Agenda Item No… REPORT TO:

Cabinet

DATE:

23 September 2009

DEPARTMENT:

Office of the Chief Executive

REPORTING OFFICER:

Chief Executive (Mr W Sampson)

SUBJECT:

MANAGEMENT REVIEW

WARD/S AFFECTED:

All

N/a FORWARD PLAN REF: ___________________________________________________________________ 1.0

PURPOSE OF REPORT

1.1

The purpose of the report is to seek Cabinet’s approval to a management restructure that is intended to give the Council improved co-ordination and a clearer focus on delivery of its cultural, leisure tourism and leisure agenda.

2.0

RECOMMENDATION/S

2.1

That subject to the outcome of staff and partner consultation, Cabinet agrees to combine the following services currently provided by the Department of Community Services and the Harrogate International Centre (HIC) in a new Culture, Tourism and Sports Service to be located within the Department of Development Services:-

2.2

•

The Leisure, Museums and Arts Service within the Department of Community Services.

•

The Leisure Tourism function (including Tourist Information Centres) within the Department of Harrogate International Centre.

That subject to the approval of recommendation 2.1, the Business Support activity within the Department of Community Services that supports the Leisure, Museums and Arts Service, be combined with the Business Support activity within the Department of Development Services.

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2.3

That a target implementation date of 1 April 2010 be agreed for this change.

2.4

That the process to recruit a new Head of Service commences, with a view to having an appointment in place prior to the target implementation date.

3.0

RECOMMENDED REASONS FOR DECISION

3.1

Leisure Tourism has not received sufficient focus, either within the Council or across the District, and as a result there are under-developed opportunities for Leisure Tourism to make a greater contribution to the visitor economy. The Council has, therefore, recently approved a Strategy for Leisure Tourism and, as a consequence, will need to have a significant management focus on this issue, whilst also providing the opportunity to have a more strategic approach to using the Council’s own assets to support improving the leisure tourism offer.

3.2

One of the Council’s key ambitions is driving forward the continued development of Business Tourism and investing in the Harrogate International Centre. There needs to be increased focus by the HIC Department on this, and the transfer of the Leisure Tourism functions from HIC will allow a core Business Tourism focus over the next few difficult years.

3.3

The Head of Leisure, Museums and Arts will be moving to a new position at Bradford City Council and, therefore, this provides a timely opportunity to review the service and how it can be used to support the objectives of both Leisure Tourism and the Cultural Strategy.

3.4

The strategy of the Cultural Partnership is currently under review, and therefore there is the opportunity to strengthen its links to Leisure Tourism and the visitor economy generally.

3.5

There is a need for the objectives of our Cultural, Tourism and Leisure Strategies also to have a stronger economic focus, and transfer of the functions to the Department of Development Services will enable closer working to be developed with functions such as economic Development.

4.0

ALTERNATIVE OPTIONS CONSIDERED AND RECOMMENDED FOR REJECTION

4.1

To leave departmental structures, functions and management arrangements as currently configured and to recruit a replacement Head of Leisure Museum and Arts.

4.2

This is not recommended as it would not be possible under such arrangements to achieve the enhanced focus on Leisure Tourism proposed in the recently approved Leisure Tourism Strategy.

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5.0

THE REPORT

5.1

At its meeting on 21 July 2009, Cabinet agreed a new tourism strategy to be recommended to Council for adoption. Key to success in delivering that strategy will be the way the Council organises itself to make a real difference.

5.2

The Council’s Leisure Tourism activity is currently spread across three departments and two portfolios. •

HIC holds the marketing budget, manages the TICs and provides the interface with key partner organisations including Welcome to Yorkshire, the Harrogate and Dales Area Tourism Partnership and Yorkshire Forward.

•

DCS manages key parts of the local tourism ‘product’ such as the Turkish Baths, Mercer Gallery, the Pump Room Museum and Knaresborough Castle and has a significant role in supporting local organisations and events such as Harrogate Theatre and Harrogate International Festival. It also undertakes marketing activity for Leisure, Museums and Arts.

•

DDS, through the Economic Development Unit and in particular the Market Town Partnership work, is responsible for sourcing funding for new tourism infrastructure.

