Summary Briefing

The Vision

January 2013

Our vision is to see Waterworld reopened and sustainably operated as a not-for-profit leisure facility, meeting the needs of what our user survey1 has shown to be its core user groups families, young children and disabled users. The vision for a reopened Waterworld is based on the following: A leisure destination with a reconfigured entrance and a significantly enhanced soft play area A viable and financially sustainable business requiring a substantially reduced subsidy An inclusive hub for health and well-being, capitalising its suitability for young children, the elderly and the disabled. This vision will be delivered by making more of the pools natural advantages, namely the beach access and warm water temperature, establishing a broader community of users across Edinburgh; and securing continued investment from CEC, albeit at a lower and declining level.

The Proposal
Splashback has identified a roadmap to the reopening of Waterworld. Rather than seek the transfer of Waterworld to the community today, our plan aims to highlight opportunities and challenge assumptions, and provide comfort to the City of Edinburgh Council that going further along this roadmap is worthwhile. We believe that our proposal shows the City of Edinburgh Council (CEC) that this is a journey worth taking. Our proposal is to move to an establishment and detailed feasibility phase, with the incorporation of the Scottish Charitable Incorporated Organisation (SCIO) and appointment of a Development Manager. A further review and decision to proceed would be required by CEC and the SCIO board in six months at the conclusion of the detailed feasibility phase, with a view to reopening the facility in October 2013 should this be positive. Our business plan covers the first three years of operation, which Splashback believes is a reasonable period to demonstrate the facilitys potential for becoming financially stable and sustainable. Implicit in our bid is the transfer of the Leith Waterworld long leasehold to the proposed SCIO for a nominal consideration of 1, and the granting of a justifiable operating subsidy by City of Edinburgh Council.

Why save Waterworld? The social context

Waterworld is an important social asset for Leith and Edinburgh as a whole. It was widely valued especially by families with young children and the disabled for its unique features, including warmer water temperature and graded beach area allowing easy access for non-swimmers, early swimmers and those with physical impairments.

It attracted more than 120,000 visits per year, despite only being open three days a week (apart from school holidays) and benefiting from very little marketing and promotion. Waterworld did not just offer physical accessibility; it was clearly seen as a facility for the whole community and was enjoyed by people from all backgrounds. Splashbacks survey of residents1, conducted between May and August 2012, showed that threequarters of respondents are swimming less since the pool closed. This clearly demonstrates the impact of the closure felt by the residents of Leith, the capital and beyond. In our initial bid2, submitted to the Council on 7 August 2012, we showed how Waterworld can contribute to national and local priorities and policies for health & well-being, early years, sport, economic development, employment and tourism, among others. Since then, we have noted with interest the Save the Children campaign GET IN to Swimming, which identifies that children and young people living in poverty are less likely to be able to swim than other young people, and participate in swimming and other leisure activities less often. Save the Children highlights the fact that 25% of all children in Scotland (some 250,000 young people, 18,000 in Edinburgh) cannot swim when they leave primary school, and Scottish Swimming research suggests this figure is highest in deprived areas3. Not being able to swim, affordability and accessibility are seen as key barriers by the Save the Children campaign. We also noted Greener Leiths recent report4 identifying Leith as a deprived area. According to the Scottish Index of Multiple Deprivation, Leith has six zones in the bottom 20%, i.e. some of the most deprived areas in Scotland. A third of all children in Leith (approx. 2,700 under 16s) live in poverty. Finally, we note that Edinburgh Leisure, in its Sport & Physical Activity Development Plan 20122015, outlines its goal to achieve greater participation, in particular from children and those from deprived backgrounds. The Scottish Governments national Top Up Scheme, which aims to ensure all children are able to swim, specifically aims to reach 500 additional children in Edinburgh, just 3% of the approx 16,000 primary aged children who cant swim in the city. We believe that appropriate facilities are the best way to target resources, rather than costly interventions. We believe Waterworld can play a key role in Leith and the wider city in meeting these goals by increasing childrens participation in leisure activities, encouraging healthy lifestyles and supporting families and young people in an area of known social deprivation.

