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New Lodge Spa Financially Questionable - Herts Advertiser - 21 October 2010.

posted 21 Oct 2010, 13:28 by David Gilroy   [ updated 3 Nov 2010, 15:18 ]
PoolTooSmall has long questioned the technical competence of the SADC IN HOUSE Project Team . Now we turn to the finances of this flawed scheme and they don't stack up ! Here's why .


St.Albans  District Council (SADC) blundered , after years of spin and casuistry , by  getting the New Lodge Main Pool size wrong. Cllr Robert Donald and his fellow buckpassers ( also known as duckshovers ) then wrung their hands saying:-  “But we’ve spent £1.5 million in consultancy fees messing the whole thing up so we can’t turn back now ”. And to compound it I have uncovered  the harsh reality of the New Lodge Spa finances as the Coalition Government this week goes  about axing grants to Councils by between 25% and 40 % for the next few years!

SADC  refused several months ago to give campaign group PoolTooSmall their business plan for the project – so much for the so called “democracy “ we live in!  However,  various  SADC Committee documents with  financial information are in the public domain and I have been able to form an expert view of what is being proposed and the consequences. I am now going to present a simple financial analysis of why the Spa aspect of this scheme is another blunder – a gross frippage in a recession! Mud baths and scented saunas while the Main Pool will need wrist bands to control future swimming overload as the years and decades go by!

I refer to various  published SADC  documents specifically :-

SADC Overview and Scrutiny Meeting 19 July 2010.Appendix 2. Options Cost Variance.

 Spa capital cost £2.925 million (not included in 2007 scheme ).

“Prudential Borrowing” interest rate- 4.85% pa. Amortisation period -straight line capital repayment over 25 years .

It is easy to understand what is is going on . The Council is effectively taking out a mortgage on a new property that may well physically last 50 years or more but for financial reasons wishes to pay it off over 25 years .Like you and I with the  mortgages on our homes , we pay off some capital and some interest as we go along .Let’s look at Year One as a fair approach to it all.

One twenty fifth of £2.95 million is £118k of capital repayment.

One year’s interest on all the capital at 4.85%pa is £143k.

Running the Spa alone I estimate at £100k pa – that’s operating staff, heating , lighting,  management and, dare I say it , materials for scented baths and mud treatments! No beauticians or other “fripperies” included. So  JUST TO BREAK EVEN let’s add this lot up for Year One alone.

£118k + £143k + £100k = £361k.

Let us now assume that the New Lodge is open 361 days per year . So on average from Day 1 for the first year just to break even ON THE SPA ALONE you need to take in £1000 per day ! Do you realise what that entails? It suggests that you need 50 people turning up EVERY DAY for 361 days in a row and spending £20 each to make the Spa alone break even. This simply won’t happen. This at the People’s Pool with local competition from Nuffield , Sopwell and Fitness First  etc it simply does not stack up! So franchise a treatment room or 2 out – will that work –no! One industry insider agreed and said that what the Council would probably do is hide the costs in with “memberships “ and hope the public fall for it ! That could mean that whatever the present WLLC membership is NOW it could increase by up to £30 per month JUST FOR THE SPA alone! The Project Manager , Ms Julie Simpson, can buy a lot of swimming wristbands for that !

SADC  “cheapskated” on the “Jewel in the Crown”  the Main Pool size.Their treatment of and consultation with the Abbey Theatre over the New Lodge in general and it’s service road in particular have been an absolute disgrace. Specifically in virtually encircling the Theatre on 3 sides- see SADC’s own plans – SADC have shown themselves to be selfish and inconsiderate.

This buckpassing SADC also  ran the St.Albans Diving Club out of the City after 30 plus  years because “there were diving boards at Hatfield and  Hemel “. And in a week when Team GB is winning gold at the Commonwealth Games in diving events where are the future divers of a city like St.Albans going to train to be World class ?

All in all SADC have blundered on the specification for the New Lodge and have compounded it with politically driven questionable financial schemes. Not just the Spa but another example,  the Confidence Pool at an exorbitant £513k – literally another CON from the SADC  spinning studio!

And SADC  plan,  I believe, to sell off both the Ridgeway homeless venue  for  £6 million and cut funding for the women’s refuge – what a mockery–so that others can wallow in the mud spa! So New Lodge In House Project Team ,hang your heads in shame . This is NOT a criticism of the Project Team’s external contractors and bidders but those IN HOUSE and in control since about year 2004 with a selfish political agenda for the New Lodge. This is a wasted opportunity that comes only every 40 years or so and the SADC have blown it! And they know it as the London Olympics approach in 2012.

PoolTooSmall and many of St.Albans’ citizens will NOT roll over in the face of SADC’s appalling mismanagement  on this issue. No contracts have been signed yet or should be.This SADC knows full well that it has alienated many in St.Albans with it’s political dogma and is now going to attempt to bludgeon through it’s financially flawed scheme.Remember , behind the spin of this SADC , this scheme is a disgrace and as and when it hits financial trouble it’s the people who will pick up the tab in higher Council Tax charges . And where by then will be Councillor Sheila Burton , the original “mastermind” of the scheme , SADC leader Councillor Donald and the other  buckpassing spinmongers? Chilling out by a pool in Sandridgebury ?

There is another way – it is not too late- go back to the drawing board for a fresh  start NOW !

Eur. Ing. David L.Gilroy. M.Sc. C.Eng. MIET.