Portfolio responsibility in this area of work rests with the Leader (for the EDU and HIC activity) and the Cabinet Member for Cultural Services (for activities centred on DCS). 5.3

The need to simplify these arrangements has been articulated in the earlier strategy report. The opportunity to make changes and the proposed timetable for change is influenced:(i)

By the resignation of the Head of Leisure Museum and Arts to take up a new post with Bradford City Council.

(ii)

By the termination of the Highways Agency Agreement and transfer of functions to NYCC which is freeing up capacity in DDS.

(iii)

By the review of the Strategy of the Cultural Partnership which is currently underway, and therefore there is the opportunity to strengthen its links to Leisure Tourism and the visitor economy generally.

(iv)

The opportunity for the Council to improve how it uses its own assets to support the objectives of both Leisure Tourism and the Cultural Strategy.

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5.4

What I am proposing therefore is to bring together two discrete areas of the activity within the Council:•

The Leisure, Museums and Arts Service within the Department of Community Services.

•

The Leisure Tourism function (including Tourist Information Centres) within the Department of Harrogate International Centre.

The intention is that these two areas of activity come together to form a reconfigured Culture, Tourism and Sport service within the Department of Development Services. The reconfigured service will work alongside, and benefit from closer working with the Council’s Property and Economic Development Team. The Business Support activity within the Department of Community Services that supports the Leisure, Museums and Arts Services will be combined with the Business Support activity within the Department of Development Services. 5.5

In formulating the proposals within this report, consideration has been given to whether there is a potentially detrimental impact on the Council’s objectives for Business Tourism, led by the Harrogate International Centre. Clearly, the fact that Harrogate has a large business convention function, means that local circumstances are different to most other local authority tourism functions. As a consequence, Harrogate needs to place greater emphasis on business tourism than most other local authorities.

5.6

Business and leisure tourism functions do serve different markets, with common ground being around the conversion of business tourism visitors into repeat holiday and leisure tourism visitors, and the creation of a consistent branding of Harrogate as a destination. Separation of responsibilities will strengthen, not weaken overall focus on both elements of the tourism agenda and also allow the development of a more integrated branding message. Without this approach there is a greater risk of an underdeveloped leisure tourism function that is prevented from making a more significant contribution to the local economy.

5.7

Furthermore, Yorkshire Forward has recently announced that it will jointly fund the redevelopment of the Exhibition Halls at the HIC. There is, therefore, a need for HIC to concentrate on core business over the next few difficult years, with a focus on the redevelopment of the Exhibition Halls and maintaining its competitiveness in an increasingly difficult commercial environment to strengthen its position as the region’s primary convention destination.

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6.0

HR IMPLICATIONS

6.1

Informal consultation has already commenced with staff potentially affected by these changes and with partner organisations, all of whom have welcomed the Council’s renewed commitment to Leisure Tourism. There will, however, be the need for further formal consultation as detailed structures are developed. An initial meeting has taken place with the Trade Unions to make them aware of these proposals. However, it is my intention to also consult formally with the Trades Unions as the process progresses.

6.2

The proposals within this report reflect a transfer of management responsibilities for the functions outlined, although it is anticipated that there will be opportunities for future efficiencies as detailed structures are developed. An example would be in business support activities. The most pressing need is to agree a way forward in respect of the Head of Service. Agreement of Cabinet to the principles set out in this report and support of the relevant panel of the Human Resources Committee will mean that the position of Head of Service for the reconfigured Division can be advertised and a permanent appointment made to the post. This will then enable the person appointed to work with the Director of Development Services to formulate detailed structure proposals for the new service.

6.3

In the meantime, I have considered, together with the Director of Community Services, the interim arrangements that will need to be put in place when the post of Head of Leisure, Museums and Arts becomes vacant. As a consequence of this, we have invited Lois Toyne, the Museums, Arts and Strategy Manager, to take up the post of Interim Head of Leisure, Museums and Arts pending the proposals outlined above being agreed by Cabinet. Lois has agreed to take on the interim responsibilities.

