Cabinet will be asked to:

1. note the progress made under the new contract with SLM
2. note the updated financial implications
3. approve the investment (previously agreed by Cabinet in July 2016) in Central Park Leisure Centre and the new build Hornchurch Centre to be referred to Council for inclusion in the capital programme

Councillor Melvin Wallace, Cabinet Lead member for Culture and Community Engagement detailed the report to Cabinet.  In 2016 Cabinet agreed to award the Council’s Sports and Leisure Management Contract for a period of 20 years, from 1^st October, 2016, to Sport and Leisure Management Ltd.

This award of contract included investment in new health and fitness facilities at Central Park Leisure centre, the building of a new Hornchurch Sports Centre the operation of the new Sapphire Ice and Leisure and delegated responsibilities to Officers to negotiate a variation to the contract for the operation of Chafford Sports Complex subject to the costs to the Council being mitigated as far as possible. This also included future investment in the Noak Hill Sports centre as a part of the overall contract.

The contract was awarded following a full competitive tendering process.  The new state of the art provision will generate a profit to the benefit of Havering Council Tax payers.

The report before Cabinet updated Members of the progress made during the first year of this contract and the resulting financial implications.  The budget report will be before Cabinet again as an update in December, 2017 and approval will be sought at Council next week.

Cabinet:

1. Noted the progress made under the new contract with SLM;

2. Noted the updated revenue financial implications, for inclusion in the Medium Term Financial Strategy;

3. Noted that whilst the capital investment is planned to be  financed from borrowing, the capital financing costs will be met in full from the net savings to be realised across the lifespan of the contract within the leisure service budget;

4. Approved a contribution of £2.111m from the Business Risk Reserve to set up an earmarked Leisure Contract Reserve that will be utilised to support the financial performance of the service until business maturity is achieved in 2023/24;

5. Agreed that all budget virements to and from Leisure Services budgets will be subject to approval by the s151 Officer or their representative for the duration of the contract to ensure the integrity of the overall financial model is maintained.

6. Will recommend to Council that the capital expenditure and proposed financing as set out within the Exempt Appendix Financial Implications in Table 5 in the report, is approved for inclusion within the Approved Capital Programme.