Agenda Item No


The Vale of Glamorgan Council


Scrutiny Committee (Corporate Resources): 20th March 2012


Report of the Director of Environmental and Economic Regeneration


Leisure Centre Partnership Project


Purpose of the Report

1.             The purpose of this report is to respond to the issues raised in a "call in" from Councillor Mark Wilson and a separate 'call in' from Councillor Neil Moore regarding the Cabinet Reports titled "Leisure Centre Partnership Project", considered by Cabinet on 29th February 2012.


1.         THAT the Scrutiny Committee endorses the recommendations of the reports titled "Leisure Centre Partnership Project" approved by Cabinet on 29th February 2012.

Reason for the Recommendation

1.         To seek Scrutiny Committee's endorsement of the Cabinet decision.



2.             Reports were submitted to the Cabinet meeting of 29th February 2012 on the subject of the Leisure Centre Partnership Project with a recommendation that Parkwood Leisure be appointed as the Council's preferred leisure centre partner.  The Part I report is attached at Appendix A.

3.             A 'call in' was received from Councillor Mark Wilson and is attached at Appendix B.  A further 'call in' was also received from Councillor Neil Moore and is attached at Appendix C

Relevant Issues and Options

4.             Councillor Mark Wilson's 'call in' is addressed as follows:

5.             Councillor Mark Wilson states that the report does not mention any degree of consultation with the users of the leisure centres regarding the transfer.   RESPONSE: At the beginning of the process the information attached at Appendix D was displayed at all of the Council's leisure centres.  Very little response was received from customers in relation to this information.  The only concerns related to potential price increases to use facilities and the availability of space for existing clubs that use leisure facilities.  Both of these issues have been dealt with within the specification which allows the Council control over both core pricing and programming requirements that the Partner will be required to comply with.   In addition throughout the process a number of press releases have been issued and all press enquiries have been responded to. 

6.             Councillor Wilson states that consultation with the users could have an impact on the decision.   RESPONSE:  The aim of the partnership is to deliver a seamless transfer, as far as possible, from the customer perspective and  the programme is therefore initially protected within the specification.,

7.             Councillor Wilson states that there seems to be an over emphasis on cost rather than quality.  Could Officers explain in detail to Scrutiny why this was the case?  RESPONSE:  The evaluation criteria featured a fifty/fifty price versus quality ratio for evaluation and therefore quality was given an equal standing as price.  Given that one of the major drivers for this project was significant cost savings (Council previously approved target savings of £1million), the fifty/fifty basis would seem reasonable.  The evaluation criteria was also explained to the Member Working Group in advance of the contract documents being issued.  If leisure centres were to be retained under council operations, the £1m saving could not be achieved without centre closures.

8.             Councillor Wilson states that the contents of the contract are not in the public domain, surely there should be debate as to what should be in the final negotiations so that risks are reduced to the community.  RESPONSE:  Contract negotiations are by their nature legally and commercially sensitive and therefore cannot be in the public domain as to be so would prejudice the Councils position. The Council has employed experienced and respected leisure consultants to reduce any risks as far as possible.  The services of the consultants have also been extended to cover the final negotiations.  In addition the contract being used to secure the arrangement with the preferred bidder has been widely used by other local authorities throughout the United Kingdom and has itself been developed by a leading leisure specialist firm of solicitors.

9.             Councillor Wilson states that all parties in the Council are brought into these crucial negotiations.  RESPONSE:  All of the tenders received from the prospective partner organisations were extremely comprehensive and although there are some commercial issues which require final agreement, there are no significant negotiations required.  The Officer Working Group is already significant in number and any issues that do require negotiation will be dealt with as detailed in the Cabinet Report as it is generally felt there is a need to progress matters as quickly as possible to end issues such as staff uncertainty.  The All Party Working Group has also been kept informed of the process and will continue to be updated until completion is achieved.

10.        Councillor Wilson states that this should be dependant upon proper consultation with users of the leisure centres.  RESPONSE:  The tendering and evaluation process undertaken were extremely comprehensive and in accordance with existing procurement legislation and guidelines. Were the Council to look to seek any variation to these now as a result of user consultation it would expose the Council to the risk of a legal challenge being made by an unsuccessful bidder.   The contract documentation was subject to discussion with the cross-party Member Working Group prior to being issued.

