Agenda item

This report sets out the proposed 5-year extension to the Leisure Operating Contract with Freedom Leisure and provides detail concerning improvements and initiatives to achieve best value and support delivery of the Council’s Wellbeing agenda.

The Chair reminded the Committee that Appendix 1 of the report was a restricted document.   If the Committee wished to discuss the appendix members will need to pass a resolution for the press and the public to be excluded to this item.

The Chair invited the Environmental Services & Strategy Manager to present the report to members.  The report set out a proposal for a 5-year extension to the Leisure Operating Contract with Freedom Leisure from 1 April 2027 to 31 March 2032.  Details of the management fee for the duration of the extension period (appendix 1) had been provided as an exempt document due to it being commercially sensitive information.

The key proposals for members to note were set out from paragraph 4.5 of the report.  He highlighted the continuation of an enhanced and significant annual management fee for the extension period, providing the Council with cost certainty up until 2032 paid to the Council.   The proposals included significant capital investment including major upgrades to both leisure centre gym equipment and an upgrade to the popular 3G pitch and subbase at the Arun Leisure Centre.  Freedom Leisure will also build on their success with their highly valued healthy communities programme providing further focus on increasing the leisure activity of unrepresented groups through an additional Community Engagement post.  The inclusion of an energy benchmarking clause in the contract extension and whilst this had some financial risk to the Council, it would provide potential benefits allowing Freedom Leisure to renegotiate favourable energy costs with their suppliers.  On balance and in consultation with the Council’s Group Head of Finance, this was considered a reasonable amendment to the contract and one that would certainly be required if the contract went out to tender on the open market.   The proposals had been considered by industry experts the Sports Consultancy who had also worked on the original contract whose comments were summarised at paragraph 4.18, whose view was that the contract would provide a positive offer for the Council that would not be achieved through competitive tendering.  This was also the view of officers who had worked hard to foster a positive and proactive relationship with Freedom Leisure to deliver wellbeing opportunities to the community.  Despite the number of challenges to the leisure industry in recent years, the partnership between the Council and Freedom Leisure remained strong with Freedom Leisure delivering a number of important and beneficial projects for residents.          

The recommendation was proposed by Councillor Bicknell and seconded by Councillor Hayward.

The Chair invited questions and comments from members.  A view was expressed that information on the performance of the contract had not been included in the report and that the wellbeing outcomes had not been defined.  A comment was made that no capital investment was included for the Windmill Theatre, Littlehampton.  The Environmental Services & Strategy Manager replied that a report on Freedom Leisure’s trading and performance had been considered by the Committee at its meeting held on 25 January 2024, which had been well received, and key performance indicators were considered quarterly.  He appreciated the comments made about the timing of the report and explained it had been necessary due to the timeline required to extend the contract, as otherwise the Council may be required to go out to procurement may not be able to extend the contract.  The contract was rigorously monitored and a report on how the contract was performing would be considered by the Committee at its meeting on 4 February 2025.  The Leisure Wellbeing and Business Manager, whose role it was to monitor the performance of the contract against the KPIs and specifications, provided further details of the monitoring that took place.  He had daily communications with Freedom Leisure with performance data shared at monthly meetings and action taken if it was not positive.  A member commented that they had confidence in the service provided by Freedom Leisure and supported the extension of their contract.    

The Environmental Services & Strategy Manager responded to a number of comments concerning the Windmill Theatre capital investment, which members considered was an important provision in Littlehampton and should receive investment.  He advised that it would be for Freedom Leisure to put forward proposals that made financial sense for them.  It was for the Council to put forward a vision and proposal and if Freedom Leisure was asked to revisit it would impact the proposed management fee.  It was reasonable to understand why plans had not been put forward to include the Windmill Theatre.    However, this did not mean they were not committed to providing the service during the remainder of the contract.  Freedom Leisure had worked hard to bring the Windmill Theatre back to use following the fire and any proposals would likely include capital funding in the contract.  He advised that if the proposal was taken forward at this stage it would affect the completion of the contract.  He suggested that if the contract extension was approved officers would report back to a future Committee meeting with details of proposals for the Windmill Theatre and how this would affect the management fee. 

Responding to the answers provided by officers a member would have welcomed higher level monitoring with the results reported to members when considering approving the contract.  They also expressed the view that they would be happy for Freedom Leisure to undertake capital investment if that resulted in a lower management fee.  The Environmental Services & Strategy Manager advised that officers would be happy to undertake investigations into the available options and report back to the Committee with details of what the capital investment would look like and the implications to the management fee.

A member suggested that in future it may be helpful for the report to set out a range of options for the Committee to consider.  The Director of Environment and Communities advised that if the Committee wanted officers to look at different options for the Windmill Theatre, in this case there were more options to available than being funded by Freedom Leisure.  She undertook to provide a separate piece of work to look at options for the funding of the Windmill Theatre that would extend wider than Freedom Leisure.   This approach was welcomed by members. 

Clarification was sought as to whether the report on the Windmill Theatre would be considered by this Committee or the Economy Committee who have discussed the Theatre in the past and would it include broader options.  The Director of Environment and Communities advised that the Committee that would consider the report would depend on the types of funding sources found in line with the Council’s Constitution.

The Committee:

RESOLVED

Approves a 5-year extension of the Leisure Operating Contract from 1 April 2027 to 31 March 2032 based on the information outlined in this report.