The Scrutiny Support Officer presented a report to outline the purpose of the meeting which was to present the Community Safety and Leisure Scrutiny Panel's draft final report on the Alternative Delivery Model for Sports and Leisure Services for consideration by the Panel, prior to submission to the Overview and Scrutiny Board.
Following a number of meetings, a draft final report had been prepared which summarised the information gathered and highlighted issues to explore in considering the areas of investigation. The draft final report had been considered at a previous meeting and updates and amendments that had been made to the report since it was previously submitted to the Panel were highlighted in bold.
The Assistant Director for Environment, Property and Commercial Services had also submitted some comments which reflected the updated position accurately and the Operations Manager was in attendance to provide a verbal update.
The Sport and Leisure Budget costs for 2014/2015, including the projected delivery costs for the new Middlesbrough Sports Village had been estimated at £2 million. This figure did not include the reduction of £430K that had been included in the Mayors proposed budget cuts. The subsidy for the Sports Village for the first year had been estimated at £380K. It was highlighted that anticipated income for the Sports Village included the sale of gym memberships and it was expected that two hundred current memberships at Clairville would transfer to the Sports Village.
It was clarified that the costs for capital investment would remain with the Council if the option to procure an external Trust was chosen. However this would be dependant on the details of the contract with the Trust. It was anticipated that a minimum ten year contract would be offered, although this was not yet confirmed, and the Council would retain responsibility for the fixed assets, including the buildings. One of the recommendations for a not-for-profit Trust model was that there would be no claw-back by the Council and any profits would be re-invested into the running of the Trust. The importance of using such profit to increase participation in sport across the town was highlighted.
A new standard criteria for Options Appraisals had been agreed by the Executive at a meeting the previous day. Max Associates, the Councils Consultants, had cross-referenced the new criteria against the criteria used for the Alternative Delivery Mechanism (ADM) for sport and leisure. Max Associates had concluded that the outcome was the same and an external Trust was still the recommended option. The recommended option would be presented to the Executive in December 2014 for the final decision.
In terms of the procurement processes it had been agreed that the Pre-Qualification Questionnaire (PPQ) would be issued before the final option had been agreed by Executive to avoid delay. The Panel was informed that final report would be submitted to the Executive at the same time as the Service Report.
In respect of Hemlington Recreation Centre it was confirmed that the Centre had been taken out of the scope as it was felt it was more suited to either Community Asset Transfer (CAT) or for it to remain with the Council.
Members of the Panel highlighted two issues in particular which were included in the recommendations. Members were keen to ensure that the terms and conditions of staff working in sport and leisure services were protected and to revisit the issue of traffic impact once the Prissick Sports Village development was complete.
AGREED as follows:
1. That the following conclusions be included in the Final Report:
a) Over the course of this review the panel has been consulted on the criteria for the options appraisal, including the associated weightings, by which the various models have been scored. Comments by the panel in relation to the proposed criteria have focused on the issue of staffing and the protection offered by TUPE. Irrespective of the model recommended through the options appraisal process the panel is keen to ensure that the implications for staff are fully explored.
b) The panel has previously expressed concerns in relation to the possible impact that Trust status could have on the Council particularly in respect of limiting the Councils flexibility with regard to management and control of the Trust. In light of the evidence received from neighbouring local authorities the panel is aware that there are benefits and risks to moving to a Trust model. However, it is accepted that this is also the case with maintaining the provision in-house.
c) The panel would like to take this opportunity to congratulate the Councils sport and leisure services staff on the fantastic work undertaken by the service to significantly increase income and reduce the financial subsidy. Over the last three years the service has successfully reduced its costs by £1.5m and in 2013/14 participation levels in sport and activity in Middlesbrough are for the first time above the national average.
d) With regard to the development of the iconic Sports Village at Prissick the panel was interested in considering what impact the development of this facility would have on other sport and leisure facilities across the town. It is worth noting that as part of the Leisure Vision and contract specification in Redcar and Cleveland it was specified by Members that all five centres had to be kept open. Given the scale and diversity of facilities to be offered at Middlesbroughs Sports Village and the potential impact on footfall at other venues across the town the panel is of the view that this is an issue that requires further consideration in Middlesbrough.
