See report (Agenda Item 5. Pages 15-44) to Cabinet on 26 January 2016. The recommendation below may be subject to amendment, which will be reported orally at the Council meeting.
DRAFT RECOMMENDATIONS
(1) That the management of the Leisure Centres and Sports Development Service be outsourced.
(2) Subject to approval of recommendation (1) above, that the Head of Commercial Services be authorised, following consultation with the Cabinet Member for Commercial Services and Head of Finance & Governance Services, to conclude capital negotiations and agree the principle of funding the capital works as indicated in 4.2, 4.3 and 7.1-7.5 of the Part 2 report.
Minutes:
Mrs Keegan, (Cabinet Member for Commercial Services), seconded by Mrs Lintill, moved the recommendations of the Cabinet.
She reminded the Council of previous consideration of this matter, leading up to its decision in September 2014 that a procurement exercise be undertaken to test the market for future management of leisure services. The strategic objectives to be achieved were set out in paragraph 4.8 of the Cabinet report.
The procurement exercise was described in paragraphs 4.9 to 4.16 of the report, and had included a competitive dialogue with two short-listed contractors. Both were registered charities operating over a number of leisure services, which provided tax advantages and economies of scale. Currently, Chichester was the only District Council in West Sussex that had not outsourced its leisure centres, and could now benefit from a mature marketplace.
The prices paid by users for core services would be protected under the contract. Regular meetings would take place to manage the relationship between the Council and the contractor and to monitor performance. The existing Task and Finish Group, which included a member of the Overview and Scrutiny Committee, would continue to meet quarterly in the first year of the contract. The Council’s staff would be fairly treated and would be employed by the contractor under TUPE regulations, and would have better career prospects. The Council would retain ownership of the leisure centre buildings.
In the current economic climate there were few other opportunities for the Council to save money and keep services at the current level, and the savings on provision of leisure services would help the Council to protect other services. The Cabinet, therefore, recommended the Council to outsource the management of the Leisure Centres and Sports Development Service.
The contractor had proposals for capital works at the Leisure Centres, and there would be a reduction in the management fee if the Council provided the capital. She asked the Council to delegate the decision on whether to pursue this option.
At this point, the Council RESOLVED that the public, including the press, be excluded from the meeting for the following item on the grounds that it is likely that there would be a disclosure to the public of ‘exempt information’ of the description specified in Paragraph 3 (information relating to the financial or business affairs of any particular person (including the authority holding that information)) of Part I of Schedule 12A to the Local Government Act 1972 and because, in all the circumstances of the case, the public interest in maintaining the exemption of that information outweighs the public interest in disclosing the information.
Mrs Hotchkiss (Head of Commercial Services) then explained the detailed evaluation process applied to the short-listed contractors, and details of the respective bids. She described some of the capital works and explained how current users would be consulted. The Council discussed a proposal to retain in the management contract a right to sell the assets unencumbered, but Mrs Keegan advised that the Council wished to retain the buildings and there were other protections in the agreement enabling termination of the contract.
The meeting was then re-opened to the press and public.
RESOLVED
(1) That the management of the Leisure Centres and Sports Development Service be outsourced.
(2) That the Head of Commercial Services be authorised, following consultation with the Cabinet Member for Commercial Services and Head of Finance & Governance Services, to conclude capital negotiations and agree the principle of funding the capital works as indicated in 4.2, 4.3 and 7.1-7.5 of the Part 2 report.
(3) That the Task and Finish Group continue in a monitoring role, to meet initially at least quarterly. This will be reviewed 12 months after the contract has commenced and the Overview and Scrutiny Committee may also choose to review performance of the contract after a period of operation and at intervals thereafter.