Gunnersbury Park Estate Ealing and Hounslow Full Business Case For

Gunnersbury Park Estate

Full Business Case for Future Governance Structures

Author: David Lillicrap Version: 03 Final Date: 14th September 2014

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DISTRIBUTION LIST

Name Role Action Required (Sign-off / Feed Back) Keith Townsend Ealing Council - Executive Sign-Off Director Customer Services Brendon Walsh Hounslow Council – TBC Sign-Off Alison Reynolds Ealing Council - Director of Feed Back Customer Services Carole Stewart Ealing Council - Assistant Feed Back Director, Arts, Heritage and Libraries Chris Bunting Ealing Council – Assistant Feed Back Director Leisure Chris Hartnell Ealing Council - Head of Finance, Feed Back Environment and Customer Services Liz Chiles Ealing Council - HR Business Feed Back Partner Bridget Gregory Ealing Council - Project Manager Feed Back - Gunnersbury Park Project Jackie Adams Ealing Council - Head of Legal Feed Back Planning & Property Catherine Taylor Head of Legal (Litigation & Feed Back Contracts) Sarah Ruane Hounslow Council - Head of Feed Back Preventative Health and Leisure Richard Gill Hounslow Council - Gunnersbury Feed Back Development Manager Benita Edwards Hounslow Council - Principal Feed Back Lawyer; Property, Planning & Contracts Team Katy John Hounslow Council - Head of Feed Back Business Development Paul Gulley Hounslow Council - Head of Feed Back Finance & Resource Planning Samantha Grey-Wilson Hounslow Council - Finance Feed Back Manager

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VERSION CONTROL

Issue Date Author Reason for Amendment No. 01 14/07/2014 David Lillicrap Initial Draft for Comment 02 17/08/2014 David Lillicrap Draft for Feedback at Working Group 03 14/09/2014 David Lillicrap Final Draft for Cabinet 04 25/09/2014 Richard Gill Final Draft for Cabinet (Hounslow)

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CONTENTS

1 EXECUTIVE SUMMARY ...... 5 2 CONTEXT OF THE GUNNERSBURY PARK PROPOSALS ...... 6 3 OPTIONS APPRAISAL ...... 14 4 DETAIL OF THE RECOMMENDED OPTION ...... 17 5 LEGAL IMPLICATIONS ...... 21 6 STAFFING IMPLICATIONS ...... 22 7 FINANCIAL IMPLICATIONS ...... 23 APPENDIX A – RISK LOG ...... 24 APPENDIX B – CASE STUDIES ...... 26 APPENDIX C – IMPLEMENTATION AND TRANSITION PLANS ...... 32 APPENDIX D – CURRENT STAFF DETAILS ...... 34 APPENDIX E – INCOME AND EXPENDITURE BREAKDOWN 2013/14 ...... 35 APPENDIX F – CURRENT GUNNERSBURY GOVERNANCE STRUCTURE ...... 36

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1 EXECUTIVE SUMMARY

1.1 Introduction Gunnersbury Park Estate is funded and administered through a joint management arrangement between Hounslow and Ealing Councils. The size and complexity of the 2026 project demands a new structure to be in place for its operation into the future, as the current situation, for a range of reasons, needs to be refined.

This Business Case presents the case for the New Governance structure.

1.2 Terminology For the purposes of this Business Case, Gunnersbury Park Estate refers to the Park, the museum and all other buildings and structures within the park that are currently managed by Hounslow through the Carillion contract, and will be managed by the new governance structure. Where reference is made to Gunnersbury Park, this refers to the park, and excludes the buildings and structures.

1.3 Summary of the Options Appraisal Detailed Legal and VAT advice was sought to review the possible options for the governance of the Gunnersbury Park Estate. The conclusion of the options appraisal was that a Charitable Fundraising Trust (termed Development Trust), together with a Community Interest Company (CIC), was the optimum operating model to meet the various requirements the two Boroughs, and other key stakeholders had for the future Governance Model.

1.4 Benefits The Benefit of the proposed approach is that it provides a greater degree of freedom for the park to operate in a commercial manner, while at the same time enabling the two councils to retain a sufficient degree of control of a large open space. It also minimises the VAT implications arising from receiving funding from 3rd party sources.

1.5 Outline Timeline Following Cabinet decisions, the CIC will be established in early 2015, with the CIC taking over responsibility for running the Gunnersbury Park Estate in 2017.

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2 CONTEXT OF THE GUNNERSBURY PARK PROPOSALS

2.1 Introduction to the Business Case Ealing and Hounslow councils have worked closely together since the project inception in January 2011 with both councils committing c£5m each towards phase 1 of the jointly agreed Gunnersbury 2026 Masterplan which focuses on the Gunnersbury Park Museum and Heritage Core Parkland.

The journey throughout has been collaborative with councils, stakeholders, the Friends of Gunnersbury Park and Museum and community being actively engaged and consulted bringing hearts and minds together to develop plans that will achieve the vision for the park and museum. The strategy to make two applications to the Heritage Lottery Fund for a Parks for People and Heritage Grant was agreed early in the Master Plan Development and it was agreed they should run in parallel as the museum and park are fundamentally linked. Throughout the development stage, the team have addressed the museum, park buildings, landscape and structures holistically so both projects are fully integrated to ensure we achieve transformational change at Gunnersbury Museum and Park.

Following the procurement of the multidisciplinary team there have been regular Project team and Project Board meetings, design meetings, client meetings and other work streams to ensure the development of this complex project meets all the aims and objectives. The Project Board involving the lead Executive Directors and elected Portfolio Holders from both boroughs and a Director from English Heritage has steered the team approving designs, budgets and project gate reviews. They have challenged the team and demanded a bold approach to ensure the scheme is high quality and transformational. The team have responded and embraced this project with enthusiasm and commitment and have worked closely together to ensure both projects meet the goals and ambition of both Councils and the Heritage Lottery Fund.

Gunnersbury Park Estate is funded and administered through a joint management arrangement between Hounslow and Ealing Councils. The size and complexity of the 2026 project demands a new structure to be in place for its operation into the future, as the current situation, for a range of reasons, needs to be refined. This document presents the Business Case for the future Governance of Gunnersbury Park Estate, both during the delivery phase and for the on-going operations.

2.2 Vision The agreed vision for the museum and park is: ‘Gunnersbury Park and Museum will be a vibrant, creative community hub and a leading visitor destination: a place of enjoyment, discovery and learning. Engaging local, national and international audiences through its historic house and park land, extensive museum collections and inspiring programmes of events and activities.’

