Brighton & Hove City Council - Agenda item - Royal Pavilion and Museums Trust Arrangements

Extract from the proceedings of the Tourism, Development & Culture Committee meeting held on the 15 January 2018 (to follow); together with a report of the Executive Director Economy, Environment & Culture

That the Policy Resources and Growth Committee:

1) Notes the report and associated information.

2) Agrees the proposal to move the management of the service to a single trust in one stage rather than two stages, but subject to a delay in the proposed timetable of a further 3 months to 1^st July 2018 to take into account concerns raise by staff and allow for further engagement with staff and unions, including engagement with Brighton Dome & Festival staff and management, and for a clear programme of this further staff engagement to be communicated in writing

3) Agrees the proposal to proceed by way of a contract for services with BDFL, rather than a grant;

4) Approves the principal terms of the transaction as set out in Appendix 1 and Appendix 3 and notes the indicative (draft) heads of terms in Appendices 1a and 1b;

5) Approves the policies set out in Appendix 2 which establish the basis on which the charity will manage the museum collection, and notes that the remaining policies currently in the process of being updated will be considered for adoption by the Tourism, Development & Culture Committee on 8 March 2018, and that the BDFL Board will be required to adopt them under the terms of the service contract;

6) Agrees a service fee to be paid to BDFL in accordance with the terms of the service contract. In 2018/19, this will be a proportion of the planned resources of £1.181m (subject to negotiation to take account of the phasing of the budget over the year). In 2019/20 the fee will be £1.119m and in 2020/21, the fee will be £1.065m;

7) Notes the intention to award a conditional grant from Modernisation Funding to support BDFL with start-up costs following approval of a business case by the Corporate Modernisation Delivery Board.

8) Delegates authority to the Monitoring Officer, in liaison with the Executive Director for Economy, Environment & Culture, to consult with the Charity Commission and amend the governing documents of Preston Manor, as set out in 3.11 below;

9) Authorises the Executive Director for Economy, Environment & Culture, after consultation with the Monitoring Officer and the Section 151 Officer to finalise negotiations with the Trust, and take all steps necessary or incidental to the implementation of the proposals, including determining the final contract fee and maintenance contribution for 2018/19, authorising any grant required as described at 2.1.7 above, and seeking the consent of the Secretary of State (if necessary) in relation to the leases; and

10) Authorises the Monitoring Officer to prepare and execute any documents or agreements necessary to give effect to the proposals.

82.1 The Committee considered a report of the Executive Director, Economy, Environment & Culture that sought approval for the steps necessary to transfer the Royal Pavilion and Museums from the City Council to a charitable entity (“the Trust”) that would have the responsibility of managing the Royal Pavilion and Museums, the Brighton Dome & Brighton Festival and the Music & Arts Service. The report also provided a minute extract detailing the consideration of the report and associated recommendations by the Tourism, Development & Culture (TD&C) Committee.

82.2 The Chair stated that there was no more important building in the city than the Royal Pavilion and it was an iconic symbol of the city’s culture and heritage. The Chair stressed the importance of securing the Pavilion for future generations and in the context of decreasing public service funding, difficult decisions would have to be made. The Chair highlighted that the proposed transfer to non-profit, charitable Trust status did not represent privatisation and the council would still own the buildings and would be an equal partner on the Trust Board. The Chair added that there must be every realistic guarantee on staff roles, pensions, pay and terms and conditions and that it was his personal guarantee that he would ask of council officers and Brighton Dome & Festival Trust that viable terms were in place well before the new Trust was launched.

82.3 Councillor Wealls asked for clarification on when Members were first informed that there may be opposition by employees to the transfer as he was only made aware of such issues recently. Councillor Wealls welcomed the comments made by the Chair asked if there would be an opportunity to include such commitments in the Heads of Terms (HoT) in the interest of the workforce.