Funding, Finance and Sustainability

We plan to make Waterworld financially sustainable and viable by: Introducing significant new income streams Showing that continuing to operate Waterworld on an equivalent basis to how it was run, but with changes to staffing and usage, represents good value to the community Ensuring the medium term sustainability of the facility. The single biggest financial impact is derived from the re-configuration of the entrance of

Waterworld to allow it to accommodate a three-tier soft play area within the atrium. Splashback has commissioned architects who have demonstrated that the pool can also accommodate a toddler play area, party /event room and caf. These facilities can open 7 days a week. Splashback have also taken independent advice on the capital investment required to recommission the pool. Our conclusion is that a prudent and robust approach could lead to significant cost savings on Edinburgh Leisures estimate for this process. a. Continuing to operate on an equivalent basis Our financial analysis of Waterworld is based on usages, revenues and costs provided by Edinburgh Leisure, and reasonable assumptions. Operating on a like-for-like basis, we believe we could reduce operating loss from 340,000 in 2011, to 273,000 in Year 1 after reopening, 249,000 in Year 2 and 223,000 in Year 3. The improvement in operating loss is achieved by: more intensive use of the facility (i.e. opening at least four days a week instead of three); changes to the staffing structure; and increasing the spend per visit. We believe that this equivalent basis and the implied subsidy required, would place Waterworld solidly within its peer group of community pool operators, especially those aimed at families and special needs groups in Scotland. b. Introducing new revenue streams Beyond operating Waterworld on an equivalent basis, we plan to further improve the financial sustainability of the facility by developing a number of new income streams. We estimate these could contribute (per annum): Soft play dry activity: From 35,000 in year 1 to 120,000 in year 3 Cafe sales and hire Circa 5,000 per annum Additional days opening Approx 30,000 per annum Improved retail offering: Circa 15,000 Restricted use opening: Circa 14,000 Through the introduction of such additional income streams, we believe the annual subsidy required would be significantly reduced. Our financial analysis of the opportunity at Leith Waterworld to build a community venue incorporating soft play, caf, enhanced retail and maximised usage shows that the facility could operate with a loss in year 1 of 192,572, a year 2 loss of 75,953 and a year 3 loss of 19,829. c. Medium Term Sustainability We believe charitable status, alignment with national goals and policies, and close ties with the Leith community will all help us to obtain the necessary financial and commercial support. Waterworld is in an area of multiple deprivation, is a unique facility for children, users with disabilities, trains and employs a high proportion of young people, and is a gateway for first-time employment. As such we believe we would be eligible for a wide range of grants and support. Our detailed financial analysis and projections are available on request. Facility analysis of Leith Waterworld The Waterworld property was purpose-built as a leisure pool at the cost of 14m in 1993. Following a number of site visits accompanied by independent experts, City of Edinburgh Council and Edinburgh Leisure staff, we believe there is a consensus acceptance that the property itself

is in good condition, and fundamentally fit for purpose for accommodating a wet facility in future. A reputable local architecture partnership has provided a reconfiguration proposal for Leith Waterworld that would not impact the existing leisure pool configuration. It demonstrates that the venue could easily be adapted to accommodate a retail area, a three-level soft play facility, a toddler play area, a caf with substantial seating, viewing access to both the pool and the soft play areas, and requisite WC facilities. The pool plant has been well maintained. Of the estimated re-commissioning costs, which are in the range of 70,000 to 155,000, approximately 50% are capital in nature and will benefit the facility for years to come. Our financial case makes provision for combined maintenance (80,000) and capital spend of 140,000 per annum. We believe this substantial allocation, together with new revenue streams, would go a long way to meeting the practical capital funding requirements of Waterworld over the medium term. The City of Edinburgh Council subsidy Our proposal centres on Waterworld being a pool that is financially sustainable. The figures provided within our business plan demonstrate that this is achievable. While it is our position that subsidising Waterworld is an investment that pays itself back through the health and well-being of the population, we can show that more efficient management, streamlined staffing, a revised structure of entry fees and other basic measures can reduce the required level of subsidy. A community-owned pool would still require support from CEC in some form; however we are confident that it will be less than currently required. City of Edinburgh Council (CEC) Safeguards We propose a number of safeguards to address Councillors concerns and to ensure our business plan may be confidently implemented. These include: Significant Councillor and/or CEC representation on the Waterworld Board. CEC vetoes in key areas such as pool operator selection and change of use of the property Commitment to reduce the CEC subsidy if the facility makes a profit Reversion of Leasehold to CEC in certain agreed circumstances Key go/no-go milestones in the negotiation and reopening process.

We believe that our proposal highlights a fantastic opportunity for the city to re-energise and reopen a well-loved and well-used asset, that both Leith and the Capital can be proud of.

NOTES:
1

Survey conducted between 15 May and 6 August 2012, 800 responses. A summary of results is available on the Splashback website (see below)
2

Community bid submitted to CEC on 7 August 2012. Full bid document is available on our website. MacDonald, S. (2010) Just Add Water Scottish Swimming 4 Greener Leith Is Leith a deprived neighbourhood www.greenerleith.org
3