AGENDA ITEM
6
BOROUGH OF POOLE
ENVIRONMENT OVERVIEW AND SCRUTINY COMMITTEE
9 FEBRUARY 2012
PROPOSED CEMETERY AT MAGNA ROAD
PART OF THE PUBLISHED FORWARD PLAN
YES
STATUS (Strategic)
1.
Purpose
1.1
To update Members on options for the Council provision of a new cemetery
and recommend the way forward.
2.
Decision(s) Required
2.1
Members are asked to recommend that Cabinet approves the Policy of
providing a new cemetery on land at Magna Road within the Medium Term
Financial Plan, subject to agreement with Bournemouth Borough Council.
3.
Background Information
3.1
In September 2010 the Head of Leisure Services took a report to the
Environment Overview and Scrutiny Committee for Members to consider
options for providing earth burials in Poole. The option of no longer providing
non-ashes burials in Poole was considered (the statutory duty of providing for
disposal of the dead could be met through cremation or private burial facilities
near to Poole) and rejected. The Council are however at risk of no longer
being able to provide burial facilities in Poole within the near future, due to the
lack of space within the near future.
3.2
Members of the Committee recommended and Cabinet subsequently
approved the reopening for burials of Branksome and Poole Cemeteries and
that:
The Head of Leisure Services be asked to investigate the means to provide or
procure a new Cemetery at the Canford Magna site and report back to a
future Meeting of the Overview and scrutiny Committee.
3.3
Poole has around 80 non-ashes burials a year and at the current rate the
Borough will run out of burial space in 2012. Whist the number of annual
registered deaths in Poole has remained broadly stable, over the last 5 years
there has been a general decrease in the number of burials undertaken within
Poole Cemeteries. Officers consider that there are 2 reasons for this:
 the limited offer in Poole’s existing Cemeteries (including limited capacity).
Currently only Poole and Branksome Cemeteries have space to bury.
Even in these Cemeteries, space is at a premium and the choice of plots
that the bereaved families are able to be offered is small; and
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
the number of alternatives available within the local market.
3.3
The Borough of Poole and Bournemouth Borough Council jointly own the
Land at Magna Road, which both authorities have identified for use as a
possible cemetery. The Land comprises approximately 10.6 ha, best
described as agricultural grazing land. There is gated access from Magna
Road which has been secured against unauthorised access and a further
entrance on the eastern side, which is accessible from Canford Arena.
3.4
Bournemouth Borough Council has indicated that its Cemeteries have burial
capacity for the next 10-15 years. Bournemouth Borough Council officers
have indicated that it is unlikely to be a capital funding priority at this time.
3.5
The Land is designated as Green Belt but has no other policy constraints. In
1995 planning permission was granted by the Borough of Poole for the use of
the Land as a cemetery (App 5/95/22892/011/W). This Planning Permission
was renewed in 2000 (App 00/22892/W/017) but has since lapsed. A new
planning permission will be required.
3.6
Borough of Poole Planning & Regeneration Services have advised that the
use of the Land as a cemetery is acceptable in policy terms and that it meets
the limited development opportunities for Green Belt, as set out in the
Planning Policy Guidance 2 ‘Green Belts’.
3.7
While the design has yet to be finalised, there is a balance to be achieved
between initial infrastructure costs and the need to maximise the burial space
on the Site for the next 15 years.
4.
Financial Implications
4.1
The financial modelling has been based on a proposal for a new highway
access off Magna Road directly into the Cemetery Site, providing a new
entrance with signs and gates and parking for approximately 50 cars. There
will need to be a shelter on Site, welfare facilities and the provision of water
and electricity. Leisure Services will also need a vehicle store for operational
reasons. As not all the Land is to be developed at the outset the proposals
should include site security, including within the Site, to protect from illegal
access.
4.2
Leisure Services and Financial Services do not consider that the provision of
a new cemetery will adversely impact on the Crematorium income.
4.3
The initial financial work has been undertaken using different scenarios of
burial activity at the new Site and has projected annual net cash flows for the
new Site based on 60 new burials each year, as figures suggest this is a
realistic estimate of likely burial activity. It has excluded the burial of cremated
remains but the option should be considered against the background of new
provision at the Crematorium.
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4.4
A Capital investment of £225k is required to fund the Project.
