Agenda item

To present the audited accounts for 2021/2022 for LeisureSK Ltd and the company Business Plan for financial year 2023/24.

Members were informed that if they wanted to speak in connection with the exempt appendices then the meeting would have to go into closed session.

A Member requested that the Committee discussed the recommendation which dealt with the appointment of directors to LeisureSK Ltd and the reasons for the appointments first, this was agreed.

Members had received a report at the last meeting of the Committee on the financial and operating position of LeisureSK Ltd and a draft copy of the 2021/22 accounts.  Appended to the report before Members was the final audited accounts for LeisureSK Ltd for the period April 2021 to March 2022.  The report also sought the appointment of two Directors to the company and the approval of the Business Plan for 2023/24.

Matt Chamberlain was introduced to the Committee who was LeisureSK Ltd’s Contract Manager and the author of the Business Plan before the Committee.

The Chairman thanked those Officers who had worked on the Business Plan.

Discussion on the appointment of Directors followed with one Member referencing the sudden departure of the previous two Directors who were Cabinet Members (Leader and Deputy Leader) together with a third Cabinet Member who had resigned as a director the day before the last meeting of the Companies Committee, but whose resignation had not been relayed to the Committee. The Member wanted to know what skills and abilities the Members put forward had and what knowledge and business acumen they had in respect of the leisure sector.

(14:47 Karen Bradford, Director of LeisureSK Ltd arrived)

It was also noted that as one of the proposed Directors was the Chairman of Governance and Audit Committee that he should not be near any directorship of a Council wholly owned company.  The other proposed Director was currently the Chairman of the District Council and also the Chairman of an Overview and Scrutiny Committee (OSC) and therefore if LeisureSK Ltd was discussed at a meeting of the OSC then she would have to declare an interest and leave the room.  He asked why these two Members had been put forward.

As Members had expressed concern about being notified when a director resigned from one of the Council’s wholly owned companies, the Chairman proposed that an email be sent to all Members making them aware of any director resignation. This proposal was seconded and the Vice-Chairman stated that it should be done immediately a resignation was received.   Other Members agreed with the proposal and on being put to the vote it was AGREED.

Decision

That on the receipt of a resignation by a Director of a Council owned Company, all Members are to be notified by email of the resignation with immediate effect.

The Committee were notified that the Companies Committee appointed the Directors.  With regard to the two nominees, the Terms of Reference for the Governance and Audit Committee did not include oversight of the Council’s wholly owned companies, that was the remit of the Companies Committee.  If any Member felt that they had a conflict between Council responsibilities and being a Director of a Company, they should refer to the Members Code of Conduct and make any necessary declaration and take into consideration the content of the Articles of Association of any Company they were a director of.  It would be for the individual Member to decide and act upon any interest they felt they had and leave the meeting during consideration of that item.

Further discussion on why the two Members were put forward was raised.  One of the Directors of LeisureSK Ltd was unclear about the reference to the recent Board meeting of LeisureSK Ltd contained within the report as it was incorrect, it was for the Companies Committee to appoint the directors.

More discussion followed with two alternative nominees for directors put forward, Councillor Kaffy Rice-Oxley and Councillor Virginia Moran. 

Concern was expressed by Members that there was no background information as to why the two Members named within the report had been nominated, there was nothing for Members to take into consideration such as qualities and business skills to justify the nomination.

A question was asked about directorships, if a Member or an Officer was no longer at the Council, would they still be classed as a director of a company, it was confirmed that they would be requested to resign.

One Member asked if the minutes from the LeisureSK Ltd Board meetings could be circulated.  It was noted that the notes taken were in the form of actions and were not in the public domain.

It was proposed that the appointment of directors for LeisureSK Ltd be deferred to the next meeting of the Committee.  The proposal was seconded and being put to the vote AGREED.

Decision

That the appointment of directors for LeisureSK Ltd be deferred to the next meeting of the Companies Committee.

The Committee then discussed the business plan for LeisureSK Ltd for 2023/24.

Reference was made to page 30 of the agenda pack and the Balance Sheet as at 31 March 2022 and the line stating that a copy of the income and expenditure account within the financial statements had not been included in accordance with Section 444 of the Companies Act 2006.  The Member wanted to know why the information had not been included.  It was stated that the auditors had advised not to include the information as it contained commercially sensitive material. 

A further question was asked about the impact on LeisureSK Ltd and the Business Plan following the permanent closure of Deepings Leisure Centre.  It was stated that the impact had been minimal as the building had closed earlier and there were no redundancy costs at the present time. Reference was made to the previous Business Plan which had the delivery of target objectives over a five year period with a proposed outturn and profitability of the company.  The Business Plan before Members was based on the operation of three leisure centres.

Members attention was drawn to Appendix B of the agenda pack which contained exempt information and detailed the budget monitoring summary for LeisureSK Ltd. The seven A3 documents gave a breakdown of the three leisure centres at Bourne, Grantham and Stamford. 

The Business Plan before Members was for one year (2023/24) as the financial settlement had only been received for one year.  It was difficult to extend the Business Plan until assurance on future funding was known, although lobbying was still taking place to central government in respect of energy and utility prices.

Further discussion on the content of the Business Plan followed with reference being made to the profitability, increase of numbers, weaknesses shown in the SWOT analysis and maintenance/structural issues especially in relation to the Bourne Leisure Centre and its ownership.

Operational reporting was carried out and reported to the relevant Overview and Scrutiny Committee every six months and this information was available through Modern.gov to all Members.  The next reporting to Culture and Visitor Economy Overview and Scrutiny Committee would be happening February 2023.

A Member, not on the Committee, made reference to the SWOT analysis contained within the Business Plan and felt that it did not give a true reflection of the number of aquatic clubs within the south of the district.

More discussion on the LeisureSK brand followed and it was felt that it was less well known in certain areas of the district.  It was clarified that the decision made to close the Deepings Leisure Centre was a decision of the South Kesteven District Council and not LeisureSK Ltd who operated the leisure centres on behalf of the Council. 

The Chairman asked that the Committee noted the audited accounts for LeisureSK Ltd for 2021/22 and proposed that the Business Plan for LeisureSK Ltd for the period April 2023 to March 2024 be approved.  The proposal was seconded and on being put to the vote AGREED.

Decision

That the Companies Committee approves the Business Plan for LeisureSK Ltd for the period April 2023 to March 2024.

Councillor Ashley Baxter asked for his vote against the decision to be noted.