Environmental Services The Business Case for Retention of the Parks - - PowerPoint PPT Presentation

Environmental Services

The Business Case for Retention

• f the Parks Nursery

Steve Reynolds

The Parks section of Environmental Services is very proud of the flower displays provided across the Borough; these are recognised as being some of the best municipal displays in the Country.

The quality of the bedding plants used in our displays is a very important factor; having our own nursery has enabled us to maintain high quality as well as growing the exact species/colour required

The current economic climate has forced all local authorities to look at the services it provides and ask the question – “Can the service be provided more efficiently?” Outsourcing the provision of bedding plants and closure of the nursery is an option currently under debate. It is a question of balancing the cost benefits and the risks of

• utsourcing against the current method of service delivery.

There are a number of other factors Members have to consider such as the potential capital receipt if the current nursery site is sold and the future costs of the service.

The purpose of this presentation is to summarise the business plan for the nursery and the potential for increasing efficiency and lowering costs. Members will have heard in the evidence presented that it is our hope to reduce the costs of the nursery over the next two to three years to the point where we will be very close to the projected costs of outsourcing. Beyond that

• ur aim is the make the service equally cost effective.

Nursery Business Plan A Business Plan has been drafted which sets out a number of actions and mini-projects which will reduce the cost of nursery provision and increase efficiency. Currently the nursery supplies the bedding plants to meet the requirements for annual and seasonal bedding. A stock of heritage plants is maintained and cultivated to supply heritage planting throughout the Borough. The nursery has historically worked with local schools, community groups and volunteers to add social value to the business.

New Labour Force

Nursery Business Plan Looking to the future the nursery will deliver the following products and services:

• The growing of plants to meet the bedding

requirements of Scarborough Borough Council;

• The sale of ancillary plants to local plant suppliers;
• The cultivation of heritage plant varieties
• The cultivation of shrubs utilising existing shrub

stock.

• To provide horticultural experience and training to

apprentices recruited through the Borough Council’s apprenticeship schemes;

Nursery Business Plan

• Act as a purchasing partner for local groups and

clients to procure plants, trees and shrubs;

• To work with The BEACH Social Enterprise to enable

youth training and apprenticeship opportunities;

• Enable educational work and visits through

engagement with local educational establishments;

• To work in partnership with other social enterprises to

provide training and work experience to individuals as appropriate.

• Work with local community groups such as In Bloom

and Friends groups.

Nursery Business Plan All of these proposals have been examined in some detail; for example: We have worked very successfully with Basics+ to retail excess plants through their shop at East Ayton to the benefit of all parties. We have commenced growing shrubs in areas of nursery not in use for bedding plants; we have now started to see cost savings through this project. We currently have a number of apprentices who will benefit from training in the nursery.

The need for greater efficiency is focussed on two key areas, these are variable costs (such as utility costs, salaries, overtime etc.) and maximising productivity/revenue. In relation to variable costs a comprehensive review has been undertaken with regards to utility costs with these being driven down over the last two years. More sustainable space heating solutions are being looked at, for example, biomass boilers. With renewable heat incentives (RHI) the capital costs could be repaid in 6 years, attract RHI payments for up to 15 years and significantly reduce gas usage. (Funding is also available for managing woodlands to harvest biomass*)

Biomass Boiler

Overtime costs associated with the nursery have been reduced and the roll-out of 5 in 7 working will reduce this further. There are opportunities within the nursery to maximise productivity within existing capacity constraints. This will allow for a significant increase in the quantity of plants produced and will deliver an additional revenue stream through partnerships such as with Basics+, we have also had interest expressed by other local retailers should we be able to progress increased production.

One aspect of increasing efficiency is a significant shift away from seasonal bedding to more sustainable

• bedding. The nursery is well placed to adapt to these

changing requirements without increasing costs. Indeed, the nursery has access to an almost unlimited supply of shrubs for propagation which can be used to support such initiatives.