4.5
Officers have considered whether the investment is best funded from
Prudential Borrowing (will incur borrowing costs) or through Council Capital
Contribution (nil borrowing). As
a) the scale of investment required is relatively small and
b) financial analysis has demonstrated the ability for investment to be
recovered within 7 years, based on annual surpluses generated from 60 new
burials per year, or 11.6 years based on annual surpluses generated from 50
new burials per year,
it is proposed that the Project is funded through Council Capital Contribution.
This will save the Council £68k interest repayments that would otherwise be
incurred through Prudential borrowing based on borrowing £225k over 15
years at interest rate of 4.05% (rate as at September 2011).
4.6
Core operational expenses (grave digging, cemetery site supervision and
administration) on the new Site will be funded through capacity within the
existing Cemetery Services Team. The new Cemetery will however require
additional Council funding for site/grounds maintenance, utilities, equipment
and security. This is expected to be £53.5k per annum, which has been
included in the financial appraisal (see 4.5).
4.7
It is proposed that fee income will be derived from a new pricing schedule
developed for the new Cemetery. This will consider how Poole’s current
interment fees compare with neighbouring authorities and private local
providers and what fee structure should be applied in the new Cemetery. The
pricing schedule will also determine the most appropriate length of lease for
burial plots and consider the capacity to introduce new burial packages not
currently offered in Poole’s existing Cemeteries (e.g. pre-purchased plots,
hierarchy of plots).
4.8
Officers have also considered how the investment in the Cemetery compares
with alternative investments as the Council is under no statutory obligation to
provide a new Cemetery. Should the new Cemetery attract 60 new burials a
year, annual surpluses arising will be equivalent to a 13% rate of return on
initial investment of £225k. Given current market conditions this appears to be
sound investment.
4.9
The key assumptions used in the financial viability analysis are contained in
Annexe 1.
5
Legal Implications
5.1
The Borough of Poole is a Burial Authority by virtue of s.214 (1) of the Local
Government Act 1972 and has discretionary power to provide cemeteries.
While this is a discretionary power, the Council does have various statutory
duties that it may be unable to fulfil if burial provision is unavailable.
5.2
Section 46 of the Public Health (Control of Disease) Act 1984 imposes a duty
on a Burial Authority to dispose of the body of any person who has died or
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been found dead within their area where there is no other person to make
arrangements. However they must not cause the body to be cremated where
they have reason to believe that cremation would be contrary to the wishes of
the deceased. The Council is currently able to fulfil its statutory obligation, as
proper disposal of the dead is possible either by cremation or by the use of
other cemeteries outside the Borough. The cremation option is unacceptable
to some faiths and for people who for various reasons require burial rather
than cremation.
5.3
The agreement of Bournemouth Borough Council is essential before any work
commences on this Land.
5.4
Leisure Services have had initial discussions with officers from Bournemouth
Borough Council who have indicated that they would be willing to recommend
proceeding by way of a 15-year lease or management agreement. The terms
of this agreement would be subject to negotiations and to the approval of the
Bournemouth Cabinet, but the terms are likely to be along the following lines:
5.4.1 The Borough of Poole, at its own cost, is to be responsible for:
 The design of the new Cemetery, subject to the approval of the Borough of
Bournemouth (such consent not to be unreasonably withheld);
 Securing planning consent for the development;
 All construction works;
 Day-to-day management of the Cemetery.
5.4.2 Financial arrangements:
 The Borough of Poole would set charges in consultation with Bournemouth
BC and would collect the income generated from the operation of the
Cemetery;
 The following expenditure will be offset against this income in accordance
with annual budgets prepared by the Borough of Poole in consultation with
Bournemouth BC;
 Recovery of the cost of the construction of the Cemetery, including fees, in
accordance with a cost plan previously approved by both Councils;
 Interest on any prudential borrowing obtained to fund these capital costs;
 Day-to-day running expenses;
 A management fee;
 Any surplus generated after deductions of these sums would either be
reinvested in new capital works in the Cemetery, retained as a sinking
fund to cover future renewals, or be distributed between the two
Boroughs. In practice, no surplus will arise until the initial capital
investment, plus any interest, has been repaid.
5.4.3 Policies for site and burial management including regulations to be agreed by
both Councils. However, as an overriding principle, the Cemetery would be
available for burials for both Poole and Bournemouth residents and the
normal practice of double fee charging would only apply to people residing
outside of these two Boroughs.
