Issue - meetings

To determine the future delivery model for the Council’s leisure service following the conclusion of the leisure options appraisal.

Note:  Councillor Philip Knowles left the Council Chamber for the duration of this item.

Purpose of report

To determine the future delivery model for the Council’s leisure service following the conclusion of the leisure options appraisal.

Decision

That Cabinet:

1.    Approves the Council entering into a new leisure delivery contract with LeisureSK Ltd. for a maximum of ten years from 1 April 2025.

2.    Terminates the current contract with LeisureSK Ltd. by giving the required six months’ notice effective from 30 September 2024.

3.    Approves a new operating model for the delivery of the leisure services, based on an agency model with LeisureSK Ltd. acting as an agent for the Council in respect of the leisure services only.

4.    Requests that appropriate governance arrangements are established to oversee the future contract arrangement between the Council and LeisureSK Ltd in order to provide the Council with a suitable level of control and assurance.

5.    Explores the opportunity to expedite the transition to the new arrangement to ensure best value for money.

Alternative options considered and rejected

This report provided information on the findings of the options appraisal which had been undertaken to determine the future delivery model of the Council’s leisure service.

Reasons for decision

The leisure options appraisal had identified an option to enter an agency arrangement with LeisureSK Ltd. This option allowed the Council to benefit from the most tax efficient arrangement available and provided a significant level of savings on an ongoing financial basis.

A contract duration of ten years allowed LeisureSK Ltd to plan its activity and financial projections over a longer period of time. To protect the Council’s interests an early termination of a longer-term contract would still be possible with the provision of six months’ notice.

An earlier termination of the current contract arrangements and the move to an agency arrangement enabled the Council to maximise savings in financial year 2025/26 rather than waiting until the expiry of the current contract on 31 December 2025.

In order to provide an appropriate level of assurance and control over the operation and financial performance of LeisureSK Ltd, it was agreed to review and enhance the governance arrangements

Resolution number 5 was added at the request of the Culture and Leisure Overview and Scrutiny Committee following debate at the meeting held on 3 September 2024.

The Council had received tax advice from HMRC, who had confirmed the proposed agency contract would be legally compliant. The agency model was being explored by other groups nationally.

The options contained within the report had been considered by two separate meetings of the Culture and Leisure Overview and Scrutiny Committee, and ultimately endorsed prior to discussion at Cabinet.

Cabinet thanked officers involved in the preparation of the report, particularly the Assistant Director: Leisure, Culture and Place.