82.4 The Executive Director, Economy, Environment & Culture answered that the process of a joint status with Brighton Dome & Festival had emerged in October 2017. Discussions were then held with lead Members and then union and staff representatives in November with staff anxiety becoming apparent in December. A meeting of the Joint Staff Consultation Forum (JSCF) was held on 8 January 2018 to discuss those concerns amongst Members and union representatives with a further meeting held on 22 January 2018. The Executive Director, Economy, Environment & Culture supplemented that a staff reference group had been in existence throughout the process and staff had become increasingly engaged with that group. The Executive Director, Economy, Environment & Culture added that the staff protections would be given through the TUPE process but officers would also do as much as possible to enshrine commitments in the HoT’s on the basis of legal advice.

82.5 The Chair stated that Councillor Robins as the Executive Member had kept the administration regularly updated throughout the process and he and other Members had been well-briefed on the staff viewpoint via the discussions at JSCF.

82.6 Referring to the financial table on page 96, Councillor Janio asked if the figures had changed over the past few months as it appeared the taper rate had become better for the Trust. Councillor Janio asked for confirmation that engagement on the single stage transfer had begun in September and what would happen to Pavilion and Museum support staff not transferred to Brighton Dome & Festival.

82.7 The Executive Director, Economy, Environment & Culture clarified that the financial commitments and projections had remained the same. Furthermore, the budget papers considered by the committee at its meeting in November 2017 had deferred the identified savings to enable the Trust to have the best start under its new status as possible. The Executive Director, Economy, Environment & Culture confirmed that there has been engagement throughout the project with a staff reference group. The proposal to move to a single trust started to be considered in September and we talked to staff in November with engagement increasing as the project had progressed. The Arts & Culture Programme Director added that support staff would be not be transferred to the new Trust.

82.8 Councillor Bell stated that the staff at the Royal Pavilion and Museums had been not been properly engaged with and this had led to disenfranchisement. Councillor Bell added that the process had been poorly managed by the administration and instead of staff looking forward to the new opportunity, there was the risk of strike action. Councillor Bell asked why meaningful engagement had not been undertaken until this point leading to a postponement of three months and why staff had not been treated in a fair and reasonable manner.

82.9 The Chair stated that he did not agree with the assessment made by Councillor Bell. There was a clear process to undertake and that had changed with the decision to move to a single stage transfer. The Chair noted that TD&C Committee had unanimously agreed to extend the consultation with staff and discussions would also continue through the JSCF.

82.10 Councillor Peltzer Dunn stated that he shared the misgivings expressed regarding the breakdown in staff relations. Councillor Peltzer Dunn noted that the motion moved by Councillor Robins at the TD&C Committee meeting on 11 January had expressed the need to account for ‘meaningful engagement’ yet paragraph 3.12 of the report before this committee detailed the need for ‘further meaningful engagement’. Councillor Peltzer Dunn noted that in view of the meetings scheduled on pages 198 and 199 of the agenda, the latter appeared correct. Councillor Peltzer Dunn asked for clarification on the likely consequence to the proposed timeline should the further consultation result in an inconclusive outcome. Furthermore, Councillor Peltzer Dunn noted that in the minutes of the TD&C Committee meeting held on 11 January, Councillor Robins had stated that if necessary, the transfer process could change to a two stage process that appeared to contradict the recommendation made to this committee.

82.11 The Chair clarified that the recommendation this committee were considering was a single stage transfer with the aim of creating a viable Trust, a better place for staff and to secure the future of the Royal Pavilion.

82.12 The Executive Director, Economy, Environment & Culture replied that there had been a process of staff engagement and the meetings detailed on page 198 of the agenda had been taking place. Of the staff attending, some had expressed anxiety but not all were against the proposals. The Executive Director, Economy, Environment & Culture added that the schedule of meetings was just the beginning and officers would continue to engage with the staff affected. The Executive Director, Economy, Environment & Culture explained that the report set out clear reasons why a single stage process was recommended over a two stage process and the financial implications of the report set out the potential for increased disruption inherent in the two stage process. The Executive Director, Economy, Environment & Culture added that the broad approach of the Trust recommended better reflected the approach taken by funders such as the Arts Council and the ability to secure funding was essential to the future of the Royal Pavilion.