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2.3 Background Parks Agency 2004 Report The Parks Agency was commissioned to produce an Options Appraisal in 2004 and identified a set of core difficulties arising from this arrangement:  Split responsibilities can lead to uncertain leadership and a lack of a clear and strong vision;  Site management and investment is not be seen as a high political priority in either authority;  Disagreements occur over budgets and the Park consequently suffers the lowest common denominator effect - if one party cuts the budget, the other follows suit, doubling the effect of resource starvation;  Frequent changes of member involvement lead to a lack of continuity in understanding, strategic vision and management aims;  Sites on boundaries of local authority areas receive less attention and priority than those at the centre. The Options Appraisal recognised that past attempts to overcome these drawbacks have not worked and recommended that: The owning councils determine to put the freehold of the whole site into an independent charitable trust with provision for council representation on it as well as others across interests in heritage, the arts, education, sport and commerce. The ‘Gunnersbury Project’ is announced with a set of guiding principles aimed at realising the potential of Gunnersbury Park Estate across a wide-ranging agenda. A wholly owned operating company is formed and a Director of Development is engaged to take the project forward as a dedicated Project Champion. The councils covenant their current or raised levels of annual investment to the operating company via the trust, index-linked for ten years. Other Strategic Context The Museums, Libraries and Archives Council’s (MLA) 2010 Report ‘The Opportunity of Devolved Governance for Museums, Libraries and Archives’ states that forward thinking local authorities are already seeking to develop ‘new’ delivery models for their cultural services, including:  Strategic commissioning (Suffolk)  Jointly commissioned services (Colchester & Ipswich Museums, Tyne & Wear Museums)  Integrated and co-located services (Sport & Culture Glasgow)  Devolved services (Luton, Wigan)  Organisations such as English Heritage are also considering Joint Vehicle arrangements for future governance. There is also a great deal of evidence to suggest that local authorities are innovators in terms of new models of governance and management, with many examples of Joint Venture and collaborative approaches between authorities. Much of this is driven by a need to offer a quality service, whilst exploiting economies through joint commissioning or sharing of services. Gunnersbury Park is funded and administered through a joint management arrangement between Hounslow and Ealing Councils. The size and complexity of the 2026 project demands a new structure to be in place for its operation into the future, as the current situation, for a range of reasons, needs to be refined. Future sustainability/Long term viability – need to prove we have a long term viable business plan and governance strategy for the park that gives a new economic purpose, creates income and significantly raises the aspiration for this special place Since the concept stage there has been a standing item on the Project Team and Project Board agenda for governance as it was realised from the outset of the Gunnersbury 2026 Master plan that governance was at the heart of the future success of the museum and park. During the development stage governance options were explored and in January 2014, the respective Cabinets of Ealing and Hounslow agreed a recommendation from the Gunnersbury Park Project Board, that a JV Company was the

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preferred governance model for the on-going management and operation of the Gunnersbury Park Estate. They agreed all financial and legal implications of a JV company should be thoroughly tested and a business case brought back to Cabinet for approval. In order to develop the governance model for Gunnersbury Park Estate, from the preferred model, the two Boroughs have established a Governance work-stream. The work-stream team includes Legal, Financial, HR and Heritage specialists from both boroughs. In addition the team has accessed independent legal, financial and other specialist advice, where necessary, to move from the current high level preferred option to a fully articulated operating model to the governance of the Park.

The scope of the work-stream developed more robust detail, and will manage the implementation of the following aspects:  Establishing the Development Trust  Developing and establishing the CIC Vehicle  Articulating the relationship between the Charitable and Delivery arms of the future governance model It will undertake the following:  Formulate the detailed operating model for both the CIC vehicle and its relationship with the Development Trust  Investigate and fully understanding the risks associated with the preferred governance model to ensure that there are no risks that might prevent the CIC company from achieving the Parks aims and ambitions  Overseeing the refinement of the Business Plan

The aim is to return to the two boroughs Cabinets with a comprehensive model in October 2014. The Governance work-stream team is cognizant of the issues around entrepreneurism and we believe this will be mainly mitigated by the recruitment of a talented CEO for the CIC. The team will also work on refining the board structure of the CIC in order to ensure the optimum balance of dynamism, entrepreneurism, and council over-sight; to mitigate the concern that was expressed over the initial Board model. Again the recruitment of board members of sufficient calibre is crucial to the successful operation of the CIC and this will be uppermost in our minds when recruiting.

2.4 What is Planned for the Redevelopment of the Site Ealing, and Hounslow Councils are planning to deliver though the project the following aims and objectives for the museum and large mansion  A significant increase in the number of exhibition galleries, and to increase the artefacts on display from the current estimate of 600 to some 3,000, under taking remedial conservation where required  Improve storage, some of which will be “accessible stores” into which visitors can be admitted  Conserve the significant heritage asset and contribute to its increased sustainability by: restoring and conserving the building fabric, including the roofs, exterior facades, and the historic interiors; renewing the services within the House to ensure that the Museum can be run cost effectively and efficiently with modern services; and improving visibility and conservation of the principal rooms  Reconnect with the surrounding landscape  Provide a new learning centre with improved opportunities for schools and other groups especially adult learners, BAME groups and families

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 Enhance the interpretation to tell the story of local communities, the story of the Gunnersbury estate and to make explicit the Museum’s role as the local Museum for Ealing and Hounslow boroughs  Develop Exhibition Design that appeals to a wide range of audiences of varying ages, social classes and ethnic backgrounds  Provide a lively programme of special exhibitions in an enhanced gallery  Encourage greater involvement of volunteers with the collections and community participation  Provide sufficient income / resources to ensure the collections and heritage assets remain adequately maintained and cared for  Create employment and training opportunities during the conservation process and provide ongoing employment, training and education opportunities once the project is complete.

And for the Park the project aims to:  Transform Gunnersbury Park to increase the range of audiences and number of visitors to 1 million per annum  Restore the Parks unique heritage features and open up the centre providing newly accessible space  Remove listed Park structures from the ‘At Risk’ register  Restore historic parkland setting for the Mansions  Restore the Orangery  Recreate the west section of the Horseshoe Lake  Provide an excellent new catering facility to replace the old cafe  Relocate the Pitch and Putt  Provide and maintain an excellent range of facilities, activities and attractions accessible to all  Offer boating, pond dipping, improved toddler play, nature trails, podcasts and a community garden  Install new wayfinding and signage  Revitalise the Park through community engagement, participation and learning activities on themes of heritage, horticulture, wildlife, fitness and play  Increase the number of volunteers  Empower local people with skills and knowledge by working with the Museum and Capel Manor to transform the public perception of the Park as a special place with opportunities to enjoy learning  Conserve the Parks natural spaces and wildlife, protecting and enhancing biodiversity  Improve visitor understanding through interpretation.

These aims are at the heart of the scheme that has been developed over the last 18 months and are also designed to meet the HLF priorities to:

 increase the range of park visitors and audiences  conserve and improve the heritage value of the park  increase the range of volunteers involved in the running of the park  increase knowledge and skills for all those involved in the park  improve management and maintenance of the park

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2.5 Scope of the Business Case

2.5.1 In Scope The Business Case summarises the options appraisal and presents the non-cashable benefits and dis- benefits of the recommended approach, together with any relevant financial implications. The Business Case, specifically covers the Governance Arrangements, for on-going management of the Gunnersbury Park Estate site.

