Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 29th February, 2012
Report of the Cabinet Member for Tourism and Leisure
Leisure Centre Partnership Project
Purpose of the Report
1. The purpose of this report is to seek approval to appoint Parkwood Leisure Ltd as the Council's preferred Leisure Centre Partner to deliver its Leisure Centre service.
1. That Parkwood Leisure Ltd be appointed as the Council's preferred Leisure Centre Partner.
2. That the Director of Environmental and Economic Regeneration in consultation with the Director of Finance, ICT and Property and the Director of Legal, Public Protection and Housing, in consultation with their Cabinet Members and the Leader of the Council, be authorised to enter into final negotiations with Parkwood Leisure Ltd as the Council's preferred partner organisation to enter into a 10 year contract, with the option for a further 5 years extension to operate the Councils Leisure Centres.
3. That subject to the necessary contract formalities being completed, the contract commences at the earliest opportunity
Reasons for the Recommendations
1. That following a comprehensive procurement methodology undertaken by the Council, Parkwood Leisure Ltd is the highest scoring bidder.
2. To allow the process of appointing a Leisure Centre partner to be completed as quickly as possible.
3. To ensure that any period of uncertainty for staff be kept to a minimum.
2. Members will be aware that under the Final Proposals for the Revenue Budget 2011/12 (Cabinet 21st February 2011) Minute No C1221 and approved by Full Council on 28th February 2011, a total saving within the Leisure service Base Budget of at least £1m was agreed (£500k for 2011/12 and £500k for 2012/13). The Council's Leisure service had become financially unsustainable with significant overspends for a number of years. Furthermore investment was required on the Leisure Centres themselves. Reports had been made to Members in 2009 and 2010 outlining options available. In order to find this level of savings major changes to Leisure provision would be necessary and if the service were to remain delivered by the Council, only the closure of facilities would have met these levels of savings inevitably involving redundancies. Before pursuing that option it was agreed to pursue the option of seeking a partner organisation to examine whether these levels of savings could be found without the closure of facilities.
3. Options were reported to Members at the Cabinet of 24th March 2010 when it was resolved:
1. That the Director of Environmental and Economic Regeneration in consultation with the Directors of Finance, ICT and Property and Legal, Public Protection and Housing Services and the relevant Cabinet Members be authorised to procure a partner organisation to manage the Councils leisure portfolio and that a further report be submitted to Cabinet prior to the appointment of any external partner.
2. That a specialist leisure consultant be appointed in consultation with the Director of Finance, ICT and Property to assist in the process and provide advice on the contract terms and conditions, specification, contract length, contract package, etc.
3. That a cross party Advisory Group of members be established comprised as follows:
Chairman; Cabinet Member for Leisure and Tourism, Councillors J.F. Fraser, G. John, C. J. Williams, M. R. Wilson and Ms M. Wright.
4. That the report be referred to Scrutiny Committee (Economy and Environment) for consideration.
4. The approach of seeking partner organisations to run Council Leisure Centres has been adopted widely in England and Bridgend Council are following a similar approach at the moment.
5. Strategic Leisure was subsequently appointed as the Council's consultant and the Working Group was established. Councillor A Hampton subsequently replaced Councillor M Wright on the Working Group.
Relevant Issues and Options
6. Tenders for the proposed Leisure Management contract were received in October 2011 and have been subject to a comprehensive evaluation process. Four organisations (Fylde Coast YMCA; Parkwood Leisure Ltd ; Serco Leisure Operating Ltd; and Sports and Leisure Management Ltd (SLM) were shortlisted following an extensive pre-qualification questionnaire, and all four organisations submitted detailed tender bids.
7. As part of the evaluation process, the four organisations were provided with an opportunity to clarify certain aspects of their respective bids. At this point, Fylde Coast YMCA elected to withdraw from the process.
8. The tenders were evaluated on the basis of 50% price and 50% quality and were evaluated against pre-determined criteria. Points were attributed to each of the elements and an aggregate score for price and quality was produced for each of the submitted tenders.
