06/18

DECISION UNDER DELEGATED POWERS
DECISION CANNOT BE TAKEN BEFORE
(APRIL 2018)
Title

DINOSAUR ISLE – PROCUREMENT OF AN INVESTMENT
PARTNER

Report to

REPORT OF THE CABINET MEMBER FOR RESOURCES
AND
CABINET MEMBER FOR ENVIRONMENT AND
HERITAGE

EXECUTIVE SUMMARY
1.

This report seeks agreement to undertake a procurement process in order to
bring forward a commercial partner/third party to invest in Dinosaur Isle, to
maintain and grow the facility in the longer term whilst retaining accredited
museum status. Accreditation compliant governance will be a mandatory
requirement of the tendering process. The council is keen to ensure that the
best approach is followed to achieve this goal.

2.

The area of Culver Parade, Sandown where Dinosaur Isle is located is
identified as a tourism opportunity area within the Island Plan and it is hoped
that commercial investment in this facility will lead to a wider regeneration of
this area of the Bay in line with the council’s emerging regeneration strategy.

3.

A procurement options paper is attached as Appendix 1 which sets out the
process to date, options available and recommended approach. This report
recommends that a procurement, under the Light Touch regime using the
Light Touch Regime style process is progressed in line with the
recommendation in Appendix 1.

BACKGROUND
4.

Dinosaur Isle is located on Culver Parade, Sandown and is part of an area
identified in the Island Plan as the Sandown Tourism Opportunity Area (TOA)
which was established to consider the future use of Isle of Wight Council and
third party land. The area is largely tourism related leisure uses where
constraints on development due to flooding restrictions have resulted in low
levels of investment and uncertainty around its future.
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 5.

The TOA recognises the challenges facing the Bay area, the town of
Sandown, and the fact that Dinosaur Isle (a key attraction) requires significant
investment due to its age and location in what is a hostile environment for a
building of its construction. It is estimated that going forward some £850,000
of investment is required for repairs and maintenance and £1million to
£2million in total if it is to be improved and modernised.

6.

Given the budget challenges faced by the council it is unlikely that the
authority will be able to prioritise the resources needed to address these
issues on its own.

7.

This project is seeking to identify a potential investment/development partner
to modernise and expand Dinosaur Isle and advance the regeneration of the
Bay area.

8.

This project was initiated in May 2016 and has to date:

9.

10.



undertaken desk research and initial interviews with key stakeholders;



identified issues affecting the town and museum;



agreed aims and objectives;



quantified physical and financial risks facing the museum;



freed the site from conditions of grant funding;



liaised with Isle of Wight Council staff and management of the facility;



run a soft market test exercise;



held a follow-up stakeholder engagement day;



refined and agreed revised criteria for success;



produced the procurement options paper along with a range of
underpinning documents.

In considering the future of Dinosaur Isle and its impact on the Bay area it has
been important to recognise that the museum plays three roles:


A visitor attraction.



An educational centre.



A world renowned scientific resource and Accredited Museum.

It comprises the land, building, staff and volunteers, and the collection. Each
needs specific attention and careful consideration of issues arising from
potential partnerships. Collections staff would need to be employed by a
governance body that is able to be accredited, while front of house staff could
work for a commercial partner. Criteria established through consultation will
be used as the basis for assessing proposals in the future so as to ensure an
appropriate balance of qualitative elements (e.g. maintaining the museum’s
2

 accreditation), quantitative performance (e.g. an increase in visitor numbers)
and wider public benefit.
11.

This work also recognises there are other significant limitations such as
planning constraints, the environmental sensitivity of the surrounding land,
legal issues (such as the lack of clarity around ‘ownership’ of the different
items in the collection), and the financial challenges of the authority in making
investment decisions between statutory and non-statutory services.

12.

Delivering a long term sustainable future for Dinosaur Isle is likely to require
significant capital investment; and may require another party to take
responsibility for part of the broader site with further expertise to maximise
financial returns and/or reduce risk. There are various ways in which these
needs could be met such as selling or leasing associated property, seeking
loans or grants, or entering into a joint venture.

13.

The council is interested in exploring the potential of a joint venture but is yet
to decide what degree of financial support (if any) it will bring to such an
arrangement. The idea of a joint venture was tentatively explored through a
soft market testing exercise which elicited a meaningful response from a small
but impressive selection of potential partners from the Island, mainland,
Europe and as far afield as Australia.