2.5.2 Out of Scope The Business Case does not present the Business Plan, this is covered in a separate paper prepared by Barker Langham It does not represent a Business Case for the overall Programme of work.

2.6 Outline of the Overall Gunnersbury Park Estate Programme Gunnersbury Park Estate is currently in Phase 1 of a three phase development programme. Gunnersbury Museum and Park is jointly owned by both Ealing and Hounslow councils. Both Councils adopted the Conservation Management Plan (CMP) for Gunnersbury that confirms the national significance of Gunnersbury and concluded that if action is not taken the heritage will be eventually lost to future generations. A report to Cabinet 8th November 2011 agreed that a Master plan with a cost estimate of £48 Million should be progressed within the guidance of the CMP in three phases. Table 1, Below, summarises the overall programme of work, across the three phases.

Phase 1 Phase 2 Phase 3 Buildings Large Mansion Small Mansion –repairs Remaining Structures restoration and refurbishment and Sport Museum Development Temple Small Mansion – critical Lodges repairs Walls Stables Landscape Priority Heritage Parkland ‘desirable’ ‘Other’ Parkland Parkland incl Orangery Including Potomac Lake projects, including: and Café repairs plus Japanese Garden Walled garden / Capel other key park features Manor, woodland; including boating lake, biodiversity signage and interpretation Timescale 2011– 2015 2015-2019 2019 – 2023 development 2019 start on site 2023 start on site 2015 start on site 2018 Completion Cost £21m £16m £10.5m Potential Funding Heritage Grant Enabling Development HLF Sources Ealing Council Trust funds and Sporting organisations

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Phase 1 Phase 2 Phase 3 Hounslow Council foundations English Heritage S106/CIL

2.7 Key Risks The Risk log for the Programme is attached in Appendix A.

2.8 Delivery Progress

Given the complexity, size and overall cost of delivering the required regeneration of the Gunnersbury Estate, which was the focus of many prior to 2010 studies and reports, the regeneration project failed to progress, whilst the estate suffered further deterioration and increasing costs. A fundamental change was incorporated into the Gunnersbury 2026 Masterplan, which was to take the challenging decision of grouping the works into Phases, allowing a realistic amount of time, 15 years, which aligned with the Centenary of the park being in Public Ownership, 2026.

The Masterplan allowed for the Project to begin to make significant inroads into the challenges faced at the site and in the delivery of the regeneration of the Estate as a whole. Whilst the project was split into phases, based upon need and heritage priority, it was outlined by the project board, that any and all opportunities arising during the delivery for any of the phased elements should be explored. The following section outlines the progress to date and or the next steps in delivery of the phases.

2.8.1 Phase One Phase 1 consists of two applications to HLF. The Parks for People application has a focus on the key elements of the heritage landscape and the Heritage Grant application has a focus on expanding the museum in a refurbished Large Mansion. HLF awarded Round 1 passes to both the Heritage Grant and Parks for People submissions in 2012 thereby approving the further development of the projects. A second Round 2 submission to HLF was made as follows:  Parks for People – 28 February 2014  Heritage Grant – 11 April 2014 The outline timescale for the Construction element of Phase 1 is as follows: The transition timetable for Governance arrangements are presented in Appendix C.

2.8.2 Phase Two Phase 2 consists of primarily the Small Mansion and the Stables. These sites were marketed in 2012, with a preferred bidder being selected for the Small Mansion and approved by both Cabinets. No successful bidder was found for the Stables. Unfortunately the deal with the preferred bidder for the Small Mansion did not progress. However, the process was valuable in gaining an understanding of teh level of market interest and other factors pertaining to the site. Hounslow Council, as the planning authority for the site, were able to secure over £550k of S106 for the site, which has been matched to a significant level by English Heritage, towards securing the Stables which were at significant risk of being lost to the site and future generations.

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The interest that has been generated in the site, both during the development and now delivery stages of the Phase 1 HLF elements, has been significant. A number of parties have expressed interest in working with the councils on these elements, with the most likely path being a Heritage Lottery Enterprise Grant forming a core part of the project. This is due to the Conservation Deficit on the Small Mansion Site, which precludes a large number of the proposals from being viable.

The councils will most likely re-market the sites, with the aim of securing a partner organisation to support us in the delivery of this phase. Due to the momentum generated by Phase 1, we would look to secure a partner by early 2015 and grant fund raise for the site, to allow a refurbishment and occupation these elements, for their new (to be defined) use, by 2019/20.

2.8.3 Phase 3 This phase related to the wider parkland, but with is most important element being the Sports Provision at the site. The Gunnersbury Estate offers a core sporting and recreation site, not just for the two boroughs, but for London, as a result of the size of the site and potential catchment within West London.

Ealing Council have been able to contribute £250k towards the development of a feasibility Study on the Sports Facility Elements, for which the work to date has proved very positive. The support and enthusiasm of the Sporting National Governing Bodies (NGB’s), core community partners and the wider community interest during the Phase 1 consultation, has accelerated the timetable for this phase, as we look to maximise the momentum and upcoming opportunities.

The council will be consulting on Sports Facility options during the remainder of 2014 and early 2015, with a view to grant fund raising during 2015 and early 2016, to allow a start on site (subject to funds being secured and planning permission) in 2016 to coincide with completion of the Core Heritage Works by 2018

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Current Management of Gunnersbury Park Estate

2.9 Introduction Gunnersbury Park Estate is currently funded and administered through a joint management arrangement between Hounslow and Ealing Councils as joint owners.

An Agreement on the joint stewardship of the Gunnersbury estate (buildings, structures and park land) was established in 1927. This has been modified over a period of years. The last signed agreement dates back to 1967. This was updated in 2009.

The 2009 draft agreement was reviewed by the legal teams in both councils and is enacted in principle and provides a framework for: joint working between Ealing and Hounslow; and sets out how the councils engage with stakeholders and local communities through the Gunnersbury Park Joint Advisory Panel. The Panel acts as a forum for stakeholders and the public, enabling formal comment on the park and its development. It has no formal decision making powers.

Decisions regarding the estate are made through Cabinet with parallel reports to the respective Cabinets of each council. The councils are sharing responsibility for the site with each leading on different aspects of the estate management (operational and strategic) Hounslow takes the lead for operations and day to day management: Ealing leads the strategic delivery of the master plan through its programme and project management function in liaison with the Hounslow.

Today, the whole estate is managed through a service level agreement and each council contributes an equal share to the operational costs of £710k (see Appendix E), which is held by the respective Assistant Directors for each authority. Hounslow Council manage and monitor the Park and Museum on behalf of both boroughs. Strategic decisions for Gunnersbury are taken jointly by both councils through a joint project board although this board has no legal status the lead member from each local authority with responsibility for Gunnersbury is a member. The board has five members who act as project champions within both local authorities and English Heritage.

