Issue - meetings

1.      That it be agreed in principle that the progression to an Agency Variation to the existing Leisure Management Contract with Sports and Leisure Management Limited (SLM) who will be the agent with Everyone Active Charitable Trust as authorised sub-agent be approved (define in this report as Everyone Active).

2.      That authority be delegated to the Strategic Director – Place, in consultation with the Director of Legal, Section 151 Officer, to finalise Heads of Terms and enter into a Deed of Variation and any other necessary and appropriate agreements, including agreement of the detailed financial and operational arrangements.

3.      That the estimated financial benefits arising from the proposal be noted, including the introduction of a guaranteed uplift in annual income to the council.

Councillor Cutler introduced the report on behalf of Councillor Becker, emphasising that it followed updated guidance from HMRC and would not impact on the customer experience of the leisure centre.

At the invitation of the Leader, Councillors Lee and Godfrey addressed Cabinet as summarised below.

Councillor Lee

Councillor Lee welcomed the proposal provided that services to residents remain protected. He expressed caution regarding the reliance on external tax advice and suggested delaying implementation until formal HMRC guidance was published.  He raised several specific queries relating to the occupational licenses, the continuity of maintenance responsibilities, and the potential implications should the operator experience financial difficulties.  He suggested Cabinet should consider using any additional income for reinvestment in energy efficiency and decarbonisation measures across the leisure estate to support the council's green objectives.

Councillor Godfrey

Councillor Godfrey generally welcomed the proposal to transition to an agency operating model for the Sport and Leisure Park. He raised technical queries concerning the treatment of VAT and sought assurance that the council would be fully compensated for the additional administrative burden placed on staff. Finally, he questioned what protection was in place should HMRC change its guidance and queried why this beneficial fiscal solution had taken over three years to be brought forward.

Councillor Cutler, the Strategic Director and the Service Lead: Finance responded to the comments made including confirming that advice and best practice had been sought from other local authorities before the proposal in the report had been brought forward.

Cabinet moved into exempt session to discuss the contents of the exempt appendices before returning to open session to consider the report’s recommendations.

Cabinet agreed to the following for the reasons set out in the report and outlined above.

RESOLVED:

1.              That it be agreed in principle that the progression to an Agency Variation to the existing Leisure Management Contract with Sports and Leisure Management Limited (SLM) who will be the agent with Everyone Active Charitable Trust as authorised sub-agent be approved (define in this report as Everyone Active).

2.              That authority be delegated to the Strategic Director – Place, in consultation with the Director of Legal, Section 151 Officer, to finalise Heads of Terms and enter into a Deed of Variation and any other necessary and appropriate agreements, including agreement of the detailed financial and operational arrangements.

3.              That the estimated financial benefits arising from the proposal be noted, including the introduction of a guaranteed uplift in annual income to the council.