Agenda item

The Chairman advisedMembers that they would first debate the recommendationsin the report.  The exempt report under items 9 and 10 would be debated in closed session and any amendments will be taken when they return to the open session.

The Leader moved the item noting the recommendation from the earlier Cabinet meeting in support of opening the three leisure centres.  Reopening the leisure centres for use by the public and residents of Mid Sussex was an important step.  He thanked the residents for their patience whilst the negotiations had been on going and stated that it was critical that the Council approve the agreed deal. He confirmed the contract, agreed in 2014 based on a Sports England template, had been performing well before the start of the pandemic.  The management fee paid by Places Leisure made a significant contribution to the Council’s budget, which helped to pay for other services.  The Coronavirus Act had invoked a change in law clause which was designed to deal with the circumstance of Place Leisure not being able to run the leisure centres and was unforeseeable when the contract had been agreed.  The Council has been required to cover closure costs whilst the centres have been closed, to date £1.132m. The figure has been closely scrutinised and was a fair reflection of costs incurred. On re-opening, the clause in the contract requires that Places Leisure are no better or worse off, as there will be reduced capacity and income due to new operational measures and socially distancing guidelines.  The financial model provided by Places Leisure has been scrutinised and the forecast is as robust as possible, and the Council must agree to underwrite the difference. The level of funding will be reconciled at the end of every month and reported through the usual governance procedures. The Council will subsidise the centres this year through the use of General Reserves. This year the cost is estimated to be £2.5m and would not impact on the Revenue Budget.

This was seconded by the Cabinet Member for Environment and Service Delivery who reserved his right to speak.

Discussion was held on a number of issues including the risk of long-term subsidy of the leisure centres as the future was unknown, payment of the management fee and post Covid operational measures in place, the costs of the current closure to the Council, the declining use and future use of Clair Hall and the Council recommencing operations in the leisure centres.

The Chairman noted that any TUPE matters were not for consideration in the open session.

The Leader advised that it was likely that part of the management fee would be

covered by a Government scheme to support lost income due to the pandemic. The scheme will underwrite 75p per £1 for some management fee income.  He confirmed that no element for profit had been included in the costs and a small allowance had been included for the headquarter costs of Places Leisure.  Clair Hall has always been subsidised by the Council, and with the current pandemic it would be unviable to operate in line with social distancing guidelines. Removing the hall from the contract would reduce costs and allow Places Leisure to concentrate on the leisure centres. He commented that post Covid-19 operational measures were for Places Leisure to decide and they would need to comply with Government Covid Secure guidance and utilise best practice.  He highlighted Appendix A which set out the phased reopening, and that risks had been mitigated as much as possible to ensure the reopening of the leisure centres and the control mechanisms in place to scrutinise the use of General Reserves.  

Several members noted the flexibility of the offer achieved by the officers and supported the recommendations. Discussion was held on triggering the force majeure clause, governance procedures and alternative provision for the users of Clair Hall.

The Leader advised that the purpose of the report is to avoid triggering the force majeure clause and confirmed that the contract runs initially until 2029. It was not in the best interests of the residents of Mid Sussex or the Council to trigger this clause as it would delay reopening the centres.  He confirmed that Places Leisure control and manage the fee structure and must manage it so it is a commercially viable proposition for Mid Sussex residents. He confirmed there is demand from customers to use the leisure centres and officers would assist users of Clair Hall to find alternative premises.

The Chairman summarised the discussion that the Council has the option to trigger the force majeure clause if Places Leisure cannot meet its contractual obligations. However, the key focus should be on the reopening of the leisure centres.

A Member stated that the Council’s policy was to reopen the centres quickly and as financially viable as possible to allow Mid Sussex to return to a more normal way of life.