2.10 Summary Staffing and Budgets

2.10.1 Staffing Currently all services are managed by Hounslow mainly through a service contract with Carillion which expires on the 31st March 2015. The structure of this management is shown in Appendix D with full time staff for Gunnersbury shown as FTE.

 Museum staff include curatorial (care of the collections) educational (interpreting the collections) and front of house (reception, cleaning and facilities management (FM)).  Park staff include both grounds maintenance (GM) and the management of buildings, events and facilities in the park.

In summary the staff numbers are shown below

Organisation Staff Numbers Carillion 13.4 Hounslow 1 Total 14.4

2.10.2 Budget The summary budgets for Gunnersbury over the last three years are shown, shown in Appendix E.

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3 OPTIONS APPRAISAL

3.1 Summary of the Options Appraisal The programme commenced with an Options Appraisal to demonstrate the validity of the planned approach. Research was carried out to inform the programme, alongside a review of the legal and financial implications. The Options Appraisal work concluded that a structure of a Charitable Fund-raising Trust (known as the Development Trust), together with an Operating entity, that would take the form of a Community Interest Company (CIC), jointly owned by the two boroughs, would represent the optimum solution for the two Boroughs, in terms of satisfying the required criteria set out below.

3.2 The Approach Barker Langham identified in their report presented to Cabinet in February 2014, that a two organisation structure, with one organisation managing the site and a separate organisation undertaking fundraising activities, would allow the Councils to achieve their aims. They also identified, that detailed VAT and Legal advice was needed in order to design a solution that satisfied all the key requirements. Specialist Legal and VAT advice was commissioned to analyse key aspects, of various options. The report from Winckworth Sherwood and The VAT Consultancy, the advice received is summarised in sections 5 (Legal Implications); and section 7 (Financial Implications) Given the many permutations of organisation types, not every single nuanced structure was analysed in detail. Where a specific feature of an organisation would prevent it from satisfying key criteria, it was not analysed further (for example, unincorporated structures expose board members to an unacceptable level of risk, so detailed analysis of the 10 or so possible unincorporated permutations would have added little value.) Where a structure passed each hurdle the permutations applying to it were taken forward for further analysis.

3.3 The Appraisal Each Option for the Operating Entity was assessed by Legal and VAT experts against 5 key Criteria. Where an option failed to meet one of the Criteria, it was not assessed further:  Independence - does the option demonstrate sufficient independence from the Councils to satisfy the requirements of the HLF and allow for the Charitable Fund-raising to not be seen as a Tax avoidance front for the Councils  Personal Liability - does the model protect the individual members of the board of the operating entity from personal liability in the event of insolvency  Governance - does the model allow the Councils to exercise a sufficient degree of control, while still allowing for independence  VAT - does the model protect the Councils’ positions with respect to the full £25M development budget The final criteria is of the relative financial position – this is an assessment, taking into account the recoverable VAT on the Funds raised by the Charitable Trust element; the NNDR position, and the ability to award mandatory and/or discretionary relief; and the relative operating financial position, assuming similar levels of business activity, but with different taxable positions. Also considered were the reporting overheads, including consolidation requirements, of the different options. The following assumptions have been made:  Each Option assumes the presence of a charitable Fund-raising element, either separate to; or integrated into the Operating Entity  HR and ICT overheads are the same regardless of the selected structure  Except where an option prevents a specific business activity, it is assumed that costs and revenues will be the same for each option

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 The level of funding raised by the Fund-raising Trust is the same regardless of the structure of the operating entity.  Any “Gift-aid” income would be routed through the Find-raising trust, regardless of the form of the Operating entity.

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Option Number Description Criteria 1 Criteria 2 Criteria 3 Criteria 4 Criteria 5 - Relative Notes and Title Independence Personal Governance VAT Financial Position Liability 1 - As Is The Two Boroughs This option would not be acceptable to HLF, because it is continue to manage does not create a single separate entity focussed on the the park as it is at delivery of the desired outcomes. present R

2 – Contract with a The boroughs This option would not be acceptable to HLF, because a Private Sector contract for private sector entity is too independent from the Councils, Organisation Operations to a would have an underlying profit motive and there would be private sector R no guarantee profits would be retained and reinvested in partner the site.

3 – Trading The Operational A Local Authority Trading Company is a specific vehicle Company entity is established established under the Local Government Act 2003 to trade as a Local Authority G G R R services on a commercial basis outside the public sector Trading Company and distribute profits back to the Authorities. This vehicle is

entirely unsuited to the need for an entity with the remit of operating the Museum and Park on behalf of the Councils.

4 – Social The Operational Incorporated 4.i 4.i.x This route provides the lowest risk route to satisfying the Enterprise entity is established Non- NPDO key criteria. Within this option, the three choices are: as a Social G G Charitable G G G 1) A CIC - this is an established brand in the Charity Enterprise and Heritage sector

2) An Industrial and Provident Society - generally associated with mutual and cooperative movement 3) Company Limited by guarantee – does not have recognised brand of a CIC for a non-charitable enterprise 4.i.y If the stated purpose of the Operating Entity is to make a Profit profit, HMRC may assume a commercial rent, placing at Distributing risk the VAT recovery on the £25M development budget R and further, placing Ealing’s Partial Exemption Limit at risk

4.ii In order to be Charitable, the boroughs would be limited to Charitable 2 Trustees out of 11, giving insufficient strategic control

R In this model, the Red rating on Governance is the same regardless of whether there is a single Charity, or whether

the operating and fund-raising charities are established as a single trust. Unincorporated An unincorporated entity would expose members of the board to unlimited liability R

4a – Contract with The Council Although mitigated by a contract, the management of the Existing Social Contracts with an site would be controlled by the Social Enterprise Enterprise existing Social Enterprise G R

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4 DETAIL OF THE RECOMMENDED OPTION

4.1 Introduction The recommendation from the Options Appraisal is that a Social Enterprise, taking the form of a Community Interest Company (“CIC”) be established to manage and operate Gunnersbury Park Estate. This CIC will sit alongside the previously agreed Fundraising Trust (referred to as the Development Trust).

The full detail will be developed following agreement by the respective Cabinets of the two boroughs.

