DD2425 Expenditure resulting from the closure of The Lodge at CPNSC

Type of decision: 
Director's decision
Code: 
DD2425
Date signed: 
17 March 2020
Decision by: 
Rickardo Hyatt, Assistant Director of Housing and Interim Deputy Executive Director

Executive summary

Following further assessment of the fire risk associated with the external cedar cladding at the accommodation building called The Lodge, located at the Crystal Palace National Sports Centre (CP NSC), the Greater London Authority (GLA) decided to close the building to protect the safety of all occupants and staff on the 7th August 2019.

This Director’s Decision seeks to approve the reimbursement of the financial loss as a result of closing the Lodge that has been suffered by Greenwich Leisure Limited (GLL) who manage CP NSC on behalf of GLA Land and Property Limited (GLAP) and to revise the Leisure Management Contract by Deed of Variation to reflect the closure.

Decision

That the Executive Director of Housing and Land approves:

1. the reimbursement to Greenwich Leisure Limited on the terms as set out in part 2 resulting from the closure of the Lodge at CP NSC; and

2. entry into a Deed of Variation to vary the GLAP – GLL Leisure Management Contract for the operation of the CP NSC to reflect the closure of the Lodge.

Part 1: Non-confidential facts and advice

Introduction and background

Constructed in 1964 to provide accommodation for visiting athletes, coaches and staff, The Lodge is located within the grounds of the Crystal Palace National Sports Centre (NSC) in the London Borough of Bromley. The main structure is clad in western red cedar; it is 13 storeys of which 11 are for accommodation with the top two levels housing water storage tanks for the main centre. There are 85 rooms (144 beds) with the Paxton Suite, an extended facility at ground level consisting of meeting rooms, a kitchen and dining area.

The Lodge was predominantly used by people attending events or taking part in organised sports camps at the NSC with secondary use as inexpensive accommodation for contractors working in London or back packing students. GLA Land and Property Limited (GLAP) has full ownership of, and is legally responsible for, NSC including the Lodge.

After an assessment of the fire risk associated with the external cedar cladding the GLA decided to close the building to protect the safety of all occupants and staff on the 7th August 2019.

Greenwich Leisure Limited (GLL) manages The Lodge and all other sports facilities at the NSC on behalf of GLAP under a Leisure Management Contract dated 1 July 2009 (as varied and extended). This includes managing bookings, invoicing and collecting payments, reception duties, cleaning, maintenance, repairs, security and all other facilities management (FM) services including compliance with all health and safety legislation. GLL is a charitable social enterprise and its mission is to make community services and spaces better for everyone and to improve the health and wellbeing of local communities.

A Deed of Variation will be required to vary the Leisure Management Contract to reflect the closure of the Lodge.

Objectives and expected outcomes

Closing The Lodge on health and safety grounds has led to a loss of revenue for GLL. The areas impacted are outlined below.

Accommodation Bookings

Patrons with bookings scheduled at The Lodge post 7 August 2019 were advised of the closure in a timely fashion. All the bookings were associated with activity within the centre i.e. events or sports camps, therefore the closure resulted in some activity bookings being cancelled.

The Paxton Suite Conferencing Facilities

As it is located on the ground floor GLL have investigated the feasibility of the conference facilities operating in isolation to the accommodation block but have concluded that it is not economical to do this. As an alternative, conferences and other events previously held at The Paxton Suite have been transferred to accommodation available at the GLL training facilities in the main complex.

Staff Implications

Four GLL staff were directly employed in connection with providing services at The Lodge, and some casual staff have been impacted by the closure.

Catering

Baxter Storey is GLL’s catering provider at the Lodge and the main NSC centre. All catering facilities have now been transferred to the main NSC building.

Facilities Management

Initial decommissioning costs and costs associated with mothballing the building including physical security arrangements have been incurred by GLL.

Loss of Profit

GLL has incurred a loss of revenue in accommodation bookings and sports activities which were booked within the main centre resulting in a reduction in profit, which will be highlighted in GLL’s year-end accounts and any reconciliation will be dealt with at that time.

Mitigating Actions

In order to mitigate the costs associated with closure the following action was taken:

• Booking organisations/individuals were advised as soon as possible and signposted to alternative accommodation close by.
• Partners and contractors were advised of the decision at the earliest opportunity so that supplies and services could be cancelled in good time.
• Accommodation mothballed to save on utility, maintenance, cleaning and other FM costs.

Financial impact

In order to compensate GLL for the loss of revenue as a result of the unexpected closure of The Lodge GLAP has agreed to meet their reasonable cost incurred due to the closure, which is detailed in Part 2.

Equality comments

Under section 149 of the Equality Act 2010 (the “Equality Act”), as a public authority, the GLA must have due regard to the need to eliminate unlawful discrimination, harassment and victimisation, and to advance equality of opportunity and foster good relations between people who share a protected characteristic and those who do not. Protected characteristics under the Equality Act are age, disability, gender re-assignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation and marriage or civil partnership status (the duty in respect of this last characteristic is to eliminate unlawful discrimination only).

The closure of the Lodge was a priority to safeguard the health and safety of all who used the facilities. Due to the urgency, no Equality Act impact assessments were conducted but considerations were given to the GLA’s equalities policies and none were breached.

Other considerations

Key risks and issues:

If reimbursement costs are not approved, it will have an adverse impact on GLL’s Profit & Loss account. This is because there will be unexpected costs to meet and a loss of revenue to absorb. The current revenue does not meet the operational costs and the shortfall is met by the GLA. Reimbursement of GLL’s costs of closing The Lodge is therefore necessary to avoid further losses.

The Mayor has made it clear that residential buildings should be safe and closing The Lodge ensures it is no longer a risk to residents, contractors or staff.

There are no conflicts of interest to note for any of the officers involved in the drafting or clearance of the decision form.

Financial comments

This decision requests the Executive Director of Housing and Land to approve the reimbursement to Greenwich Leisure Limited for losses resulting from the closure of the Lodge at CP NSC. GLL will provide documentary evidence to support each expenditure claim.

The expenditure will be funded from the 2019-20 Estates Management budget held within the Housing and Land directorate.

The costs relating to the financial loss incurred by GLL are included in Part 2 of this decision.

Activity table

Activity

Timeline

Enter into a Deed of Variation to vary the GLL Leisure Maintenance Contract to take into account the closure of the Lodge.

 March 2020


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