14.

The next stage is to agree how the council proceeds to bring forward this
investment sourcing opportunity and following the work undertaken to date, it
is recommended to then proceed with a procurement under the Light Touch
Regime process (as described in paragraph 21 below) to identify a partner.

15.

This will include undertaking further feasibility work on the use of other Isle of
Wight Council land adjoining Dinosaur Isle and the potential for the council to
remain involved in the future success of Dinosaur Isle as part of a partnership
arrangement.

16.

Accreditation compliant governance will be a mandatory requirement of this
process. The Museums Accreditation scheme is operated by Arts Council
England and sets nationally agreed standards for museums in the UK; it
identifies good practice guiding museums to be the best they can be, for
current and future users. It is internationally recognised as innovative, with
over 1700 museums within the scheme. Accreditation is about professional
standards of caring for, and using collections for the public benefit, it is about
continuously improving what the museum does to benefit its collections and
its users. Furthermore, it is about how the museum is managed and
overseen, its financial health and its commitment to environmental and ethical
standards.
Accreditation demonstrates that the museum has met
requirements for applications for funding from organisations such as the
Heritage Lottery Fund.

STRATEGIC CONTEXT
17.

The council’s corporate plan 2017 to 2020 seeks to deliver economic growth
and prosperity with a key activity being to consider opportunities to secure
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 long term sustainable access to the Island’s heritage.
The potential
investment and partnership approach to the future of Dinosaur Isle and this
part of the Bay will help deliver this and ensure that available resources are
used in the most effective way which is also a key objective of the council’s
strategic approach set out in the plan.

THE PROCUREMENT PROCESS
18.

Through engagement with potential bidders it has become clear that land
nearby the museum (including additional parking) is seen as important to the
success of a new visitor attraction as creating any further outdoor element
would require additional space. As such, further work is required on the
feasibility of including other Isle of Wight Council land including that which
does not directly adjoin the site but sits to the north beyond Browns Golf
Course.

19.

Market engagement has shown that there are likely to be competing
‘commercial’ interests in partnering Dinosaur Isle and use of nearby land. As
such any process used to select a preferred partner (including consortia)
needs to be open and competitive so as to ensure best value and
demonstrate public accountability. However, there is concern that traditional
‘formal’ processes can be inflexible and slow, and so a newer hybrid approach
is required.

20.

There may be important unknowns and still a wide range of potential
operating models that seem viable and so it would be wise to explore these
further before refining the council’s options. However, delaying the process
further is unlikely to generate much more useful further information as it has
been interaction with others that has recently been of most value. As such, a
process that enables this ongoing dialogue while progressing the actual
procurement would be beneficial. The Light Touch Regime is a process that
exists for exactly this purpose.

21.

The Light Touch Regime applies to all services listed under Schedule 3 of the
Public Contracts Regulations 2015 which includes museums. This process
allows a greater degree of discretion in how the procurement process is
undertaken which includes the ability to engage with the market and relevant
stakeholders pre procurement.
This has already taken pace via the
workshops at Dinosaur Isle in October last year. The regime also provides
the best method for considering options for the museum and its accreditation
and could for example allow for its separation from the overall operation of the
facility, if necessary. It also allows flexible use of any procurement procedure
provided its gives equal treatment to all parties and is transparent. The Light
Touch Regime is relatively new but sufficiently tested to be recommended as
the way forward.

22.

A timetable for the procurement process cannot be identified at this stage
given the options that the Light Touch Regime provides however, including
the development of the specification it is likely to be around 9-12 months.
4

 23.

The Light Touch Regime and any subsequent tendering process would
require the formation of an evaluation panel and it is proposed that this panel
would consider the procurement route and include representatives from the
staff/management of Dinosaur Isle unless a staff led bid for the future
operation of the facility was made.

CONSULTATION
24.

The council has undertaken a considerable amount of engagement with both
local stakeholders and potential investors during the past 12 months in order
to inform the process.

25.

As part of ‘soft market testing’ the council held an event at Dinosaur Isle in
October 2017 attended by more than 40 people from a range of interests.
This was largely an opportunity to provide information to attendees and also
enable a better understanding of the issues and challenges faced. As a result
of this event it was agreed to hold further stakeholder meetings for both
adjoining land owners and local interest groups and individuals. This was to
enable a better understanding of the council’s approach and help inform the
development of success criteria that reflect both the original broad aims of the
project and important ingredients in securing the museums ongoing success.

