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Monday, 2nd Jul 2018

Greens to Mayor: listen to Scrutiny on the Arena

Below is a statement from Green Group Leader Eleanor Combley, submitted to the Cabinet meeting of July 3rd. Councillor Combley supports the work of the Council’s Scrutiny committee and calls on the Mayor to go beyond the narrow scope of his KPMG reports, which don’t adhere to government guidelines, and be transparent about what criteria are being used to make his decision.

In his blog the Mayor suggested that 70% of visitors to arenas drive – but this is not a fixed figure and depends entirely on the arena location – for example at Manchester arena, also located by a train station, this figure is just 39%.

The report from Scrutiny (OSM) to Cabinet is attached below Cllr Combley's statement and the key conclusions have been pulled out for reference.

Cllr Eleanor Combley, Statement on Cabinet Agenda Item 6 – Reports from scrutiny commission

I would like to thank all the other councillors, from all parties, who contributed to this process by submitting questions and statements, and the members of the public, who despite the very short notice, managed to do likewise. Most of all, I think we should all be thanking the members of OSMB who went through the reports with a fine-toothed comb and were rigorous in their questioning of all aspects. They broke open the black box of the numbers and as a result brought information into the public debate that had not really seen the light of day before. I highlight a number of our key observations from the reports and the associated process.

  • Greens note that ten out of eleven members of OSMB agreed on the substantive issue that Temple Island is the only viable option for Bristol’s arena.
  • During the Scrutiny process KPMG and council officers confirmed that building the Arena at Arena Island would not impact on the Council’s revenue budget and that there is no funding gap. Building the arena there represents reasonable value, justifies public investment and will not impact on the council wider finances.
  • Greens formally requested in January that the administration share the terms of reference for KPMG’s proposed reports. In spite of a repeated request in March by the Greens these terms of reference were not shared before the reports had been written. Consequently the terms of reference for the reports were inadequately narrow. 
  • In June 2018 KPMG received a £3.2m fine from the Financial Reporting Council for among other things ‘Failure to exercise sufficient professional scepticism’ with its customer. Although KPMG have been explicit in warning of the preliminary and incomplete nature of some of the information they were given to work with, Greens are still not sure that there has been enough appropriate professional judgement in its work for Bristol City Council on the arena location:
    - It has taken at face value YTL’s unsubstantiated commercial forecasts.
    - It has undervalued future assets relating to Arena Island. Importantly the multi-storey car park with a £16m build cost is forecast to have no value in 25 years’ time.
    -  It has accepted at face value Colin Molton’s forecast that BCC will spend £34m on its side of supervising someone else building the arena.
    - KPMG has failed to follow the advice in HM Treasury Green Book guidance relating to sensitivity analysis. This would have meant that a range of possible values (for value added, for costs etc) would have been generated which would have been much more appropriate given the uncertainties and apparent optimism bias of many of the numbers.
    - In spite of HM Treasury Green Book guidance, KPMG has not adequately taken into account social, cultural, environmental, broader economic and risk issues which could then form the basis for appropriate decision making. Regardless of whether the responsibility for this lies with KPMG for exercising a lack of appropriate professional scepticism or with the administration for failing to develop adequate terms of reference, the end result is a report that is of only limited usefulness in the city’s decision making process.
  • In the absence of any systematic decision making criteria for the location of the arena Greens have called on the Mayor to be explicit about what should be these decision making criteria.
  • Greens have proposed a set of decision making criteria on the location of the arena, which they have shared with the Mayor. These criteria are broadly in line with HM Treasury’s Green Book guidance on the evaluation of public sector projects and these criteria can be refined. The Mayor has not responded to these proposed criteria and we would welcome feedback.
  • The Mayor has drawn attention to the carbon footprint of the arena, which I would certainly agree should form part of those criteria. It is worth noting that almost 60% of emissions associated with arenas are due to audience members travelling by car. The mayor and officers have quoted a figure of 70% of audience members traveling by car, however it does not have to be that way. Manchester has a city centre arena right next to Victoria Station, and less than 40% of its audience come by car. Getting the site right, and giving audience members the options of using public transport, walking or cycling, can massively reduce that carbon footprint.

The future is not a destination, it is something we imagine, plan and build, and this decision is one with real impact for the shape of our future, so thanks again to everyone who has so far contributed to, hopefully, getting the best possible decision for Bristol.

Key conclusions from the OSM board’s report to Cabinet (Full report: OSM_arena_VFM_report.pdf)

“It is the considered view of OSM members that;

The existing Arena figures are cautious

The Brabazon Arena figures are optimistic

Insufficient attention had been paid to social value in concentrating purely on value for money

Environmental impact has been ignored in terms of the Filton proposal

An arena for all of Bristol requires accessibility for all and that case is not proven at Filton

The Arena Island proposal is close to being “shovel ready”

The needs for planning, traffic planning and infrastructure at Filton mean the time line is much longer than the Temple Meads proposal

It is disappointing that the only invitee who did not accept our invitation is the Mayor of Bristol. I urge the Mayor to meet with the OSM party leads to discuss our report before concluding his decision

The sale of the land for the university campus at Temple Meads has damaged the economic case for the Arena. The site is now smaller and there is reduced opportunity to boost the economy of the area, part of which forms one of Bristol’s most deprived wards.

Members were encouraged by YTL’s vision for the Filton site, however, there were many details still to be confirmed as the scheme is only at an outline stage. In particular the major caveats in relation to planning permission (the sequential test) and the delivery of essential transport infrastructure.

The delayed publication of Value for Money reports created unnecessary pressures on officers and scrutiny to complete their work

There is little or no time for the Mayor to take note of the views of scrutiny before his decision is published on Monday”

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