11.        Councillor Neil Moore's 'call in' is addressed as follows.

12.        Councillor Moore states that in the press the cross-party working group had endorsed the process of the tendering exercise which he believes is not true and should be retracted.  RESPONSE:  At the last meeting of the member cross-party working group there was agreement on the recommendations contained within the report although it is noted that Councillor Wilson was not present.   Within both Part I and Part II Cabinet Reports the comments of those present at the meeting were included.  It is therefore arguable that there was 'cross' party support for the proposals although it is acknowledged that this could have implied 'all' party support.

13.        Councillor Moore states that it appears there was no real communication with users of the leisure centres.  RESPONSE:  This issue has been addressed earlier in this report.

14.        Councillor Moore states that there is little known about what will happen in the future in relation to any contracts we have with our current users.  I am also unaware of whether or not medical referrals that currently take place in our centres will continue.  Similarly after a suggestion from one of the Labour Councillors we now allow Service personnel free use of our centres, while on leave etc., but again nothing is known about whether this will continue.   RESPONSE:  The Welsh Government funded General Practitioner Referral Scheme has been very successful in the Vale of Glamorgan.  From the beginning of the contract discussions it has been an integral part of the specification, which all tenderers were aware of.  The General Practitioner Referral staff will continue to be Vale of Glamorgan Council employees but will have full access to the leisure centre facilities to deliver their programmes.  Given the importance of this service, and having taken advice from both Welsh Government and our Consultant it was agreed that the future of this service was best served on the 'client' side.  Military Service personnel's free use of leisure centres during periods of leave has also been included within the specification and will continue.  In addition all of the prospective partners were aware of our existing contracts with our current customers and this has formed an integral part of their tenders.  In compliance with the Data Protection Act full details of these contracts will only be passed to the successful partner on completion of a contract.

15.        Councillor Moore states that nothing is known about whether the current lessons that take place with instructors will continue.  I have been told that they will not be continuing and that the instructors, etc., will presumably not be part of the TUPE process.  Can we have some assurances or information about the future use of the centres, etc., all of which should have been made available to the users and Members of this Authority.  RESPONSE:  Instructors who are employees of the Council will transfer in line with TUPE regulations. A key element of all the tenders presented by the prospective partners was an increase in the number of exercise classes offered.

16.        Councillor Moore states he would like to challenge the basis of the acceptance of the tender on 'price' rather than 'quality' of the services provided.  It seems to me that quality was largely ignored and with it not necessarily having a high enough requirement compared to the price of the contract.  RESPONSE:  This issue has been addressed earlier in the report.

17.        Councillor Moore states that we are still having to use £3million of reserves and have responsibility for the fabric of the buildings, etc., so does that also mean the equipment, the swimming pools and their ancillary equipment (like filters, pumps, etc.).  How much will this cost?  RESPONSE:  Prior to the commencement of the procurement process condition surveys were completed on all of the leisure centres and estimated the work required to return the centres to an acceptable standard.  The sums identified in the Capital Programme reflect the amount of investment required and could have been spent prior to commencement of any contract.  However, due to possible remodelling requirements proposed within the tenders and the real possibility of not being able to afford to continue to operate all the leisure centre sites in the future, if the partnership project did not achieve significant revenue savings, it was felt that it was in the best interests to leave this work until the contract commenced.  There will also be ongoing maintenance and replacement issues associated with the leisure centres but these will occur regardless of who is managing the buildings.  It should also be noted that £1million of the £3million is being funded by the Council on the basis that this cost is covered by further savings in the contract price.

18.        Councillor Moore states that we are also taking the risk on energy prices if they increase above inflation.  Why has this been agreed?  RESPONSE: This was agreed in consultation with our Consultants prior to the issue of documentation, as the best way of obtaining a competitive tender.  After staffing, utility costs are the most expensive elements of operating a leisure centre and had this clause not been included, and given the volatility of energy prices, it is likely that much higher tenders would have been received as prospective partners try to predict energy costs over a ten year period. This clause is now common in leisure management contracts.