82.13 Councillor Peltzer Dunn noted that Councillor Robins had suggested that a two stage process was still possible and asked the Chair whether he agreed or disagreed with that viewpoint.

82.14 The Chair stated that the decision for this committee was to consider the recommendation for a single stage transfer and that option was viewed to have lower risk.

82.15 Councillor Mac Cafferty stated that he welcomed the comments made about the Royal Pavilion and Museum staff who were very passionate and undertook important work. Councillor Mac Cafferty noted the repeated requests made by his Group since 2015 about fair contractual terms for all staff likely to transfer, assurances on Living Wage schemes and commitment to recognise staff in a trade union and any other employer schemes. Councillor Mac Cafferty expressed his disappointment that none of that was detailed in the report or in the business case. In 2017, when agreement was made to transfer the Royal Pavilion and Museums to charitable trust status, his Group had requested cast-iron guarantees on the ethics of the Trust, assurances of the Living Wage to staff and meaningful consultation with staff and trade unions. Councillor Mac Cafferty contended that the issues raised by staff had been pointedly raised since 2015 and the administration had not handled the process in a responsible manner. Councillor Mac Cafferty stated that far better assurances and transparency was urgently required.

82.16 Councillor Gibson stated that he had wide-ranging concerns about the process and staff were clearly worried and unhappy. Councillor Gibson believed the process should be called to a pause in the interests of staff and to properly address the concerns raised.

82.17 The Chair noted that the committee had received recommendation to proceed from the TD&C Committee that had been unanimously approved at their meeting on 11 January. The Chair stated that if any Member of political group felt that there should be an alternative course of action, that should have been expressed either at that meeting or to this meeting by the required deadline.

82.18 Councillor Yates stated that the council had committed to the best levels of engagement with staff and trade unions and enacting a three month delay was the right thing to do to ensure the final agreement was right for all parties concerned. Councillor Yates observed that the financial position of the council was such that it could not guarantee the Royal Pavilion and Museums the future it deserved and entering an equal partnership agreement with an organisation that had a proven track record of delivering improvement was the best option. Councillor Yates stated that as long as the council received assurances that the arrangement would protect pay and conditions for existing staff and that the partnership would help drive investment and improvement in a crucial cultural landmark, the proposals would be of benefit to the city.

82.19 Councillor Gibson stated that it was clear there was a problem with industrial relations and understandable concerns about a one stage rather than a two stage process and the TUPE arrangements and Living Wage guarantees. These issues clearly needed to be resolved and rushing through the proposals would not be helpful and would likely lead to industrial action. Councillor Gibson stated that he believed the process should be paused and he would be voting against the report recommendations as he favoured more meaningful discussions.

82.20 The Chair replied that TD&C Committee had unanimously agreed the current proposal and that included recommending a one stage rather than two stage process. The Chair stated that no political group had made alternative proposals at that meeting, nor had any motion to amend the recommendations been made to this committee.

82.21 Councillor Janio stated that he believed the breakdown in trust that had occurred could be repaired and there was sufficient time to make a recovery. Councillor Janio added that it was important that the benefits and opportunities of moving to a Trust were clearly and succinctly made to staff. Councillor Janio noted that on the wider point of industrial relations, his Group and he would like to hear assurances from the administration that they would make every effort to follow the LGA Peer Review recommendations to resolve what he deemed to be a dysfunctional relationship between the administration and trade unions.

82.22 In response to the points raised by Councillor Gibson, Councillor Mitchell stated that she would contend that the reason why his colleagues had supported the recommendations at the TD&C Committee was because an extension for further consultation was exactly what had been agreed. Councillor Mitchell stated that she too believed the process had sufficient opportunity and time for resolution and the Trust had a bright future.

82.23 The Chair then put the recommendations to the vote that were carried.

82.24 RESOLVED- That the Policy Resources and Growth Committee: