Agenda item

The Leader presented a report seeking approval to exercise the existing option to extend the current ten year leisure management contract with Places for People Leisure Limited (PfP) by a further five years to the end of November 2027.  The current contract also included a provision to vary the contract to include a new or replacement leisure centre at Broadbridge Heath.  It was therefore intended that the extended contract would include the management of the replacement Broadbridge Heath Leisure Centre (BBHLC), which was anticipated to open in early 2018.

The current contract provided for a significant payment to be made to the Council for the management and operation of Pavilions in The Park, Steyning Leisure Centre and Billingshurst Leisure Centre, whilst the management and operation of the existing BBHLC was carried out at a considerable cost to the Council.  Alongside proposals for building a replacement BBHLC, officers had been participating in ongoing negotiations with PfP to agree a contract sum to be paid to the Council in order for PfP to operate the replacement BBHLC.  An independent assessment of the likely revenue return of a replacement BBHLC to the Council had been undertaken based on the feasibility design proposals and a figure of £59,000 per annum (excluding the management of the Athletics track) had been included in the affordability calculations of building a replacement  BBHLC, as agreed by the Council in December 2015.  The negotiations had resulted in a final offer from PfP which was conditional on the Council extending the current contract for an additional five years to November 2027.

The final offer from PfP would result in a significant additional leisure management revenue contribution to the Council over the extended term of the contract, in accordance with the benefits expected from running a new purpose built facility with its associated efficiency and income generating opportunities.  It also guaranteed the Council an improved overall management fee comparable with estimated figures if the Council were to undertake a procurement exercise for the same proposal.

                        RESOLVED

(i)         That the extension of the existing leisure management contract with Places for People Leisure Limited for the period 1st December 2022 to 30^th November 2027 be approved, to include operating the replacement Broadbridge Heath Leisure Centre.

(ii)        That the proposal from Places for People Leisure Limited in respect of a variation to the current management fee payable to the Council linked to the opening date of the replacement Broadbridge Heath Leisure Centre be approved, as reported.

(iii)       That the Director of Community Services, in consultation with the Cabinet Member for Leisure and Culture, be authorised to agree the final details of the contract extension.

REASONS

(i)         The replacement Broadbridge Heath Leisure Centre requires the renegotiation of some aspects of the existing leisure management contract between the Council and Places for People Leisure Limited (PfP).  A negotiated extension offer would provide the Council with best value for money, as benchmarked by a recent independent evaluation.

(ii)        The replacement BBHLC will improve the Council’s revenue position once it is built and operational.

(iii)       The extension of the current contract will provide continued certainty for the management and operation of the Council’s Leisure Centres.