Added Value The nursery is committed to delivering added social value from its operations. The site currently employs two individuals with learning difficulties and it is proposed to increase such training opportunities through partnerships with other social enterprises. In addition, through the Grounds Maintenance Plus programme the Council is seeking to secure school’s grounds maintenance contracts (38 schools worth £123,113) by competing, not just on price, but through adding value to these contracts by offering educational visits to the site.

Grass Cutting Operation

• Key Objectives
• Task
• By Whom
• By When
• Growing shrubs from cuttings
• Trial commenced in 2012 which should

reduce costs during 13/14

• Dave Finch/Steve Allen
• 2012
• Maximising use of glasshouse

capacity

• Identify spare capacity and identify most

cost beneficial way of using space

• Dave Finch/Steve Allen
• 2014
• Minimising overtime
• Introduction of 5 in 7 working. Better

alignment of staff levels with growing season.

• Paul Thompson
• 2013
• Maximising use of volunteers
• On-going – recruitment drive to be

considered

• Roger Burnett/Steve

Allen

• 2013
• Review energy consumption
• This has been done in 2012 but will need to

be further reviewed in line with other proposals

• Jeremy Carter/Steve

Allen

• 2013
• Identification of marketing
• pportunities for plants etc.
• On-going
• Harry Briggs/Steve

Allen

• 2013
• Identify opportunities to sell

excess stock through existing retailers

• Sales through Basics+ successful in 2012.

Discussions with other retailers on-going

• Harry Briggs/Steve

Allen

• 2013
• Establish a low-cost

maintenance programme for nursery buildings

• Some preventative maintenance can be

done in-house along with minor repairs etc. Condition of buildings generally good.

• Steve Allen/Asset

Management

• 2013
• Identify potential markets for

“heritage stock” plants

• Further discussions with Begonia society

and other interested societies. Possibility of

• n-line sales to be evaluated.
• Dave Finch/Steve Allen
• 2013

Action Plan

Financial Position Working with Financial Services we have examined the costs of the nursery and compared these with the projected costs of outsourcing. Taking all factors into account, and enabling the redeployment of nursery staff, the cost benefit of outsourcing is reduced to approx £12,000 in 2014/15 based on current budgets. This figure assumes that there is no increase in the cost of plants purchased externally. The above does not include savings or efficiencies arising from the proposals as set out in the business

• plan. These should enable us to close the gap further.

Financial Position It is also assumed that building repair costs remain static. Some information suggests that these costs could significantly increase in future years but our view is that we can minimise these costs by undertaking minor repair work in-house. The replacement of the boilers has been highlighted as a significant risk with replacement boilers costing in the

• rder of £20,000 each. However, work undertaken would

suggest that we move to biomass boilers which could effectively be self-financing and reduce fuel costs significantly (a potential saving of at least £6,000/annum).

Other Considerations An issue which needs consideration is the Dean Road depot relocation project. As part of the project a requirement has been identified for a Scarborough Sub- depot in the town centre area. This is a working base for the street cleansing staff who are pedestrian (using street cleansing barrows etc.) An establishment cost for the sub-depot is budgeted at £20,000 with unknown revenue costs. If the nursery site is retained this could serve as the sub-depot saving the £20,000 capital and future revenue costs.

Other Considerations A further issue is that of the heritage varieties we currently hold and propagate from. If the nursery is closed what will happen to this historically valuable stock? The answer is far from clear. Our discussions with Aldby seem to indicate that they do not wish to look after this stock. It was not part of the framework agreement as this relates only to annual bedding plants so we would need to ensure that it can be properly cared for.

Summary If we can deliver the actions set out in the Business Plan projects outlined earlier I am confident that we will close the “cost benefit” gap of outsourcing by 2015. Retention of the nursery site and the provision of a Scarborough town sub-depot will also make a significant additional saving for the authority.

Summary Whilst it is accepted that retention of the nursery negates the opportunity to realise a capital receipt it should be remembered that in retaining the nursery the asset is retained, albeit in property rather than cash! Given the current economic climate it may be in the best interest of the authority to retain this valuable asset as the current market value is likely to be at a low ebb.