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5.4.4 At the end of the 15-year Term it is likely that a new lease or management
agreement would be negotiated on similar terms. Any under-recovery of
capital investment or need for further works would be addressed as part of
those negotiations.
6.
Risk Management Implications
6.1
Gross risk
Gross
risk
score
H/M/L
M
1
Capital investment project
costs are not fully
understood/properly costed
2
New cemetery fails to attract
sufficient interest from the
public (e.g. too remote a
location, other local
providers)
M
3
New cemetery will require
Council subsidy each year in
addition to initial capital
investment
H
4
Demand outweighs planned
burial capacity in existing
design
M
5
Bournemouth Borough
Council fails to agree with the
BoP proposals
H
Mitigation
Officer engagement with
Transportation, Planning, Legal etc
to determine project costs
Contingency of 10% applied to
reflect level of uncertainty in initial
financial viability work
Unique selling point
Fees benchmarking work
Other burial services (e.g. hierarchy
of plots)
Pre-purchased plots
Other faith burials
Key cost in existing cemeteries is
maintenance spend. This will be
curtailed in new cemetery from
strict enforcement of planned
layout
Flexibility of layout – initial designs
have deliberately provided for
additional burial space to be
accommodated if required
Continuing discussions between
officers but there is a residual risk
that might stall.
Residual
risk
score
H/M/L
L
L
M/L
L
L
7.
Equalities Implications
7.1
Detailed equality impact assessments are required particularly regarding faith
and specific consultation is intended in this respect.
8.
Conclusion
8.1
Detailed financial investigation shows that a Council provided and operated
new cemetery is feasible without increasing operation costs and with capital
investment fully repaid.
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Clive Smith
Head of Leisure Services
Contact officers:
Richard Nicholson
Greenspace Development Team Leader
Leisure Services
(01202 261347)
Shirley Haider
Management Auditor
Financial Services
(01202 633528)
Background Papers
Environment Overview and Scrutiny Committee, 6th September 2010, report by Head
of Leisure Services
Report to Cabinet: Future Provision of earth burials in Poole: Report of the Chairman
of the Environment Overview and Scrutiny Committee 12th October 2010
Cemetery Development Services, June 2010, A Strategy Document for the
development of new cemetery provision at Magna Road
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ANNEXE 1
FINANCIAL INFORMATION
Key Assumptions used in Financial Viability Analysis
a) Project has been appraised over a 15 year period. This is aligned with the
period for which Poole is expected to have sole use of the site
(Bournemouth have capacity within existing cemeteries for the next 10-15
years). As Poole expects to fund all infrastructure investment without
contribution from Bournemouth, financial viability work is focussed on
whether this investment can be recovered prior to Bournemouth joining in
year 15.
b) Initial capital investment of £225k (funded wholly from Poole Council
Capital Contribution and not from Prudential Borrowing) has been used
within viability work. Additional infrastructure repair spend of £5k is
factored in at 5 yearly intervals.
c) Additional annual maintenance spend of £53.5k per annum (mostly salary
related), increasing by 2.5% each year.
d) Marketing spend is included in financial calculations, weighted towards the
earlier years of the project (when more marketing will be required).
e) Fee income from the sale of pre-purchased plots has been included within
the financial viability analysis – this is based on a cautious estimate of the
sale of only 6 pre-purchased plots (increasing to only 9 in year 15) each
year. For context, Bournemouth currently sells around 30 pre-purchased
plots each year. Fees of £500 per plot have been used, increasing by
3.25% per annum.
f) Anticipated annual fee income for adult interment is calculated based on
current average fee of £1,350 – also increasing by 3.25% per annum over
the life of the project. This is a cautious estimate of fee income as it is
based on current fee prices only.
g) It is clear that the financial viability of the new cemetery depends on the
number of new burials undertaken each year. Given that activity in this
area has been falling over time (see A1) and demand for the new
cemetery is not fully understood, financial viability calculations have been
calculated using different estimates of 40, 45, 50 and 60 new burials each
year (with no increase/decrease in activity in subsequent years).
h) Financial viability is based on burial activity only. As not all of the site is
required for burials, there is the potential to generate additional income
from alternative land use for part of the site – e.g. allotments, community
farm, and driving range. Both Bournemouth Borough Council and the
Borough of Poole Planning Services will need to be involved in
understanding capacity for this.
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