4.2 Detail on the Form of Community Interest Companies

Advantages  It is a recognised “brand”.  It is a corporate entity and therefore offers limited liability.  The CIC allows for Authority control – it will be owned by LBE and LBH who would be the 2 members  Ensure Council representation (officers or members) on the board of the CIC (although advisable to have different representation on Development Trust to avoid any conflicts of interest)  It is non profit distributing entity and, therefore, whilst not charitable it will, nevertheless, benefit from potential VAT exemptions, discretionary business rate relief and be eligible for some grant funding.  It is modern and up to date operating with the company law regime.  Optimises the benefit of charitable and non-charitable status through a separate fund raising Trust  Potential for the CIC to benefit from discretionary rate relief despite non charity status  It is regulated by the CIC Regulator at Companies House.  It is required to file an annual statement setting out it is fulfilling its community purposes.  It therefore operates in a transparent regime and is accountable not only to the CIC Regulator but the wider community.  It has an “asset lock” which will be attractive to 3rd party donors (i.e. surpluses are retained within the CIC protecting the assets of the company for community purposes – in this instance for the long term benefit of Gunnersbury Park Estate. However, if excess surpluses do arise the management fee paid by each Council can be reduced.  Because of the Local authority ownership, the relationship between the Councils and the CIC will fall into the scope of Teckal exemptions, removing the need to have a formal procurement process to use the CIC to run the park (although the CIC may be subject to EU procurement rules when it contracts with 3rd parties).  Management fee to be paid in lieu of subsidy and apply VAT in order to maximise VAT reclaim by CIC.  Some VAT loss on £1.4m raised by Charitable Trust (this will range between £0 and £120k being irrecoverable VAT on £1.4m Capital spend) depending on how much is paid directly to Council from 3rd party funders, and, for the funds raised by and passed from the Trust to the CIC, what those funds are spent on. This will be reduced if the £1.4m is spent on an asset directly related to a taxable supply (eg the café) or if the third party donors can be persuaded to donate directly to the Council.  No risk to Ealing’s Partial Exemption Limit  CIC to consider benefits of Opting to Tax –will decrease the amount of irrecoverable input VAT (relating to exempt supplies) but will also increase charges in some areas, for example events income.  CIC has ‘asset lock’

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 Councils ultimately underwrite any capital shortfall or ongoing operating losses, as with all the options, the Councils ultimately retain underlying liability for any financial shortfall, be they Capital or Revenue.  Key to the arrangements are that there are no fundamental VAT issues with this CIC arrangement. The VAT can be managed by way of a peppercorn arrangement (which safeguards the recovery of VAT on the £50 million of Council and HLF funding) and the payment of the £1.4m of funds raised to the CIC for it to spend (VAT incurred on this £1.4m will be partially recoverable – depending on the ratio of VAT-able income received by the CIC).  The CIC will not be eligible for mandatory NNDR. However Hounslow Council’s discretionary relief policy has provisions enabling the award of up to 100% discretionary relief.

The VAT Consultancy identified the issue re joint ownership and the implications of both Councils claiming VAT on the site (Hounslow for current operations and Ealing for capital Expenditure). HMRC have confirmed both Councils will be able to reclaim VAT on ongoing operations and the capital works.

Disadvantages  Tax Position - CICs do not enjoy any special tax status. The CIC will, therefore, be subject to corporation tax in the normal way. It is assumed that there will be no liability to corporation tax as a surplus is unlikely to arise, and if they did, they will be used for, or reinvested in the site.  Duties and Responsibilities - The board of directors will have duties and responsibilities under the Companies Acts. Whilst not onerous, these should be taken seriously.

Decision on whether to Opt to Tax

The CIC will need to decide whether it is more beneficial in terms of VAT recovery to Opt to Tax the property. The implications of Opting to Tax are, that solely property related transactions (e.g. the rental of function room space for events) become taxable in VAT terms and so increase the amount of VAT that can be recovered, principally in terms of ongoing operations, but also potentially in relation to any capital costs. Initial modelling indicates that the annual irrecoverable VAT cost is reduced from £51k to £7k if an Opt to Tax option is pursued. The decision in Opting to Tax will apply to any governance that is adopted and so is not a deciding factor in this options appraisal.

4.3 Relationship Between the Development Trust and the CIC The CIC and the Development Trust will be separate legal entities. The relationship between these two organisations will be important for the future of the Gunnersbury Museum and Park. An agreement will be drafted to reflect this special relationship and their mutual aspiration for the future sustainability of the site and benefits for the local community.

The Development Trust will pass funds raised to the CIC; who will in turn commission and pay for the works that the funds have been earmarked for. To maximise VAT recovery, these funds should be spent on items that relate to VAT-able income. If spent on items that are directly connected with exempt income (e.g. a room solely hosting cultural activities), no VAT can be recovered on that expenditure.

This will be taken into account during implementation of the capital works which will be managed by Ealing Council’s Major Projects team.

4.4 Relationship Between the CIC and the Councils

4.4.1 Outline In transferring the management and operation of Gunnersbury Park Estate to the CIC, it is acknowledged that the local authority will lose direct control of the day to day operation of the park. It will, however, retain significant strategic control.

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Whilst the new relationship will be at “arm’s length”, the two organisations will be working closely in partnership to deliver a shared vision for Gunnersbury Park Estate.

4.4.2 Contractual Relationship between the Council and the CIC The arrangements between the parties will be formalised in a series of formal agreements. These agreements will be legally binding and enforceable and thus give the Councils legal remedies in the event of poor or non-performance.

The agreements will also protect the Councils’ assets and enable the Councils to recover their assets in certain circumstances. It is important to note that the Councils will not be disposing of the property freehold but rather granting a lease to the new entity. Thus if the new entity got into financial difficulty, the lease would automatically be forfeited and the Councils would resume responsibility for the Service. Similarly, the collections would not be transferred to the new entity but “loaned” for the duration of the lease period with legal title remaining at all times with the local authority. The new entity effectively acts as a “managing agent” acting on behalf of the Councils, as legal “custodian” of the collections.

The Detail of the lease and the contract with the CIC will be developed in more detail, following the decision by Cabinets.

4.4.3 Service Planning It is anticipated that there would be an annual service planning regime.

The significance of the service planning regime is to enable the parties to refocus/realign the services delivered at the site on an annual basis to ensure these continue to meet the Councils’ key priorities for the site.

4.5 Membership of the CIC Both Councils will be represented on the board of the new organisation. As a non-charitable model, Council representation is not as restricted.

If the CIC is controlled by one of the Councils (i.e. 50% or more) then it will potentially be a connected company (under the new accounting principles) and therefore grouped with the local authority for accounting purposes. This will not however have any material impact on either Council in terms of borrowings.

In addition, it is suggested that the Councils are the members of the CIC thus retaining control at member (shareholder) level.

The model anticipates the involvement of other individuals on the board with relevant skills and expertise. The number and roles of the other members will be determined in the development stage of the CIC.

The Councils should be fully involved in this recruitment process. This will be critical to the success of this governance model.

It should be noted that the Council members on the board of the CIC, cannot be the same individuals as are members of the development trust.

4.6 Administrative Support In order to smooth transition to the CIC, it is proposed that the CIC procures Back Office support from one of the two Councils. In the medium term, the CIC will determine its preferred arrangements for back office support services.

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4.7 Regulatory Requirements The new arrangements will be subject to a robust monitoring and review regime. This will involve regular meetings at both officer and member level. The new organisation will be required to provide regular financial and operational reports to the Councils to demonstrate how the organisation has delivered the key outcomes. In terms of statutory reporting requirements there is not enough of a controlling influence (ie > 50%) to warrant treatment within a Group Account arrangement. The arrangement will be a “strategic alliance” rather than one of board control and influence. The materiality in terms potential gains / losses is low – so again not a Group Account issue (CIPFA code 9.1.1.) The CIC would have to be treated under Company Acts, specifically the 2004 Act which covers CIC’s, and have its own Accountants and Audit. Each Council (Ealing and Hounslow) would report details of its assets and liabilities in respect of this venture in their own respective accounts by way of separate disclosure and on the consolidated balance sheet. The PPE assets would remain on the B/S anyway for each Council, most of which are Heritage

The cost of administration and compliance is incorporated within the business model.

