Agenda item

Formation of LeisureSK Limited

Report of the Deputy Leader of the Council


The Committee received a report from the Deputy Leader of the Council on the formation of LeisureSK Ltd. 


The Council’s current leisure facilities were operated under a leisure contract arrangement; that contract was due to end on 2 January 2021. A 15-month extension to the current contract was agreed in December 2019, by Cabinet. 


The Council had been assessing the impact of Covid-19 on the leisure service, both in terms of the agreed financial support package currently being provided to 1Life and also how Covid-19 had affected the Council’s plans for the future management of the leisure service. 


The assessment indicated that previous decisions made in relation to the management of leisure services had been impacted both in the short and long term. Covid-19 had caused instability in the leisure operator market, therefore making it difficult to secure any new management contract by April 2022. 


There was a recommendation to transfer the leisure facility to a wholly owned Council company, against the previously agreed contract extension. Despite the acknowledgment of increased costs for the Council, the advantages of this option included regaining full management and operational control which could therefore provide the opportunity to maximise income, control costs and improve performance. The Council could also consider bringing forward leisure improvement works, without having to deal with contract variation costs.  


The transfer of the leisure service to a wholly owned council company was approved by the Cabinet on 18 August 2020. A recommendation of Cabinet was that a report be presented to the Companies Committee, which set out the optimum company structure, business plan and expenses. The report had been scheduled for review by Companies Committee on, 21 October 2020.


Due to the short timescales involved, it was proposed that the company be set up with a single Director, Councillor Dobson, the Deputy Leader of the Council. This would enable the registration of the company. 


The Committee was given the opportunity to ask questions and discuss the proposals. Comments related to:


  • The impact of the transfer of staff employed by the current provider.


  • The preference of transferring to the service to a Council-owned company in favour of direct management by the Council


  • Providing reassurance to the Committee around the business plan for the company and budget allocation


  • Concern about the appointment of only one Director in the first instance, together with arrangements for appointing further directors following the establishment of the company


The Chairman advised that the recommendation on budget allocation was considerable and highlighted a potential risk in making that allocation with no business plan in place. Re-assurances were required at the next meeting of the Companies committee, which should be included within the upcoming report.


A non-committee member expressed their concerns regarding the credentials of the suggested Director appointments, suggesting an alternative such as an officer with experience of the leisure industry. 


The Leader advised that the appointment of a sole Director was for the present time, to establish the company.  Then further director appointments, along with external non-executive directors, could be made at a future meeting.


Members considered the recommendations in the report and a vote by exception was taken. 




1.          That the urgent nature of the report was noted.


2.          Approval of the request to establish LeisureSK Ltd as a wholly owned Council company, at the earliest opportunity, to facilitate to a transfer of the leisure service.


3.          That the Committee receive a further report on 21 October 2020, with full details on the proposed company structure and five-year business plan.


4.          To recommend to Council that the budget allocation, not exceeding £500,000 be approved the support the formation of LeisureSK Ltd.


5.          To recommend that Council delegates the approval of any necessary expenditure to the Strategic Director of Growth in consultation with the Section 151 Officer.

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