Agenda item

1.            That the termination of the existing operator management contract with Places for People Leisure Management Ltd  (Places Leisure) for River Park and Meadowside Leisure Centres be approved due to circumstances related to the COVID-19 emergency from 31 August 2020 based on the heads of terms set out in exempt appendix 3 of report CAB3249.

2.            That the budget of up to £345,000 expenditure associated with the leisure centre contract termination be approved, which includes maintaining the River Park and Meadowside Leisure Centres during the closure period and up until 31 August 2020.

3.            That authority be delegated to the Strategic Director – Place in consultation with the Cabinet Member for Sport, Leisure and Communities and Deputy Leader and Cabinet Member for Finance and Risk,final negotiation of a settlement agreement based on the heads of terms in exempt appendix 3 of report CAB3249 and the Service Lead Legal to prepare, agree and enter into the relevant contractual arrangements to terminate the operator contract with  Places for People Leisure Management Ltd and associated agreements such as any lease and/or licence or transfer or novation arrangements.

4.            That the interim appointment of Sports and Leisure Management Ltd (Everyone Active) as operator of River Park and Meadowside Leisure Centres from 1 September 2020 be approved, based on the heads of terms in exempt appendix 2 of report CAB3249 until the procurement of a new operator in Meadowside Leisure Centre and the transition of operation from River Park Leisure Centre to the new Winchester Sport and Leisure Park. 

5.            That authority be delegated to the Strategic Director – Place in consultation with the Cabinet Member for Sport, Leisure and Communities and Deputy Leader and Cabinet Member for Finance and Risk,the finalisation of interim contract terms with Sports and Leisure Management Ltd  (Everyone Active)  based on the draft Heads of Term in exempt appendix 2 and the specification set out in exempt appendix 4 of report CAB3249 and the Service Lead Legal to prepare and enter into the relevant contractual arrangements for an interim operator contract with Sports and Leisure Management Ltd  (Everyone Active)  as necessary until permanent arrangements are put in place, inclusive of associated agreements such as temporary lease and/ or any licence or transfer or novation arrangements.

6.            That a budget of up to £790,000 for the management and operational expenditure be approved to enable the opening River Park and Meadowside Leisure Centres in September 2020 until the procurement of a new operator in the Meadowside Leisure Centre and the transition of operation from River Park Leisure Centre to the new Winchester Sport and Leisure Park. 

7.            That authority be delegated to the Strategic Director Places and the Service Lead Legal authority to use the negotiated procedure without prior publication process under s32 (2) (c) of the Public Contract Regulations 2015 for the appointment a new operator until the procurement of an operator for Meadowside Leisure Centre and the transition of operation from River Park Leisure Centre to the new Winchester Sport and Leisure Park and to issue a VEAT notice notifying of a direct award of an interim contract on the basis of urgency.

Councillor Prince introduced the report emphasising the significant impact of the enforced closure of centres due to the COVID-19 pandemic on both finances and the health and wellbeing of the community.  The new centre remained on track to open in the spring of 2021 with Everyone Active as the operator. The report proposed that the existing contracts with Places Leisure for both River Park Leisure Centre (RPLC) and Meadowside be terminated and that Everyone Active be appointed as the interim operator of both.

The Strategic Director: Place and Service Lead: Legal provided further explanation of the report’s proposals, including explaining that an open book approach was proposed with Everyone Active for the interim operation of the centres.  The costs outlined in paragraph 2.6 of the report consisted of the costs accrued over the closure period, hibernation costs, and did not include any compensation to Places Leisure for lost income or profit.  As owner of the buildings, the Council was obliged to comply with various statutory requirements and government guidance even when the centres were closed.  The figures include reflection of agreed provisions under the deed of variation, statutory and government guidance and associated budget provision, previously agreed with Places Leisure for early termination of the operator contract for RPLC (report CAB3037 refers).

The Head of Programme responded to each of the points made by Emma Back during public participation including welcoming the offer from Winchester SALT to help identify and communicate with local groups.  The Corporate Head of Resources (Interim) confirmed that the operator estimates had been scrutinised in great detail and the estimated net cost was as set out in paragraph 2.6 a) – d), correcting the totalled figure in the report to £1.128m.

At the invitation of the Leader, Councillors Lumby and Gottlieb addressed Cabinet as summarised briefly below.