26.

The council will continue to engage with stakeholders as the project moves
forward.

FINANCIAL / BUDGET IMPLICATIONS
27.

The council manages the service delivered from Dinosaur Isle service and is
responsible for its revenue budget and staffing. A condition survey of the
building was completed recently which identified a requirement for around
£850,000 to be spent on maintenance to ensure the building can both operate
safely and is ‘fit for purpose’. This covers both essential and desirable
elements all of which are maintenance related. The council has already
committed funds in its capital programme for works to elements such as
external steel work repairs (£50,000) which is now underway, fire alarm
(£30,000) and fire exit doors (£40,000) to enable the premises to operate
safely.

28.

While future commercial investment and partnering could result in savings to
the council’s revenue budget and future calls on the capital programme this
cannot be quantified at this stage of the process and will be dependent on the
nature of the partnership or relationship entered into by the council and the
third party.

29.

It is clearly desirable to work towards a solution that delivers a sustainable
future for Dinosaur Isle while providing financial savings to the council given
the continuing budget challenges.

30.

Depending on the progress of discussions with interested parties through the
Light Touch Regime there may be potential profit share or revenue share
arrangements that could be agreed.
5

 CARBON EMISSIONS
31.

Since 2009 Dinosaur Isle have worked hard in reducing their carbon
emissions through both behavioural change and various energy efficiency
measures, the most significant of which was reverting to localised heating of
essential areas rather than whole site. The result of all these measures
resulted in a halving of energy consumption down to approximately
76,000kWh (27tCO2e).

32.

Disposal of this site would result in this energy being saved from the council’s
carbon footprint.

33.

Refurbishment of the site and reverting back to whole site heating could see
energy consumption reverting back to original levels with the corresponding
increase to the council’s carbon footprint

LEGAL IMPLICATIONS
34.

The council is required to achieve best consideration if any of the future
proposals include the disposal of land. In addition the council is also required
to undertake a lawful procurement process which is outlined in paragraph 19.
Given the facility employs council staff there could be issues relating to TUPE
or redundancy but whether such matters will be relevant cannot be known at
this stage.

EQUALITY AND DIVERSITY
35.

The council, as a public body, is required to meets its statutory obligations as
set out under the Equalities Act 2010 to have due regard to eliminate unlawful
discrimination, promote equal opportunities between people from different
groups and foster good relations between people from different backgrounds.
The protected characteristics are: age, disability, gender reassignment,
marriage and civil partnership, pregnancy and maternity, race, religion or
belief, sex and sexual orientation. Given the early stage of the process it
cannot be determined whether there will be equality and diversity issues as a
result of any proposal but an Equality Impact Assessment will need to be
carried out when a detailed proposal is considered for recommendation.

PROPERTY IMPLICATIONS
36.

Dinosaur Isle is owned freehold by the council and was built with funding from
the Millennium Fund in 2000. An existing charge against the premises was
removed in 2017 following negotiations between the council and the Big
Lottery Fund which is the legacy organisation responsible for Millennium Fund
schemes across the UK. The removal of this covenant means the building is
unfettered by any restrictions or financial penalties on disposal.

37.

A condition survey carried out in 2017 identified around £850,000 of
maintenance works and there is £120,000 in the current capital programme
6

 for essential elements associated with the steel structure and fire
requirements.
38.

The value of the site is limited given its location which is vulnerable to both
coastal and fluvial flooding and any partnership which would bring commercial
investment to the building. This would reduce the council exposure to future
costs as well as enable its limited capital programme to be focused on other
premises and priorities.

OPTIONS
39.

The council has a range of options in considering the future of Dinosaur Isle
which are best summarised as follows:
1.

Maintain the museum as an in house facility (no change).

2.

Dispose of the site to an operator and control activity through the land
transaction.

3.

To progress with a procurement under the Light Touch Regime for
Dinosaur Isle as set out in Appendix 1 with a final document
summarising the outcome and any resulting agreement with a partner(s)
to be agreed by the Director of Regeneration and section 151 officer in
consultation with the Cabinet Member for Resources and the Cabinet
Member for Environment and Heritage.

4.

Close the building and dispose of the site on the open market.

5.

Consider the proposal from the Friends of Dinosaur Isle group to
establish a trust and “not for profit” company to seek public funds and
partnership investment.