7.0

FINANCIAL IMPLICATIONS

7.1

The main element of this proposal is the transfer of the LMA Business Unit to Development Services. The turnover of the LMA Business Unit is £5.0m. There is no direct financial implication of this. The transfer will also involve the disaggregation of the DCS Business Support functions including the marketing role. This will be less straightforward but will be cost neutral with some potential for efficiency savings.

7.2

The second element of the proposal is to disaggregate the Business and Holiday Tourism Marketing function within HIC with Holiday Tourism transferring to DDS. The existing total cost of the Holiday Tourism function is £0.5m. The financial arrangements for this are less straightforward because a number of staff in marketing and sales work jointly on both activities as do many of the HIC Management Services staff. The intention is that those senior staff who work jointly on business and holiday tourism marketing would continue to do so and HIC would charge the new leisure culture and tourism business unit for time spent as now. One post working equally on both activities would transfer. The second activity involves the tourist information centres and relevant staff would largely transfer en bloc with the exception of the accommodation booking service (2 posts).

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7.3

In addition to those costs associated directly with holiday tourism there is an apportioned cost of management services staff of £16,050. The relevant work can be absorbed by existing staff within or to be transferred to DDS business support and HIC consider it should be possible to reduce overhead costs accordingly, although this may mean a reduction of one post in this division. The potential saving before any associated costs is around £25,000 per annum which if achieved could be made available to help re-engineer and develop the combined LMA and Holiday Tourism function.

7.4

There will be some costs of the transition but these will mainly be staff time and can be absorbed within existing resources.

7.5

The overall accounting impact would be a £61,000 pa fall in General Fund costs and a £61,000 pa increase in HIC costs. These figures would reduce to £36,000 if a reduction in the overall cost of HIC Management Services was achieved and the funding transferred to the new business unit. The overall impact of these two changes can be netted off so as not to have any final impact on General Fund.

7.6

Finally and importantly if the wider aims of the transfer are achieved it could increase the potential income to the LMA/Holiday Tourism business unit through enhanced use of facilities in the medium term.

8.0

LEGAL IMPLICATIONS

8.1

The recommendations raise no legal issues at this stage.

9.0

RISK

9.1

As with any major change, there are risks associated with this proposal. The risks associated with relocating the functions identified at paragraph 5.4 include ineffective change management, lack of the right skills to lead the new function, reduced staff morale and motivation, and service disruption. This could lead to a deterioration in service standards, and an adverse impact on customers. In addition, it could also lead to the objectives of the Leisure Tourism Strategy not being achieved.

9.2

The risks of a ‘do nothing’ option have also been evaluated, and it is considered that this option would result in insufficient management focus on the Leisure Tourism Strategy. As a consequence, the opportunity to increase the value of the visitor economy would not be maximised.

9.3

Overall, the risk assessment is positive. The risks around making the decision are about taking advantage of opportunities, and they are worth taking because the rewards are high in terms of potential economic impact. The risks are short to medium-term compared to the longer-term risks of not acting. Therefore, it is considered that the risks identified at paragraph 9.1 above can be managed and mitigated effectively through the early appointment of a new Head of Service, robust interim arrangements, effective change management processes, and staff and union consultation and communication.

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10.0

CONCLUSIONS

10.1

Securing maximum benefit from Tourism, both business and leisure, is crucial if the economic prosperity of the District is to be sustained; and developed further. We already do well in this area but we could do better. My proposals are intended to give the Council a sharper focus around the Leisure Tourism Agenda and so help to realise some of those benefits.

Background Papers -

OFFICER CONTACT: Please contact Wallace Sampson if you require any further information on the contents of this report. The officer can be contacted at Harrogate Borough Council, Council Offices, Crescent Gardens, Harrogate, by telephone on 01423 500600 extension 6287 or by email – [email protected]

SUSTAINABILITY ASSESSMENT / POLICY CONSIDERATIONS Implications are Positive Neutral 9 A Economy 9 B Environment Social Equity C 9 General i) 9 Customer Care / People ii) with Disabilities 9 Health Implications iii) 9 D Crime and Disorder Implications If all comments lie within the shaded areas, the proposal is sustainable.

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Negative

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