19.        Councillor Moore states that the report does not state the exact amount of savings until the contract negotiations are complete, so why are we agreeing anything now?  RESPONSE:  The information given to all the tenderers was correct at the time the documents were issued and all prospective partners submitted bids based on this information.  However, given the complexity of the contract it was always understood that a small amount of negotiation would be required, e.g. the implementation of Job Evaluation has now occurred which has required all of the tenderers to re-evaluate their bids.  It is not expected that significant differences will occur and the option remains to withdraw from negotiations if the price varies significantly. 

20.        Councillor Moore states that the report indicates that the Council will also retain client responsibilities.  What does this entail?  RESPONSE:  Clear definitions of client responsibilities are included in the specification and include the fabric of the building and major items of plant.  Again this is common for this type of contract.  In addition the Council (client) will also have a responsibility for monitoring the performance of the partner organisation, agreeing any variations requested by the partner and instructing the partner to carry out any changes the Council wishes to introduce during the length of the contract.

21.        Councillor Moore asks what does it mean when it is said that the Council will be responsible for any costs that arise from a specific change in the law relating to the services provided?  Can you give some examples and likely costs involved?  RESPONSE:  A specific change of law relates to an occurrence when existing legislation is amended and which directly affects the provision of the leisure services. The partner organisation will be responsible for all other general change in law costs caused by changes in existing legislation.  By way of an example, it is common in leisure management contracts for prospective partners to be able to gain NNDR relief on the buildings they will be managing.  However, should the law change in the future regarding such NNDR exemptions the additional costs would be the responsibility of the outsourcing organisation. 

22.        Councillor Moore states all in all it appears that this is simply an exercise to save money, but only revenue funding.  No evaluation exercise has been considered or undertaken into the capital implications other than the £3m and that has not been broken down at all. RESPONSE The capital implications of the leisure centres were ascertained via the conditions surveys recently undertaken.  The requirement for future capital works would remain the Council's responsibility irrespective of the partnership agreement.  The provision of the additional £1m funding is to be provided on an invest to save basis and will result in a reduction in the contract price

23.        Councillor Moore states it would appear that if we manage the centres as others do, we would not need to carry out this exercise at all.  We are paying for all the capital costs and only saving (potentially) on revenue funding.  RESPONSE:  It is estimated that more than 70% of authorities in England no longer directly manage their leisure facilities due to the cost savings that can be achieved.  In Wales many authorities are already committed to non direct management options or are investigating alternative methods of delivery.  The revenue savings obtained through the procurement process are significant and whilst the capital costs do remain with the Council, these would if the Council continued to operate these facilities themselves.  It should also be noted that as part of the preferred bidder's proposals they will be investing some of their own capital in new equipment for improved fitness facilities.  The aim of the procurement process has always been twofold, firstly in terms of cost savings but secondly and, equally importantly, in terms of service improvement. 

Resource Implications (Financial and Employment and Climate Change, if appropriate)

24.        Details of the resource implications were included in the Cabinet Reports 29th February 2012. 

Legal Implications (to Include Human Rights Implications)

25.        Details of the legal implications were included in the Cabinet Reports 29th February 2012.

Crime and Disorder Implications

26.        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)

27.        The Council's Equal Opportunities Policies were included in the contract specification and the appointed partner will be expected to deliver a service which complies with the Council's policies.

Corporate/Service Objectives

28.        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.  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 to the prospective partners.  All of the prospective partners have stated that this is key to their own philosophy.

Policy Framework and Budget

29.        This is a matter for Executive decision by Cabinet.

Consultation (including Ward Member Consultation)

30.        As the Council's leisure centres provide services to all areas of the Vale of Glamorgan no specific ward consultation has taken place.

Relevant Scrutiny Committee

31.        Corporate Resources.

Background Papers

Cabinet Reports: 29th February 2012.

Contact Officer

Dave Knevett, Operational Manager, Leisure and Tourism.  Telephone 01446 704817.

Officers Consulted

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. 

Responsible Officer:

Rob Quick, Director of Environmental and Economic Regeneration.