4.8 Transition Plan and Timescales The Transition from Council Running of the Gunnersbury Park Estate to the CIC running the Gunnersbury Park Estate is shown in Appendix C. The high level plan for implementation and Transition to the CIC is as follows:

Oct 2014 Recommendation to Cabinets to form a CIC Q4 2014 Develop Memorandum & Articles of Association Q1 2015 CIC established / Appoint Board Members Q1 2017 Appoint CEO and other key staff Mid-2017 CIC takes over running of Gunnersbury Park Estate

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5 LEGAL IMPLICATIONS

5.1 Introduction There are a number of legal powers that support the proposal to establish a CIC to manage Gunnersbury Estate on behalf of Ealing and Hounslow. These are summarised, below.

5.2 Key Implications The key implications are as follows:  S.1 of the Localism Act 2011 provides the Council with the power to create the Community Interest Company.  There are also specific powers set out in S.12 of the Public Libraries and Museums Act 1964 (the “1964 Act”)to provide and maintain museums and art galleries within its area or elsewhere and the Council may do all such things necessary or expedient for or in connection with the provision or maintenance of those museums or art galleries. The Council may make a charge for admission to a museum or art gallery but in determining how to exercise this power it must take into account the need to secure the promotion of education in the area and have particular regard to the interests of children and students.  There is also a specific power in S.14 of the 1964 Act to make contributions towards the expenses incurred by a third party providing or maintaining a museum or art gallery or providing advisory or other services or financial assistance for the benefit of the museum or art gallery. This means that the Council can also rely upon this express power to work collaboratively in relation to the provision of museum services.  S.123 of the Local Government Act 197 permits the Council to dispose of its property by way of lease. In the light of the proposal to grant a lease at a “peppercorn rent” the Council can rely on the General Consent Order to authorise the disposal for less than the best consideration, provided the disposal is likely to contribute to the achievement of any one or more of the following objects i.e. the promotion or improvement of the economic, social or environmental well-being in respect of the whole or any part of its area, or of all or any persons resident or present in its area; and the difference between the unrestricted value of the land to be disposed of and the consideration for the disposal does not exceed £2m.

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6 STAFFING IMPLICATIONS

6.1 Introduction In establishing the CIC, there are a number of staffing issues that will need to be considered. Most of these would be relevant, regardless of the form of Operating Entity that emerged from the options appraisal

6.2 Transfer of Staff "Transfer of Undertakings (Protection of Employment) Regulations 2006 may apply, if there is a transfer of services from the Council to the CIC.

6.3 Secondments Secondments can be considered, where appropriate with LBE, or LBH employees being seconded to the CIC. Where this happens, a secondment agreement will be entered into between the relevant council and the CIC.

6.4 Pensions Subject to appropriate agreement by the Trustees of the Hounslow, or Ealing Pension fund, the CIC will be granted Admitted body status to Hounslow’s LGPS pension scheme. The precise nature of the admissions agreement would need to be considered when it is being drawn-up although it will only be open to existing staff.

6.5 Consultation Any organisational change will, of course, be of concern to staff. It is imperative that any future management options prioritise staff concerns. It would be essential to consult with Unions at the outset and to agree a staff consultation protocol. This will involve a commitment by the Councils to meet regularly with the Unions and to communicate in relation to all aspects of the project.

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7 FINANCIAL IMPLICATIONS A detailed comparison of the relative costs of each option has not been carried out as the non- financial considerations (i.e. independence, personal liability, and governance) were overriding factors in narrowing the options down to a CIC running alongside a Development trust. Also, this Business case focuses on the relative merits of the proposed Governance structure, and not on the overall business plan and model. This recommended option has the following financial implications:

 The Development Trust maximises the access to funds which the Councils are not able to access  The summary VAT position is that the risk to each Council’s Partial Exemption Limit is eliminated through ensuring no funds raised from third parties are transferred to the Council from the CIC or the Trust, and those funds are spent by the CIC  The CIC will have a mixture of exempt and VAT-able income and so will need to submit a partial exemption claim, both on its capital and revenue expenditure. The CIC will be able to improve its VAT recovery, at no cost to the Council, by charging VAT on the management fee to the Council. As the CIC will be taking over the management of the park, previously run by the Councils, HMRC will accept that the CIC is making a taxable supply to the Councils in return for the funding.  The intention is that the CIC will be successful in running the site and the level of subsidy (i.e. the management fee) will reduce over time.  The NNDR position is not certain at this stage. The whole site currently pays £1.5k in NNDR. When the site is fully restored and generating significant income from events hire, sports and the café the Valuation Office may seek to reassess the site and increase the rateable value. It is difficult to estimate what valuation the VO may put on the site and how it may apply it (e.g. treat the Park as a whole or as a collection of discrete businesses with their own valuations). Upper estimates are in the range of £50-£70k. As the CIC is not a charity it will not be automatically eligible for 80% mandatory charitable relief. However, Hounslow Council has a discretionary relief policy which enables them to award up to 100% relief, although the Council would then suffer a 30% cost in any relief awarded, through revenue foregone. This 30% cost assumes that the Council does not fall within the ‘Safety Net’ or ‘Top-up Range’ Business Rates bandings, but if this became the case the cost would be higher.  The Councils remain the ultimate guarantor of the CIC both in terms of any shortfall on capital expenditure and ongoing operations. This would have been the same situation for all options.  During the Development phase the CIC will need to a) contract for works and b) pay for those works, probably in advance of receiving the promised third party funds as these are normally claimed and received in arrears. This may mean the Councils may need to provide a short term working capital facility to the CIC which would be on commercial terms and with the necessary securities and safeguards in place.  The Council may provide back office services (e.g. bookkeeping, HR, IT) at cost to the CIC and Development Trust with specialist services commissioned as required.  In terms of contracting services between the CIC and the Councils, this is covered within the Teckal exemptions (i.e. EU Public procurement rules do not apply). However, for contracts between the CIC and third parties, it is likely, subject to the final arrangements between the CIC and the Authorities, the CIC will be subject to EU procurement rules and will need to consider how they obtain that capability.