Each of these options is considered in detail in Appendix 1.
RISK MANAGEMENT
40.

The council could continue to provide Dinosaur Isle as an in house service but
there is a high risk that the future maintenance needs of the building (as
highlighted in the condition survey) and the ongoing financial challenges of
the authority could mean it is unable to provide the funding required to
undertake. This would mean the building becoming unfit and unsafe for
service delivery and could ultimately lead to its closure. While the risk could
be mitigated by seeking to fund capital works from grant funds and other
financial sources outside the council these are very limited. In addition, the
council’s general budget pressures will inevitably lead to a focus on the
delivery of the council’s statutory functions and future revenue savings may
be sought from a range on non-statutory services including Dinosaur Isle.

41.

The council could minimise the risk of an open market sale by disposing of the
building on a leasehold basis, conditional on a range of issues to restrict and
or control its future use. There is a high risk that in trying to control matters
via a lease it restricts commercial interest in investing in the property which
could mean that no suitable operator comes forward. In addition, trying to
7

 ensure control via a legal document will lead to inflexibility and inability to deal
with changing circumstances or future unknowns. There would also be a high
risk that accredited museum status would be lost unless the lease was
purchased by a local authority, museum or similar.
42.

Closure of the building would be a last resort as it would render the future of
the site uncertain and undermine the case for the regeneration of the Bay. It
would also lead to wider reputation damage due to the loss of the facility given
its international reputation. While there is the possibility that the building
would be purchased by a group or organisation wishing to provide a museum
type use this would be in competition with other commercial interests with a
high risk that other interests would provide a more commercially
advantageous bid. While an alternative use could enhance the regeneration
of the area this is a high risk option given the council would be bound by
ensuring best consideration and as an ‘open market’ sale would be duty
bound to consider this as best price.

43.

A procurement process via the Light Touch Regime would provide a logical
next step following the soft market testing already undertaken by the council.
The work to date has helped shape the next stages of the procurement
process and will allow continued engagement with both potential investors
and local stakeholders to enable the best outcomes. There is a risk that the
Light Touch Regime process may raise conflicting issues but the process also
ensures that these can be reflected on in an open way and where difficult
decisions or choices have to be made there is clear audit trail as to how they
are resolved.

44.

The council could consider the trust option proposed by the Friends of
Dinosaur Isle group but a trust has yet to be established and its lack of a track
record in owning operating commercially focused facilities along with the
timing associated in developing a business case and applying for e.g.
Heritage Lottery funding loads this option with greater risk. It is possible that
a more robust partnership of organisations may come forward to coparticipate in the Light Touch Regime process.

EVALUATION
45.

Dinosaur Isle is an important facility both in terms of its place at the centre of
the Island as an international centre of palaeontology and also as part of the
wider regeneration of the Bay. It also has a range of stakeholders keen to see
its long term future secured as an accredited museum.

46.

As such it is critical that future of the facility is secured and given the financial
challenges of the council that third party investment is sought. The soft
market testing and stakeholder engagement meetings have indicated that
there are investors and investment models that need to be explored and to
achieve this, a procurement under the Light Touch Regime provides the best
and most flexible approach to take this forward. This process will also allow
the council to continue to engage with both potential investors and local
stakeholders to enable the best possible outcome. While there is a risk that
the process may not conclude with all required outcomes being delivered, it
8

 provides the most transparent and equitable basis to ensure that all relevant
matters are taken into account and is considered the best route to achieving
the long term sustainability of the Dinosaur Isle.

RECOMMENDATION
47.

Option 3 - That with regard to the requirement of maintaining museum
accreditation that the council progress with a procurement under the Light
Touch Regime for Dinosaur Isle as set out in Appendix 1 with a final document
summarising the outcome and any resulting agreement with a partner(s) to be
agreed by the Director of Regeneration and section 151 officer in consultation
with the Cabinet Member for Resources and the Cabinet Member for Environment
and Heritage.

APPENDICES ATTACHED
48.

Appendix A - Procurement Options Paper.

Contact Point:

Ashley Curzon, Head of Economic Development
 821000 e-mail ashley.curzon@iow.gov.uk

CHRIS ASHMAN
Director of Regeneration

STUART HUTCHINSON
Cabinet Member for Resources
JOHN HOBART
Cabinet Member for Environment and Heritage

Decision
Signed
Date

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