Environmental Services The Business Case for Retention of the Parks Nursery Steve Reynolds
The Parks section of Environmental Services is very proud of the flower displays provided across the Borough; these are recognised as being some of the best municipal displays in the Country.
The quality of the bedding plants used in our displays is a very important factor; having our own nursery has enabled us to maintain high quality as well as growing the exact species/colour required
The current economic climate has forced all local authorities to look at the services it provides and ask the question – “Can the service be provided more efficiently?” Outsourcing the provision of bedding plants and closure of the nursery is an option currently under debate. It is a question of balancing the cost benefits and the risks of outsourcing against the current method of service delivery. There are a number of other factors Members have to consider such as the potential capital receipt if the current nursery site is sold and the future costs of the service.
The purpose of this presentation is to summarise the business plan for the nursery and the potential for increasing efficiency and lowering costs. Members will have heard in the evidence presented that it is our hope to reduce the costs of the nursery over the next two to three years to the point where we will be very close to the projected costs of outsourcing. Beyond that our aim is the make the service equally cost effective.
Nursery Business Plan A Business Plan has been drafted which sets out a number of actions and mini-projects which will reduce the cost of nursery provision and increase efficiency. Currently the nursery supplies the bedding plants to meet the requirements for annual and seasonal bedding. A stock of heritage plants is maintained and cultivated to supply heritage planting throughout the Borough. The nursery has historically worked with local schools, community groups and volunteers to add social value to the business.
New Labour Force�
Nursery Business Plan Looking to the future the nursery will deliver the following products and services: • The growing of plants to meet the bedding requirements of Scarborough Borough Council; • The sale of ancillary plants to local plant suppliers; • The cultivation of heritage plant varieties • The cultivation of shrubs utilising existing shrub stock. • To provide horticultural experience and training to apprentices recruited through the Borough Council’s apprenticeship schemes;
Nursery Business Plan • Act as a purchasing partner for local groups and clients to procure plants, trees and shrubs; • To work with The BEACH Social Enterprise to enable youth training and apprenticeship opportunities; • Enable educational work and visits through engagement with local educational establishments; • To work in partnership with other social enterprises to provide training and work experience to individuals as appropriate. • Work with local community groups such as In Bloom and Friends groups.
Nursery Business Plan All of these proposals have been examined in some detail; for example: We have worked very successfully with Basics+ to retail excess plants through their shop at East Ayton to the benefit of all parties. We have commenced growing shrubs in areas of nursery not in use for bedding plants; we have now started to see cost savings through this project. We currently have a number of apprentices who will benefit from training in the nursery.
The need for greater efficiency is focussed on two key areas, these are variable costs (such as utility costs, salaries, overtime etc.) and maximising productivity/revenue. In relation to variable costs a comprehensive review has been undertaken with regards to utility costs with these being driven down over the last two years. More sustainable space heating solutions are being looked at, for example, biomass boilers. With renewable heat incentives (RHI) the capital costs could be repaid in 6 years, attract RHI payments for up to 15 years and significantly reduce gas usage. (Funding is also available for managing woodlands to harvest biomass*)
Biomass Boiler
Overtime costs associated with the nursery have been reduced and the roll-out of 5 in 7 working will reduce this further. There are opportunities within the nursery to maximise productivity within existing capacity constraints. This will allow for a significant increase in the quantity of plants produced and will deliver an additional revenue stream through partnerships such as with Basics+, we have also had interest expressed by other local retailers should we be able to progress increased production.
One aspect of increasing efficiency is a significant shift away from seasonal bedding to more sustainable bedding. The nursery is well placed to adapt to these changing requirements without increasing costs. Indeed, the nursery has access to an almost unlimited supply of shrubs for propagation which can be used to support such initiatives.
Added Value The nursery is committed to delivering added social value from its operations. The site currently employs two individuals with learning difficulties and it is proposed to increase such training opportunities through partnerships with other social enterprises. In addition, through the Grounds Maintenance Plus programme the Council is seeking to secure school’s grounds maintenance contracts (38 schools worth £123,113) by competing, not just on price, but through adding value to these contracts by offering educational visits to the site.
Grass Cutting Operation
Action Plan • Key Objectives • Task • By Whom • By When •Trial commenced in 2012 which should •Growing shrubs from cuttings •Dave Finch/Steve Allen •2012 reduce costs during 13/14 •Dave Finch/Steve Allen •2014 •Maximising use of glasshouse •Identify spare capacity and identify most capacity cost beneficial way of using space •Minimising overtime •Introduction of 5 in 7 working. Better •Paul Thompson •2013 alignment of staff levels with growing season. •Maximising use of volunteers •On-going – recruitment drive to be •Roger Burnett/Steve •2013 considered Allen •Review energy consumption •This has been done in 2012 but will need to •Jeremy Carter/Steve •2013 Allen be further reviewed in line with other proposals •Identification of marketing •On-going •Harry Briggs/Steve •2013 opportunities for plants etc. Allen •Identify opportunities to sell •Sales through Basics+ successful in 2012. •Harry Briggs/Steve •2013 excess stock through existing Discussions with other retailers on-going Allen retailers •Establish a low-cost •Some preventative maintenance can be •Steve Allen/Asset •2013 Management maintenance programme for done in-house along with minor repairs etc. nursery buildings Condition of buildings generally good. •Identify potential markets for •Further discussions with Begonia society •Dave Finch/Steve Allen •2013 “ heritage stock ” plants and other interested societies. Possibility of on-line sales to be evaluated.
Financial Position Working with Financial Services we have examined the costs of the nursery and compared these with the projected costs of outsourcing. Taking all factors into account, and enabling the redeployment of nursery staff, the cost benefit of outsourcing is reduced to approx £12,000 in 2014/15 based on current budgets. This figure assumes that there is no increase in the cost of plants purchased externally. The above does not include savings or efficiencies arising from the proposals as set out in the business plan. These should enable us to close the gap further.
Financial Position It is also assumed that building repair costs remain static. Some information suggests that these costs could significantly increase in future years but our view is that we can minimise these costs by undertaking minor repair work in-house. The replacement of the boilers has been highlighted as a significant risk with replacement boilers costing in the order of £20,000 each. However, work undertaken would suggest that we move to biomass boilers which could effectively be self-financing and reduce fuel costs significantly (a potential saving of at least £6,000/annum).
Other Considerations An issue which needs consideration is the Dean Road depot relocation project. As part of the project a requirement has been identified for a Scarborough Sub- depot in the town centre area. This is a working base for the street cleansing staff who are pedestrian (using street cleansing barrows etc.) An establishment cost for the sub-depot is budgeted at £20,000 with unknown revenue costs. If the nursery site is retained this could serve as the sub-depot saving the £20,000 capital and future revenue costs.
Other Considerations A further issue is that of the heritage varieties we currently hold and propagate from. If the nursery is closed what will happen to this historically valuable stock? The answer is far from clear. Our discussions with Aldby seem to indicate that they do not wish to look after this stock. It was not part of the framework agreement as this relates only to annual bedding plants so we would need to ensure that it can be properly cared for.
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