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APPENDIX A – RISK LOG Below, is a summary Risk Log for the Implementation of the Future Gunnersbury Model:

Risk Short Description of Risk Assessment of Uncontrolled Risk Controls and Mitigating Actions Assessment of Residual Risk Ref. Description - Cause & Consequence Severity Likelihood Risk Severity Likelihood Risk (1 Low - 4 - (1 Low - 4 - Rating (1 Low - 4 - (1 Low - 4 - Rating High) High) High) High)

1 Failure of There is a funding gap for Phase 1. 3 2 6 Expert opinion suggests that the level of 3 2 6 Development The expectation is that the funding funding being sought is not unrealistic; and Trust to Raise will be raised by the development the Trustees being approached to be on the Funds trust board of the Development Trust are highly regarded

2 Trustee There is a risk that the trustees of the 4 2 8 The Objects of the trust will be constructed 4 1 4 independence development trust could decide to in a way that minimises the options for who pass the raised funds to another the Trustees can elect to pass funds to. body, other than the CIC The membership will include members from the two Authorities

The person specification will be constructed to ensure the professionalism of the appointed trustees

3 Failure to meet Failure to meet the Business Plan 3 2 6 The Business Plan has been developed by 3 2 6 business plan levels of income; and manage the heritage experts; and has been planned level of expenditure independently reviewed to ensure that it is achievable.

4 Co-operation There is a risk, that during the period 4 1 4 The working relationship between the 4 1 4 between of the agreement to operate the park, boroughs throughout the duration of the boroughs there is a breakdown in relationships Gunnersbury Park Programme has been between the two boroughs very good, the risk is noted to reflect the long duration of the arrangements currently being entered into.

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5 CIC Management There is a risk that the appointed 4 2 8 The articles of the CIC will be written in 4 1 4 Failure CEO and senior management team such a way to ensure that in the event of fail to take the CIC in the direction management failure, the Councils will be that the boroughs expect able to take remedial action

6 Unforeseen need major unforeseen events, may effect 4 2 8 Close monitoring against the business plan, 2 1 2 for working ability of the CIC to sustain cash flow Board representation, greater knowledge of capital/finance the site and facilities via CMP and PPM. Option to borrow from the councils at commercial rates

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APPENDIX B – CASE STUDIES B.1 Pitzhanger Manor Trust B.1.1 Organisation: Background Ealing Council is the custodian of Pitzhanger Manor which is a Grade 1 listed building and the associated structures in the surrounding grounds, which are Grade II* or Grade II. Pitzhanger Manor Gallery (PM Gallery) adjoins the Manor House and is West London's largest public art gallery. The gallery works with national and international agencies to bring leading artists and designers to Ealing. The studio gallery, which is part of the PM Gallery, is an important resource for local artists. There is an extensive programme of formal and informal learning activities. The house and gallery are used for meetings, conferences, weddings and other private hire events. This, as well as the heritage and arts services provided by the site, makes Pitzhanger an important community asset. Pitzhanger Manor House and Gallery is subject to a major transformation project that will lead to the restoration of the house, improvements to the gallery and the addition of a café/restaurant and the eventual transfer of the management and operation to a trust In 2018. Ealing Council agreed to facilitate the setting up of a trust to ensure the sustainability of the asset, the delivery of the vision for the house and gallery and; to secure community benefit through community involvement in the future management and operation of the site. Ealing undertook a public trustee search and the appointed the initial shadow trustees, including the Chair.

B.1.2. Business model Governance Pitzhanger Manor Trust incorporated as a company limited by guarantee in the autumn of 2012 and registered as a charity in 2013. There are 11 trustees, two of whom, are nominated by Ealing Council – the Leader of the Council and the Leader of the Opposition. The Trust receives an annual grant of £20k to enable it to engage with the Council as an independent partner on the development of the transformation project, lead on fundraising and build its capacity to engage fully in the future management and operation of the site. The Council and the Trust have a joint Memorandum of Understanding that sets out the basis of their partnership. They were joint signatories to the Heritage Lottery Fund application and share the obligations attached to the grant award regarding the delivery of the transformation project and its intended outcomes. A Lease and Management Agreement are being developed regarding the future management and operation of the site. Ealing Cabinet will receive a report setting out the terms at its meeting in February 2015.

B.1.3 Lessons for Gunnersbury  Trustee Search took 3 months (May to July). Company set up October and charity registration January in total 8 months. Advice is to identify shadow trustees early. This can be done by open search or personal approaches to elicit interest and encourage applications.  Important to have an influential chair connected to the project able to lead the organisation – not easy to find

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 Important for the Trust to demonstrate independence from the local authority so it cannot be misconstrued as acting on behalf of the local authority. It needs to be closely connected to the project  Local connection is key to success and ensuring credibility in the community, as well as trustees from further afield who bring skills and beneficial networks for the project.  The trustees need support to enable them to carry out their duties. They are volunteers agreeing to take on a significant responsibility and will require support from Council officers until they can resource their own team in the future. To resource their team, they will need funding from the Councils. It is not feasible for them to meet their staffing or other costs from the funds they raise for the project.  Fundraising is a key function and the Trustees need to be fully engaged in the ‘ask’ and securing the funds. Although council officer support will be required to lead strategy and administer the fundraising process, the Trustees will need to be intimately familiar with the project and able to give time and energy in to this role and influence strategy direction.  Current advice is to keep the fundraising function of the trust and the future management and operation of the site distinctly separate.

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B.2 Lampton 360 Ltd B.2.1 Organisation Local Authority Trading Company Business model:Company limited by Shares Set up: Set up by agreement of LB Hounslow Cabinet in response to the new Powers to Trade commercially with the private sector. Councils are facing increasing pressure to identify new revenue streams in response to central Gvt funding cuts. A new trading company was formed in response to the need to generate income commercially, building on the strengths and expertise of the Council in a range of sectors. Governance arrangements: The Cabinet represents the Council as the sole shareholder of the company. The Board of Directors includes 4 Directors: the Chief Exec, Director of Corporate Resources, Council Leader and Deputy Leader. The Managing Director is the Director of Corporate Resources, who oversees the Company Management Board, responsible for operational management. An annual AGM takes place where the Cabinet exercise their power as the company shareholder. Term/length of operation/finance: The company was set up in April 2013; the Council owns the initial share of £10,000

B.2.2 Lessons for Gunnersbury The Council has experience of operating a company limited by shares. Key lessons learnt for Gunnersbury:  Board of Directors is a good way to gain senior buy in from Council members and officers. The Board of Directors meet quarterly in this case and this works well. They take a high level strategic view of company performance, e.g. financial performance against target, and key issues;  The Management Board deal with all operational issues for Lampton 360; if the Councils (LBE and LBH) wish to have any operational insight into Gunnersbury then a Management Board would be a good vehicle to provide this  It took at least 6 months to finalise all of the governance arrangements for the new company, after the relatively simple incorporation process. This included the following, which would need to be put in place if a formal company structure is pursued by the two boroughs: o Ensuring Directors clear on responsibilities o Ensuring Shareholders clear on responsibilities o Clear lines between the Council and the company o Understanding what systems and processes the company would need o Agreeing the company’s policies and procedures (e.g. employment terms, staff handbook, etc) o Accounting and auditing arrangements o Insurance arrangements o Legal advice around delivery of company activities

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o Clear delegation of decision making by the Board of Directors to the operational managers

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B.3 Tyne & Wear Archives & Museums

B.3.1 Organisation: Background When the Metropolitan County of Tyne & Wear was established in 1974 the Joint Archives Service and Joint Museums Service were set up separately to cover the Metropolitan area. In 1986, at the abolition of the Metropolitan County, separate Archives and Museums services were retained as joint local authority services, each providing services to the five Tyne & Wear authorities. This position continued until 2009, when the Archives and Museums Services were merged into TWAM. At the end of March 2013 Sunderland City Council decided to take on direct management of its museum services, but retains TWAM as its provider of Archives services. Since 1986 the former Museums Service, and now TWAM, has received Central Government Grant in Aid (currently delivered as Core Funding by Arts Council England), in recognition of its greater than local reach and relevance.