9. The Council advised bidders that their base tender should assume a capital investment by the Council of £2m in respect of essential works to the Leisure Centres. They were also advised that they could submit a variant tender. The variant tender was to be based on the assumption that the Council would provide an additional investment of up to £1m for improvements to the Centres, if it could generate further savings in the contract. This sum would only be provided if it could be demonstrated that the additional savings would cover the cost of the debt, if the sum was borrowed. Both the base and variant tenders were evaluated using the above process and the variant bids is the favoured bid and will utilise the full £1m investment.
10. As a result of the recent job evaluation agreement, the remaining three organisations were then invited to interview and to submit a revised bid, based on the new information relating to staff costs as a result of the job evaluation agreement.
11. Based on the revised bids received and utilising the original tender evaluation report the organisations have been ranked as follows:
1. Parkwood Leisure Ltd
2. Serco Leisure Operating Ltd
Resource Implications (Financial and Employment and Climate Change, if appropriate)
12. The saving afforded by the Parkwood Leisure Ltd tender meets the Council's target savings. However Cabinet are reminded that the Council will still be responsible for external maintenance of the facilities and major items of plant. These may increase once the premises are occupied by an external leisure provider. A major advantage is that if this bid is accepted all Centres will remain open and most, significantly upgraded and improved.
13. A report on the Final Capital Programme Proposals 2012/13 is elsewhere on this agenda and requests approval for the full £3m to be included in the Capital Programme.
14. It is intended that all Leisure Centre staff affected by the contract will be subject of a TUPE transfer and will have their new terms and conditions, agreed as part of the job evaluation process protected. Parkwood Leisure Ltd has also confirmed that it recognises local trade unions and looks forward to working with them in the future. Parkwood Leisure Ltd will be offering a broadly comparable GAD Certificated Pension Scheme for existing employees.
Legal Implications (to Include Human Rights Implications)
15. Independent legal advice has been obtained by the Council throughout the procurement process. The actual contract, which has already been drafted as part of the invitation to tender documentation, will require final negotiation prior to it being entered into.
Crime and Disorder Implications
16. Positive sport and physical activities are now proven to assist in the reduction of crime and disorder issues.
Equal Opportunities Implications (to include Welsh Language issues)
17. The Councils Equal Opportunities policies were included in the contract specification and the appointed contractor will be expected to deliver a service which complies with the Council's policies.
18. Leisure Centres make a very significant contribution to the Council's objective of providing affordable services in improving the general health and quality of life for residents and visitors. Again the importance of the service and the objectives that it meets in terms of the Council's overall aims and ambitions have been stressed throughout the process and the successful partner organisation has stated that this follows their own philosophy.
Policy Framework and Budget
19. This is a matter for Executive decision by Cabinet.
Consultation (including Ward Member Consultation)
20. As the Council's Leisure Centres provide services to all areas of the Vale of Glamorgan no specific Ward consultation has taken place. However, members of the All Party Leisure Centres Advisory Group at its meeting on 21st February 2012 made the following joint comment:
" The Group confirmed that they were satisfied with the methodology that had been adopted in procuring a preferred partner and supported the recommendation to Cabinet to appoint Parkwood Leisure Ltd. The Group was particularly pleased that all Leisure Centres will remain open under the proposals and that the target £1m savings for the service has been achieved. As the contract will be for at least 10 years it will also give security to customers and to the staff transferred. The Group also confirmed that it will monitor the implementation of the contract with interest. They also recorded their thanks to Kevin Franklin from Strategic Leisure for the invaluable advice given during the course of the project. The Group also endorsed the Cross Party Advisory Group approach adopted for this major project and recommended that a similar approach be adopted in the future."
21. Union representatives were briefed on this report at a meeting on 21st February 2012. Unison's comment was:-
"That they would wish to see all existing terms and conditions transferred unamended."
This will be considered during the negotiation period with relevant legal advice being obtained.
Relevant Scrutiny Committee
22. Corporate Resources.
Dave Knevett, Operational Manager Leisure and Tourism, Tel 01446 704817
Director of Finance, ICT and Property
Director of Legal, Public Protection and Housing Services
Operational Manager Strategy and Support
Operational Manager Human Resources
Head of Human Resources
Operational Manager Property
Rob Quick - Director of Environmental and Economic Regeneration