Councillor Lumby

In general, welcomed proposals to reopen the two centres as soon as possible.  Queried whether consultation had been undertaken to ascertain which facilities people would want to see reopened first?  Asked whether the underwrite offer to Everyone Active was capped?  Questioned whether the payment to Places Leisure was justified given the state of the RPLC building.  Would the maintenance works at Meadowside be completed by the proposed reopening date and some further comments regarding the whether it was necessary for the contract for Meadowside to be transferred for such a short term period.

Councillor Gottlieb

In general, supported the proposals to pursue option C as outlined in the report.  However, queried whether there was adequate oversight of the levels of payment to the new operator for continued operation of RPLC.  Also, raised a number of questions regarding the proposed payment to Places Leisure, making reference to the history of the council’s contract with the operator and whether the council had adequately enforced repair obligations regarding the RPLC building.  He believed that before a decision was taken, all councillors should be provided a forum to properly scrutinise the legal background and financial justification for the proposed termination payment.

The Strategic Director: Place and the Service Lead: Legal responded to comments made, including reiterating assurances that legal and finance officers, together with external consultants, had carefully scrutinised the proposed settlement for the termination of the contract with Places Leisure.  The Strategic Director acknowledged that there were risks involved, particularly regarding the uncertainty over the implications of COVID-19, but negotiations had been undertaken to achieve the best possible solution for both the council and the wider community.  The Head of Programme also confirmed that timings and process of the tendering for the Meadowside centre had been given careful consideration with the preferred proposal as set out in the report.

Cabinet then moved into exempt session to discuss the information contained in the exempt appendix before returning to the open session as detailed below.

The Leader commented that there was a public expectation that leisure centres would reopen and the proposals allowed this, whilst also assisting with the smooth transfer between previous and new leisure centre operator.  She concurred with the wish that the centres reopen as soon as possible, but the various measures that were required prior to this happening meant that 1 September 2020 was the earliest practical date possible.

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

RESOLVED:

1.             That the termination of the existing operator management contract with Places for People Leisure Management Ltd (Places Leisure) for River Park and Meadowside Leisure Centres be approved due to circumstances related to the COVID-19 emergency from 31 August 2020 based on the heads of terms set out in exempt appendix 3 of report CAB3249.

2.             That the budget of up to £345,000 expenditure associated with the leisure centre contract termination be approved, which includes maintaining the River Park and Meadowside Leisure Centres during the closure period and up until 31 August 2020.

3.             That authority be delegated to the Strategic Director – Place in consultation with the Cabinet Member for Sport, Leisure and Communities and Deputy Leader and Cabinet Member for Finance and Risk, final negotiation of a settlement agreement based on the heads of terms in exempt appendix 3 of report CAB3249 and the Service Lead Legal to prepare, agree and enter into the relevant contractual arrangements to terminate the operator contract with  Places for People Leisure Management Ltd and associated agreements such as any lease and/or licence or transfer or novation arrangements.

4.             That the interim appointment of Sports and Leisure Management Ltd (Everyone Active) as operator of River Park and Meadowside Leisure Centres from 1 September 2020 be approved, based on the heads of terms in exempt appendix 2 of report CAB3249 until the procurement of a new operator in Meadowside Leisure Centre and the transition of operation from River Park Leisure Centre to the new Winchester Sport and Leisure Park. 

5.             That authority be delegated to the Strategic Director – Place in consultation with the Cabinet Member for Sport, Leisure and Communities and Deputy Leader and Cabinet Member for Finance and Risk,the finalisation of interim contract terms with Sports and Leisure Management Ltd  (Everyone Active)  based on the draft Heads of Term in exempt appendix 2 and the specification set out in exempt appendix 4 of report CAB3249 and the Service Lead Legal to prepare and enter into the relevant contractual arrangements for an interim operator contract with Sports and Leisure Management Ltd  (Everyone Active)  as necessary until permanent arrangements are put in place, inclusive of associated agreements such as temporary lease and/ or any licence or transfer or novation arrangements.

6.             That a budget of up to £790,000 for the management and operational expenditure be approved to enable the opening River Park and Meadowside Leisure Centres in September 2020 until the procurement of a new operator in the Meadowside Leisure Centre and the transition of operation from River Park Leisure Centre to the new Winchester Sport and Leisure Park. 

7.             That authority be delegated to the Strategic Director Places and the Service Lead Legal authority to use the negotiated procedure without prior publication process under s32 (2) (c) of the Public Contract Regulations 2015 for the appointment a new operator until the procurement of an operator for Meadowside Leisure Centre and the transition of operation from River Park Leisure Centre to the new Winchester Sport and Leisure Park and to issue a VEAT notice notifying of a direct award of an interim contract on the basis of urgency.