have a unique opportunity that we must not squander to increase participation in sport at community and grassroots levels as well as elite levels.”
One obvious area of opportunity for the regions in respect of sporting participation and legacy is in identifying potential Olympic training camps to form part of the ‘Pre-Games Training Camp Guide’. The requirements and the application process for this have been set out on the London 2012 website and all facilities must complete online submissions by 31 January 2007. Applications will then be assessed regionally and a proposed list of facilities submitted to the organising committee for further consideration.
It is vital that bids for training camp status relate to sustainable projects. Short-term exclusive usage by athletes is insufficient to ensure that investment is viable. A longer- term solution, which would ensure greater sustainability and a regional legacy, is for local authorities and universities to procure facilities jointly.
PFI solutions
Given the probable lack of Government allocated public funding for the wider objectives, ministers may once again have to look to the PFI mechanism to plug the gap. Such schemes have been awarded PFI credits by the Department for Culture, Media and Sport (DCMS).
Recent Midlands leisure PFI schemes include Amber Valley Borough Council’s three-site newbuild and refurbishment scheme and Wolverhampton’s ‘Waterworld’, due to be completed by the end of this year.
Last year the DCMS allocated a sizeable share of £130m PFI credits for combined facility, library and sport projects, but none in the Midlands, and it is unclear whether further PFI credits will be allocated to this sector. At the current rate of delivery, any further PFI credits for community leisure will be too late unless they join with procurements already in progress, such as Building Schools for the Future (BSF).
Stuart Lindeman, the regional director of Education at Partnership for Schools, the body responsible for delivering the BSF programme, has backed the use of BSF to provide leisure continued #+ continuedfacilities for community use. This route has also been recognised by Coventry City Council, which has a current project to relocate a leisure centre to a new leisure development on a school campus, funded by £1.15m from the council and with monies raised by the operating trust through the sale of its existing site, sport lottery funding and charitable donations. Additional bids have been made to the National Lottery and Football Foundation. BSF can open opportunities for this type of initiative.
Local Improvement Finance Trust (Lift) structures are another way in which leisure facilities can be delivered. Sandwell Lift Company’s planned delivery of a leisure site in Oldbury is an insightful example of this.
Private sector help
When questioned on this subject in Wolverhampton recently, Jowell said local authorities should be ringfencing capital receipts through a programme of dispose and rebuild. The National Sports Foundation could offer some funding, but the Government could not necessarily assist by way of capital funding. A suggested solution was to partner with private sector expertise.
Many local authorities have and are doing this, funding PPP projects from their own resources by way of prudential borrowing, estate rationalisation or securing funding from sources such as the Big Lottery Fund or Sport England. Such projects can be very similar to PFI projects in terms of risk transfer, but do not have a requirement for PFI credits and central Government and HM Treasury approval. Examples of this include the Solihull PPP, which is providing and updating two leisure centres.
Cannock Chase District Council, by contrast, is currently procuring a much-needed leisure centre and pool in Rugeley by way of estate rationalisation, but is splitting the design-and-build contract from leisure management. This type of procurement is generally considered to be cheaper, but is not as effective in terms of risk transfer. In respect of building functionality and ‘whole life’ build, it is more efficient if the operator is involved in the design and build of the facility from which it will operate and is pre-paid to maintain and hand it back in a similar condition to its built condition, subject to fair wear and tear.
Herefordshire Council has paved the way for the Royal National College for the Blind to fund a new sports facility, which includes the construction of a Paralympic-size football pitch, funded by building 70 homes as part of the package. The college is also looking to apply for funds from the National Lottery.
Alternatives to PFI
Another form of infrastructure procurement is ‘Design, Build, Operate and Maintain’ (DBOM) which is similar to PFI but usually has no external financing. After the success of the Elmbridge Borough Council leisure scheme, the first DBOM contract to have signed (and in record time), this is a procurement method that has generated a lot of interest in the leisure PPP market.
Many local authorities have let out their leisure facilities to trusts to operate in order to harness business rate relief and VAT benefits, allowing further monies to be invested in leisure. This is often regarded as a short-term measure, with it being difficult for such trusts to secure funding to improve the facilities. A good example of success, however, would be Greenwich Leisure, an industrial and provident society that manages more than 40 public leisure services within the M25.
Hybrid trusts have been involved in PFI and PPP schemes to secure further cost efficiencies. Such delivery has recently been recognised in the Audit Commission’s June 2006 report.
It will be interesting to see how investment will be injected into grass-roots sporting infrastructure in the future and whether funding will be provided by way of further PFI credits (if not in time for the Olympics, at least in time for the post-Olympics demand), or whether other investment vehicles are found. It may be that there will be a further allocation of PFI credits for projects taking a more holistic approach, linking leisure with health, schools, libraries and the arts and thus creating ‘community hubs’.
Whatever the route of investment in sporting infrastructure, something needs to be done quickly to make an impact in 2012 and to aid those keen to deliver a key element of Olympic ‘legacy’ to the Midlands.
Penny Rinta Suksi is a partner at Bevan Brittan
