Agenda item

Resolved: that the report be noted.

This item was considered after item nine on the agenda.

4.1      David Walton (Community Assets Manger) introduced the report; the following key points were noted:

• An internal audit in April 2014 had highlighted changes required to the monitoring of the leisure contract. These changes had been implemented and the new system was reflected in the information provided in the report.
• The technical monitoring of the contract had been outsourced.
• The Community Assets Manger was responsible for monitoring service delivery.
• The financial performance of the contract, in terms of the provider’s profits and losses was of less importance than the delivery of quality services to residents.
• The contract cost was approximately eight or nine per cent of the cost of running the leisure centres. The contractor was responsible for generating income through the development of the service.
• Providers were forecasting profit overall, although there may be losses in parts of the year; dependent on fluctuations in demand.
• In the future, the contract should enable the provider to pay Lewisham for the delivery of the service.
• There would be a benchmarking exercise at year seven of the contract (if the contractor met the conditions within the contract to be able to call it).
• The exercise would determine whether the initial income and expenditure projections were still valid. Benchmarking exercises would take place every five years following the initial term.
• The contract had been running for three and a half years.

4.2      David Walton (Community Assets Manager); Matt Henaughan (Community Resources Manager) and Liz Dart (Head of Culture and Community Development) responded to questions from the Committee, the following key points were noted:

• Projections for income and expenditure had been developed at the beginning of the contract; so it was expected that there would be variances in the levels of income projected and attained from month to month.
• The original budgets allocated might not have been applicable to the current circumstances.
• There were some areas of spending which appeared to have increased by significant amounts.
• Changes in expenditure and income from month to month could be explained by the difference between four and five week months, as well as the allocation of costs and supplies from one month to another.
• Losses would be envisaged in the winter months for swimming. The costs of maintaining and staffing the pool remained the same as the rest of the year but there was a lot less income.
• There was still a limited communications budget – but this was not as much as the budget available at the beginning of the contract.
• The Be Active programme (which provided free or subsidised use of leisure centres for specified groups) was popular – but not profitable.
• Wavelengths was primarily a swimming focused centre, which would not be expected to generate high levels of profit.
• Lifecycle works were taking place at the Bridge.
• The gym should be completed by 13 March, when works to the sports hall would begin.
• Work would also take place to refurbish the toilets and the dry change facilities.
• There would also be less noticeable changes, including repairs to the swimming pool pump and the air handling system.
• There would be a re-launch of the facilities following the completion of the works. Councillors would be notified when this was taking place.
• Lifecycle costs were included within the current contract costs- with spending guided by the original condition reports available at the start of the tender process.
• Once the works had been completed, the contractor would be expected to maintain the facilities in good condition.
• The Council was monitoring the contract closely in advance of the benchmarking exercise. Officers would work to negotiate the best possible outcome.
• The management fee for the 1Life contract was paid through the PFI (Private Finance Initiative) contract.

4.3      The Committee also discussed the possibility of making an unannounced visit to a leisure centre in the future.

Resolved: that the report be noted.