Agenda Item No. 4
The Vale of Glamorgan Council
Scrutiny Committee [Economy and Environment]: 5th November 2013
Report of the Director of Development Services
Leisure Management Contract
Purpose of the Report
1. The purpose of this report is to update the committee on the performance of the Leisure Management Contract following a Request for Consideration from Councillor Mrs. P. Drake.
1. That Committee notes the improvements carried out in the leisure centres during the first year of the leisure contract.
2. That Committee notes the first year report and performance data produced by Parkwood Community Leisure.
3. That this Committee receives an annual report on the performance of the Leisure Management Contract.
Reasons for the Recommendations
1. To note the significant physical improvements made to the leisure centres over the past year.
2. To note the good performance of the contractor in the first year of operation.
3. To enable the Committee to be regularly updated on the performance of the Leisure Management Contract.
2. The Council's Leisure Management Contract with Parkwood Community Leisure commenced on 1st August 2012. The award of the contract followed an extensive procurement process and set out to significantly reduce the revenue cost of the Council's leisure centres' operation.
3. The contract provides the potential for the Vale of Glamorgan Council to become the only council in Wales that does not require a revenue subsidy to operate its portfolio of leisure centres over a ten year period from August 2012.
4. As part of the contract arrangements, significant capital investment was planned in the first year of operation. £1,000,000 was identified for service improvements that Parkwood Community Leisure wished to carry out and an additional £2,000,000 was available to begin to address the work identified in the Condition Surveys completed as part of the procurement process. Additional improvement works were also identified by Parkwood Community Leisure for Llantwit Major Leisure Centre, and as these were also beneficial for the overall contract cost, these were funded separately following agreement from Cabinet (30th May 2012).
Relevant Issues and Options
5. The first year of the contract has proven successful for both the Council and Parkwood leisure. Whilst there have been a number of minor issues, that were expected in the handover of a complex operation across six sites simultaneously, the service has seen physical improvements to the buildings, a growth in new activities and an increase in usage in key areas.
6. Direct comparisons in terms of the performance indicators required in the contract are difficult to ascertain after only one year as there is little comparative data as most of the indicators were not recorded when the service was operated directly by the Council. It is also recognised that in terms of usage statistics Penarth, Barry and Llantwit Major Leisure Centres have all endured reductions in service provision whilst improvement works were carried out to the buildings.
7. The initial £1,000,000 of improvement work in Barry and Penarth Leisure Centres and the additional improvement works at Llantwit Major Leisure Centres are now all complete. These works have significantly improved the quality of the product at these centres. Barry and Penarth Leisure Centres now have significantly more attractive reception areas complete with live catering facilities. New fitness suites have been provided at Barry, Penarth and Llantwit Major Leisure Centres, all of which are of high quality, easily comparable with the best that the private sector provide. In addition, new exercise studios have also been provided at Penarth and Llantwit Major Leisure Centres.
8. Some of the additional £2,000,000 for condition survey work has also been completed. However, the bulk of this work is planned for the next six months. This work will mainly consist of replacement to existing heating and ventilation installations and will also address outstanding electrical work. Once this work is completed, there will still be issues that will need addressing during the term of the contract that will remain the responsibility of the Council. There are also other improvement works, notably to changing areas, that would also be highly desirable to carry out but these will require significant funding.
9. Attached at Appendix A is information provided by Parkwood Community Leisure regarding the first year's performance of the contract.
Resource Implications (Financial and Employment)
10. Details of both financial and employment data is included in the information provided by Parkwood Community Leisure in their annual report to the Council.
11. Under the terms of the contract, the Council is currently paying Parkwood Community Leisure for the delivery of the service. This sum has, however, significantly reduced after just one year of the contract and will continue to do so at the end of year 2. By the end of year 3, Members are reminded that, subject to energy prices remaining in line with inflation, that Parkwood Community Leisure will be required to make a small payment to the Council on a monthly basis for the operation of the service. Over the course of the ten years of the contract, this should result in a positive return for the Council compared to the previous annual revenue cost which was in excess of £2,000,000 per annum when the facilities were operated directly by the Council.
12. Issues regarding the Council’s contract monitoring arrangements have previously been raised by Internal Audit. Grant Thornton LLP, as the Council’s External Auditors, are currently undertaking a review of the position. Any resulting recommendations will be addressed as part of the proposed annual performance report on the Leisure Management Contract.
Sustainability and Climate Change Implications
13. Many of the improvements being carried out as part of the Conditions Survey works are to increase the effectiveness and efficiency of major items of plant within the leisure centres. This is intrinsically linked to the Council's sustainability and climate change objectives.
Legal Implications (to Include Human Rights Implications)
14. Whilst the contract has still only been operating for one year it should be noted that the actual contract has still to be formally signed. The contract commenced under a letter of intent and this has been renewed as outstanding minor contract issues have been resolved. The contract should now be completed quickly as all parties are now in agreement on the outstanding minor issues.
Crime and Disorder Implications
15. Meaningful sports and leisure opportunities are now proven to have a positive effect on crime and disorder issues. The improvements made to the facilities and the additional services now offered in the leisure centres can only be beneficial in terms of providing additional constructive opportunities for physical activity.
Equal Opportunities Implications (to include Welsh Language issues)
16. Parkwood Community Leisure has demonstrated their commitment to equal opportunities during their first year of operation. Examples of this include: Welsh language information within the sites, continuation of specific activities for certain target groups and support to some disadvantaged groups who use the facilities.
17. The provision of services discussed in this report are integral to the Council's health and wellbeing objectives. The Leisure Management contract also demonstrates the Council's commitment to working in partnership to deliver high quality services to its customers.
Policy Framework and Budget
18. This report is a matter for Executive decision by Cabinet.
Consultation (including Ward Member Consultation)
19. No Members have been consulted on the content of this report as the issues are Vale-wide rather than Ward specific.
Relevant Scrutiny Committee
20. Economy and Environment.
Annual report received from Parkwood Community Leisure.
David Knevett, Operational Manager, Leisure and Tourism. Telephone 01446 704817.
Head of Finance
Operational Manager, Legal Services
Operational Manager, Property
Operational Manager, Human Resources
Sport and Play Manager
Rob Thomas, Director of Development Services.