Agenda item

Members considered an update on the progress made with the actions requested by Cabinet in relation to LeisureSK Ltd, including an update on the leisure management options appraisal which was being undertaken.

At their meeting held on 9 January 2024 the members present moved a ‘motion of no confidence’ in LeisureSK Ltd. As a result, Cabinet at their meeting in January 2024 set a number of tasks to be undertaken to provide assurance on the performance of LeisureSK Ltd, including bringing forward the timescale on alternative management options.

A new arrangement for the provision of leisure would need to be in place for 1 January 2026.

Speaking as a LeisureSK Board Member, Philip Knowles made a statement about the current situation with LeisureSK Ltd, highlighting the following:

·       The issues with LeisureSK Ltd. were fundamental and deep rooted and involved maintaining three old leisure centres.

·       Were the objectives, as guarantors of the buildings, to make a profit from the three leisure centres, or to provide high quality facilities?

·       Board Members needed to create a set of parameters for the company to outline what was expected of them. Until recently, the Board membership consisted of two individuals, which was the minimum number of people required. This situation had been remedied by the appointment of three further Directors in April 2024. The appointment of Paul Sutton would ensure that figures were returned to Members in a timely manner given his previous experience and day to day role as Interim Head of Finance.

·       At a recent Board meeting, there was a large staff contingent present.

·       There was confidence in the Chairman, as one of the pre-existing Board Members of LeisureSK Ltd. to lead the team. The Board and staff required support and patience to do their job.

During debate, further information was highlighted:

·       Earlier this year there had been a vote of no confidence in the Board of LeisureSK Ltd. – therefore it was appropriate for Cabinet to communicate with the Board at every available opportunity.

·       LeisureSK Ltd. had an existing 5 year business plan which would end in the next 18 months. The LeisureSK Board would agree the business plan which would also contain the strategic aims of the company. The current contract with LeisureSK Ltd. could not be extended any further, and South Kesteven District Council (SKDC) would have to enter into a new arrangement. Members and officers would be looking at all options for the future management of the leisure provision, whilst doing a cost which would include:

o   Bringing the provision in-house

o   Going out to the wider market

o   Retaining LeisureSK Ltd. in its current form

o   Retaining LeisureSK Ltd. in an adapted form

All options would be subjected to a cost benefit analysis.

·       LeisureSK was currently in a deficit position.

Note:   At this point in proceedings Board members and staff of Leisure SK Ltd. (Philip Knowles, Patsy Ellis, Paul Sutton, Debbie Roberts and Matt Chamberlain) left the Council Chamber having answered any questions from SKDC members.

·       Administration support provided by SKDC was in place for LeisureSK Ltd. – however if this was no longer required it could be withdrawn. It remained the case that SKDC and LeisureSK wanted to work together.

·       The Leader of the Council had written to the Board, predominantly over concerns with cashflow. A mitigation plan had been requested.

·       The Cabinet Member for Leisure and Culture attended LeisureSK Ltd. Board meetings as an observer.

Having previously been moved and seconded, and following a vote it was AGREED:

That the Culture and Leisure Overview and Scrutiny Committee:

1.    Notes the progress made on the actions agreed by Cabinet on 18 January 2024 and requests any further information that is required at this stage.

2.    Agrees to receive a further report providing detailed information on the results of the leisure management options appraisal at a future meeting.