B.3.2 Business model Governance of TWAM is via a Joint Committee. Three elected members from each of the four local authority members of TWAM form the Joint Committee and elect a Chair on an annual basis. TWAM is not a constituted body and Newcastle City Council act as the lead authority. All TWAM employees, regardless of which local authority area they work in, are employees of Newcastle City Council. TWAM’s budget is set on an annual basis and whilst initially, the Joint Agreement, was set on a ten year basis, over the last two years it has been agreed on an annual basis. TWAM’s budget is presented in the Annual Report and in the Accounts which are available at www.twmuseums.org.uk.

B.3.3 Lessons for Gunnersbury When the Joint Committees for Archives and Museums were established in 1986, these were relatively common governance structures and operated within a committee based local authority environment. In 2014, with a model of cabinet government, this Joint Committee structure is unusual. One of the biggest challenges is the annual process of appointing members to the committee and setting a budget. Most of the partner local authorities do ensure continuity of representation on the joint committee and this is a huge bonus. Most also ensure that the relevant portfolio holder is a member of the committee and this is also important. The clear advantage of the Joint Committee system is democratic accountability and a strong connection between partner local authorities and TWAM’s Governance. The major disadvantage is the absence of local business people and their expertise on the governing body. As part of the mitigation of this TWAM has a separate fundraising trust, the Tyne & Wear Archives & Museums Development Trust, which is independent and has one local authority member representing the committee with five independent members. TWAM is currently, with the agreement of the Joint Committee, investigating possible changes to governance with a view to:  Ensure the future protection of services and assets  Maximise efficiencies and cost savings

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 Provide increased freedom to trade and fundraise  Ensure input into Governance of and from regional business people and wider stakeholders  Ensure a longer term planning cycle

In developing this proposed new governance model (and subject to a report to be prepared later this year), it will be essential that effective means of maintaining links with the democratic process are established. It should be noted that in addition to running Museums Services for the four Tyneside authorities and Archives for the five Tyne & Wear authorities, TWAM also operates two museums (Great North Museum: Hancock and Hatton Gallery) on behalf of Newcastle University. A change in Governance could also allow closer integration of the University into TWAM’s Governance mechanism.

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APPENDIX C – IMPLEMENTATION PLANS

Community Interest Company - Timescales Prepare draft Memorandum and Articles of Association November 2014 Finalise Memorandum and Articles of Association December 2014 Company registration and appointment of Council CIC board Q1 2015 members Recruit operational staff to CIC Q1 2017 CIC takes over operation of Gunnersbury Park March 2017

Development Trust –Timescales Prepare draft Memorandum and Articles of Association June 2014 Finalise Memorandum and Articles of Association July 2014 Recruitment / selection / induction of Shadow Directors September – October 2014 Company registration Appointment of Shadow Directors and inaugural meeting September/October 2014 Open bank account October/November 2014 Preparation of application for Charity registration October 2014 Lodge Charity Commission application with supporting November 2014 documents Liaise with Charity Commission regarding any queries November – December 2014 Secure charity registration December 2014 First Trustees Meeting January 2015 Formal Launch of Gunnersbury Museum and Park Development January 2015 Trust Campaign

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CIC Implementation The following table outlines the key activities required to establish the CIC

Document Parties Key provisions Memorandum & Articles CIC The CIC’s governing document setting out the objects, powers, liability, and dissolution provisions, and of Association the provision for the calling and conduct of board and member meetings, the appointment, removal and disqualification of directors.

Transfer Agreement (1) Councils This agreement will identify the components of the service to be transferred from the Councils to the (2) CIC CIC and then, in relation to each aspect of the service, the agreement will set out the terms of the transfer arrangements. Funding and (1) Councils This agreement will set out the terms and conditions of the funding arrangements between the parties. Management Agreement (2) CIC It will identify the key performance outputs required by the Councils (by reference to an output specification to be scheduled to the agreement) and the funding to be provided by the Councils to assist the CIC to deliver the required outputs. The agreement will set out in detail the monitoring and review arrangements, an escalation procedure for managing poor performance, termination and, importantly, exit and handover arrangements.

Support Services (1) Councils It is anticipated that the CIC may contract back certain support services from the Councils. This Agreement (2) CIC agreement will formalise these arrangements. It will set out the terms on which the services will be provided and the payment arrangements.

Leases/ licence (1) Councils The parties will enter into a lease or licence in relation to each of the museum/heritage facilities. (2) CIC The lease will set out the lease term, the user clause, repair and maintenance and any early termination provisions e.g. a break clause for redevelopment.

Admission Agreement (1) Pension The CIC will be eligible to be admitted to the Superannuation Scheme. Thus all existing employees’ Fund Trustees pension position will be protected. New employees will be eligible to join subject to the terms of the (2) Councils Scheme. (3) CIC Collections Agreement (1) Councils The museum collections themselves will be loaned to the CIC (not transferred) and the terms of such (2) CIC loan will be set out in this Agreement.

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APPENDIX D – CURRENT STAFF DETAILS

Ealing and Hounslow Joint Management

London Borough of Hounslow

Carillion Integrated Services Assistant Dir. Public Health and

Leisure

Head of Operations Head of preventative Health and Leisure

Cultural Services Contract Manager Parks Services Manager Facilities Manager Manager (Supply chain management)

Development and Regeneration Grounds maintenance Maintenance Museum Curator Libraries Events manager (Gunnersbury) manager Staff 1 FTE Manager

Museum Customer Services Documentations Education and Life Team Leader Arboriculture Lettings Administration Team Leader Assistant Long Learning Assistant 1 FTE 1FTE 0.4 FTE 1FTE

Sweepers and Customer Services Education Park Operations Cleaners Litter Staff Assistant Assistants 3 FTE 1FTE 1.5 FTE 2FTE 1.5 FTE

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APPENDIX E – INCOME AND EXPENDITURE BREAKDOWN 2013/14 EXPENDITURE £

Year 2013/14

Expenditure 826,038

Income (115,090)

Balance 710,948

Ealing Contribution 50% £355,474 Hounslow Contribution 50% £355,474

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APPENDIX F – CURRENT GUNNERSBURY GOVERNANCE STRUCTURE

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