MIDDLESBROUGH COUNCIL

AGENDA ITEM

Report Title: Middlesbrough Teaching and Learning Centre – Training and Conferencing Business Transfer – PART A

Councillor Charles Rooney, Executive Member for Regeneration and Economic Development

Tony Parkinson, Director of Transformation

17 April 2014

PURPOSE OF THE REPORT

  1. To seek approval for the transfer of the Middlesbrough Teaching and Learning Centre (MTLC) business to Middlesbrough Football Club (MFC).
SUMMARY OF RECOMMENDATIONS
  1. It is recommended that the Executive Member for Regeneration and Economic Development agrees Option 2 to transfer the MTLC business to MFC on 1 May 2014.

IF THIS IS A KEY DECISION WHICH KEY DECISION TEST APPLIES?

It is over the financial threshold (£150,000)
It has a significant impact on 2 or more wards
Non Key / X

DECISION IMPLEMENTATION DEADLINE

  1. For the purposes of the scrutiny call in procedure this report is

Non-urgent / X
Urgent report

If urgent please give full reasons

BACKGROUND AND EXTERNAL CONSULTATION

  1. As a result of the proposals to rationalise administrative buildings within the Change Programme, the Council will have no need for the office accommodation on the MTLC site and the disposal of the site is the preferred option. Solutions have been sought to keep the MTLC training and conferencing business in the town. It is the market leader for training and conferencing in the area and supports employment and business activity locally. As a commercial centre, the town would continue to benefit from such facilities.
  1. Meetings were held with local training and conferencing stakeholders both individually and as a group to discuss options to maintain and develop the training and conferencing economy in Middlesbrough. The stakeholders consulted included Teesside University, Erimus, Middlesbrough College and MFC. All are locally based and have training and conferencing resources and interests.
  1. MFC expressed some interest in exploring joint working and the possible transfer of the MTLC training and conferencing business. This would support the continuing development of Middlehaven.
  1. As part of the development of a business case to allow for any such transfer, Heads of Terms were agreed as outlined below.
  • Both MFC and Middlesbrough Council wish to work in partnership to promote economic development in the town and wish to promote a strong training and conferencing business sector as part of the broader economic development strategy for Middlesbrough.
  • MFC and Middlesbrough Council will look at possibilities around the relocation of the MTLC business to the Riverside Stadium to enhance the economic development of Middlehaven and the town centre area.
  • MFC and Middlesbrough Council will explore opportunities for interim joint management arrangements of the MTLC business.
  • Both parties to agree favourable terms for Middlesbrough Council access to the MFC training and conferencing facilities to reflect transfer of business/goodwill and any assets.
  1. A due diligence exercise has taken place in line with the Head of Terms exploring the MTLC business model. This exercise included:
  • Establishing a market value for the business;
  • An independent valuation of the relevant equipment and resources;
  • Ascertaining the proportion of current MTLC business ( both Council and external) that could be accommodated within MFC facilities;
  • Determining the likely future requirements of Middlesbrough Council for training and conferencing facilities; and
  • Consideration of any potential legal implications with regards to staffing and pensions.
  1. The findings of the due diligence exercise and the detail of the agreement is set out in PART B to the report.
  1. Both parties are now in a position to formalise the transfer of the MTLC business from Middlesbrough Council to MFC. A draft agreement is being drawn up with a view to the transfer taking place on 1 May 2014.

IMPACT ASSESSMENT (IA)

  1. A Level 1 initial screening assessment was undertaken and found no concerns that there would be a disproportionate adverse impact on individuals or groups because they protected characteristic. This impact assessment was completed as part of the budget setting process, this was revisited as part of the development of the final detailed proposals and the findings were found to still be accurate, this is appended to the report.

OPTION APPRAISAL/RISK ASSESSMENT

  1. Option 1–Do nothing – Building will close on 30 June 2014

The training and conferencing business may be lost to the town and the wider economic benefit lost (the business may go to neighbouring areas), likely redundancies of training and conferencing staff, possible short term additional costs for training and conferencing events from external providers.

  1. Option 2–Transfer of external MTLC business to MFC

Economic benefit to the wider economy by retaining this business in Middlesbrough with significant opportunities for future growth as part of the Middlehaven development. The Council will be able to deliver the savings identified following the closure of MTLC. This option will also provide access to the re-vamped MFC training and conferencing facilities.

  1. Option 3–Transfer of internal and external MTLC business to MFC

Economic benefit to the wider economy by retaining this business in Middlesbrough with significant opportunities for future growth as part of the Middlehaven development, safeguards the employment of the training and conferencing staff affected. However, the Council will not be able to deliver the savings identified following the closure of MTLC. This option also ties the Council into guaranteeing MFC a level of future business which the Council is unable to fund.

POTENTIAL LEGAL AND FINANCIAL IMPLICATIONS

Financial Implications

  1. The proposal will allow the Council access to achieve its savings target for MTLC as well as receiving consideration for the business.

Legal Implications

  1. The formal transfer agreement will be legally binding.
RECOMMENDATIONS
  1. It is recommended that the Executive Member for Regeneration and Economic Development agrees Option 2 for the transfer of the MTLC business to MFC on the 1 May 2014.
REASONS
  1. Option 2 represents the best value and provides the maximum benefits to the Council.
BACKGROUND PAPERS
  1. No background papers were used in the preparation of this report.

AUTHOR:Kathryn Warnock

TEL NO: 729559

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