e) The panel is aware that in financial terms evidence indicates that the option of procuring the service from an Established Trust will deliver the greatest financial savings. However, the panel is also mindful that achieving financial savings are not the sole driver for reaching a decision on an alternative delivery model. The panel has been impressed with the achievements realised as a result of the partnership approach adopted in Stockton, as well as the achievements of the Councils sport and leisure service in reducing the financial subsidy and increasing levels of participation.
f) The panel has been reassured over the course of this review that if the Council opted to establish a Local Trust or procure leisure services from an Established Trust it would not be a case of transferring the assets. The Council would provide a lease, potentially for 10 years, and the assets would remain the property of the Council. This had previously been an issue of concern for the panel.
g) With regard to the various management options available Members of the panel have to date expressed a range of views on the future delivery options. For example, the view has been expressed that if a Trust model is put forward as the recommended option for Middlesbrough the establishment of a Local Trust or procuring a 'not for profit' Established Trust would be preferable. A member of the panel has also stated that their preference would be for the re-configuration of the in-house provision. The panel is fully aware that there are benefits and risks inherent in all three options.
h) Ultimately the panel accepts that the decision as to the future delivery of Middlesbroughs sport and leisure services offer will be reached on the basis of the financial savings required and the period over which these savings need to be realised. The panel appreciates that this is not an easy decision for the Council.
i) The panel is of the view, with the exception of one Member, that owing to the significant austerity measures put in place for local authority spending and the financial savings afforded by Trust status it is the right time for Middlesbrough to adopt a Trust model.
j) The panel also accepts, that as put forward by the Audit Commission, in most instances only market testing services through competitive tendering will ensure that potential efficiency savings and service improvements can be realised.
2. That the following recommendations be included in the Final Report:
a) That if the proposal to transfer the management of sport and leisure services to an external Trust is taken forward a commitment is made not to 'claw back all the possible savings' but to provide the Trust with the necessary resources to grow and improve for the long term benefit of all Middlesbrough residents.
b) That the panels preference is for the procurement of a 'not for profit' Established Trust, as opposed to a private sector operator, however the panel acknowledges that inviting variant bids will encourage innovation and enable the Council to benefit from the most cost effective option.
c) That if the option to procure an Established Trust is taken forward the current terms and conditions of staff working in sport and leisure services be protected and retained. This should be done in line with nationally recognised best practice approaches and go beyond the minimum legal requirements of TUPE.
d) That if the option to procure an Established Trust is pursued a local stakeholder board is formed, which includes political, community and staff representation to help inform and influence the Trust and reflect local issues.
e) That if the decision is taken to procure the service from an Established Trust surpluses generated in Middlesbrough are re-invested in the towns leisure facilities for the benefit of Middlesbrough residents.
f) That reference visits be undertaken as part of the commissioning process and an invitation extended to the Executive Member for Environment and Chair of the Community Safety and Leisure Scrutiny Panel to partake in these visits.
g) Pricing and accessibility is another key issue and the panel recommends that pay as you play access is maintained at all of the towns leisure facilities irrespective of the model adopted and that Middlesbrough residents benefit from discounted charges and membership rates.
h) That the Councils 'invest to save' principle in leisure facilities is maintained and that the changing facilities at the Rainbow Centre benefit from investment at the earliest opportunity. The panel is of the view that there is an immediate need to enhance these facilities for the benefit of Middlesbrough residents.
i) That social objectives are built into any contract specifications including the need to tackle health inequalities and provide diversionary activities for young people.
j) That efforts continue to ensure an integrated approach is adopted in respect of Tennis Worlds involvement in the development of the new Middlesbrough Sports Village to ensure a seamless service is delivered to customers using both facilities.
k) That the panel revisit the issue of traffic impact once the Prissick Sports Village development is complete owing to the concerns raised in respect of the potential impact the new facility will have on traffic in East Middlesbrough.
3. That the report would be submitted to the Overview and Scrutiny Board for consideration at its next meeting on 11 November 2014.