Agenda item

            The Director of Development submitted for the Committee’s consideration the following report:

 

“1.0     Purpose of Report/Summary of Main Issues

 

1.1       This report provides an update on the performance of the Belfast Bikes public hire scheme with regard to usage to and financial performance. It considers options for a strategic review in the future to maximise the usage and minimise the subvention of the Belfast Bikes Public Hire Scheme while ensuring equity of access for all Belfast residents.

 

2.0       Recommendations

 

2.1       The Committee is asked to:

 

·        consider a strategic review of the Belfast Bikes Public Hire Scheme, examining the current operating model and how usage can be increased and commercial revenues enhanced. Members will receive a future report detailing the terms of reference for a strategic review and any associated costs; and

·        note the performance to date of the Belfast Bikes public hire scheme.

 

3.0       Main Report

 

3.1       Background

 

            The Belfast Bikes scheme launched in 2015. The business case used to inform the Council’s projections was commissioned by the Strategic Investment Board and published in 2012. At the time, bike share schemes were in their infancy in the UK and Ireland, and information on the transparency of costs and income was not widely available. In recent years, bike share schemes have expanded rapidly in the UK and in Ireland and experience shows that they require some level of public sector investment. Funding models differ between cities however; the level of investment in the Belfast scheme is similar or lower than other comparator cities. For example, Dublin City Council contributes approximately €376,000 per annum towards the operating cost of the Dublin Bikes Scheme.

 

3.2       Historic Financial Performance

 

Financial Year	Income		Expenditure		Subsidy
	Plan	Actual	Plan	Actual	Plan	Actual
15/16		£212,987		£392,170		£179,183
16/17	£336,340	£251,064	£422,780	£466,474	£56,440	£215,410
17/18	£247,000	£251,667	£456,016	£493,031	£209,016	£241,734

 

 

3.3                   18/19 Financial Performance Forecast

 

Financial Year	Income		Expenditure		Subsidy
	Plan	Actual	Plan	Actual	Plan	Actual
18/19	£305,313	£167,186*	£469,321		£163,918	£302,135*

 

            *forcasted

 

3.4       The forecasts articulated in the table above are predicated on the following assumptions. Expenditure is in line with budget at year-end.

 

3.5       YTD Financial Performance

            18/19 YTD – Revenue £87,342.63

            17/18 YTD – Revenue £79,120.94

 

            Financial Performance Issues

 

3.5       The forecasted financial performance is primarily due to two factors, namely:

 

1.     a delay in securing the sponsorship of the Belfast bikes; and

2.     a forecasted failure of the bikes to achieve their rental revenue plan.

 

            Sponsorship

 

3.6       Sponsorship of the Belfast Bikes ended in April 2018. A procurement exercise began Mid-April 2018 with a closing date of May 8th 2018. An award was made in August 2018 but, due to ongoing contract negotiations, the contract was signed in October 2018. The 18/19 financial plan assumed the ongoing sponsorship at a value of £110,000 per year, £9,166 per month. Therefore, the delay in sponsorship between April and September inclusive as resulted in a financial loss of £55,000.

 

3.7       It was agreed by the Committee in September 2017 to introduce new membership and usage charges from 1st April 2018. The annual subscription fee was increased from £20 to £25, the casual subscription was increased from £5 to £6 and a new ‘pay as you go’ option introduced with usage charges of £1 for 30 minutes usage was introduced. The changes have resulted in a drop in income detailed later in the report. In conjunction with the price change, the revenue plan for the Bikes assumed an increase in rental revenue from £114,845 to £194,668, a 69% increase in revenue. It was thought at that time that a combination of increased usage and price would generate the planned increase in revenue.

 

            The table below details historic year on year growth/decline in rental revenues.

 

	15/16	16/17	17/18	18/19
Rental Income	£115,000	£134,000	£114,429	£118,436
Yr on Yr		116.52%	85.39%	103.50%

 

 

3.8       The increase in planned rental revenue was predicated on an increase in users of 35% linked to the aforementioned increase in rental rates. Members should note the relatively flat growth in the usage of the Belfast Bikes scheme.

 

            Operational issues

 

            Vandalism

 

3.9       Vandalism was an ongoing problem in Year 3 and did affect bike numbers on the street during Year 3 in particular in the last quarter. Extensive work has been ongoing with local communities, elected members, schools and the PSNI to reduce the incidents. There has been a reduction in the last quarter of Year 3 and the first 4 months of Year 4. 

 

·        Year 1 (27th April 2015 to 31st March 2016) - £1,800

·        Year 2 (1st April 2016 to 31st March 2017) - £19,000

·        Year 3 (1st April 2017 to 31st March 2018) -£22,700

·        Year 4 (1st April 2018 to present) - £4,425.00 (This is down for the same period last year of £6,440)

 

 

3.10     Anti-vandalism initiatives include:

 

·        Increased engagement with the PSNI

·        PSNI stickers on the terminals

·        Support for the operating team from Council community safety staff

·        Increase awareness of customers and citizens in general (crime prevention – phone number to call)

·        Continuous work with the operator to make the system more vandal proof

·        increased involvement of community organisations

·        Schools programme 

 

3.11     NSL (the operator), has arranged, in conjunction with the youth justice agency, to provide training and work experience days for several young persons following youth conferences 

 

            Recent community Engagement Event are as follows:

 

3.12

Date	Event
June	Presentation to school – Corpus Christ
June	School St Joseph’s  - stall and competition (around 50 kids took part)
June	Presence at community event Roden Street Community Centre
July	Presence at Lower Shankill Community Regeneration event
Spring	Meeting with Ballymac Community group
May	Stall at Girdwood Open Day

 

            Proposals

 

3.13     Strategic Review – a strategic review of the bike scheme is required, specifically considering, reviewing the performance of the location and operation of Bike Docking stations, with a view to maximising revenue opportunities while ensuring equity of access.

 

            Financial and Resource Implications

 

3.14     A further report will be provided to Committee detailing any additional cost associated with the proposed strategic review.

 

            Equality or Good Relations and Rural Needs Implications

 

3.15     None.”

 

 

            The Director of Development provided an overview of the scheme’s performance to date and pointed to the increase in income and usage on the previous year.

 

            The Committee then raised a number of issues, particularly around the small number of docking stations outside of the City centre and ongoing vandalism. 

 

            In response, the Director of Development pointed out that the scheme had applied initially to the City centre to facilitate movement between transport hubs and that a subsequent roll out to several strategic sites beyond there had been due primarily to the acquisition of funding from external sources and the re-siting of underperforming stations.

The Chief Executive added that, should the Committee be minded to extend the scheme to outlying areas, there would be subvention costs associated with the purchase and operation of bikes and those would need to be reflected within the Council’s financial forecasts.

 

            The Director of Development outlined the measures which had been put in place to prevent vandalism and referred to the fact that the costs resulting from vandalism had fallen significantly from the previous year.

 

            After discussion, the Committee adopted the recommendations and agreed that the report to be submitted in advance of the review should include a map of all docking stations and usage figures on a station by station basis.