Agenda item

REQUISITION OF A CABINET DECISION - AWARD OF THE SPORT AND LEISURE MANAGEMENT CONTRACT

Report attached.

Minutes:

Prior to the start of the meeting Members considered a motion to defer consideration of the item as some Members had not received the officer’s response to the requisitioner’s questions. The motion to defer consideration of the item was lost by 6 votes to 8.

 

Councillors Ray Morgon and Keith Darvill addressed the Board and gave the reasons for the call-in of the Cabinet decision.

 

Members were given a copy of the answers to the questions that had been put forward by the requisitioner’s. A copy of which is appended to these minutes.

 

The Council’s Health & Wellbeing Manager advised that the tender had been through different paths. Firstly there had been initial expressions of interest from contractors which had taken the form of a pre-qualification questionnaire, followed by an invitation to tender. The invitation to tender allowed tenderers to tell the Council how they would run the leisure centres, how they would develop sports and leisure facilities for the community and  the opportunity for them to explain how much money they would be willing to invest and how much money they were willing to give the Council. A business plan had to be submitted by the tenderer as part of the Council’s evaluation model, which had to be passed for their continuation in the process.

 

The evaluation had been scored 50% on price and 50% on quality. All of the documents that had been provided by the contractors during the tendering process became legal documents and if the successful contractor wished to make amendments to what had been submitted then they would have to enter into discussions with the Council.

 

Officers advised that investigations had been carried out into the two contractors to see current centres that they ran and how they were performing. These investigations had been taken a step further by carrying out mystery visits to four of the contractor’s sites.

 

In response to a question, officers confirmed that the Best and Final Offer (BAFO) was the price that the tenderers were offering and that was the base on which the contract was awarded. The contract was awarded through a competitive tendering process which could not be re-negotiated once the BAFO had been submitted. The contract would also include all the service level specifications required by the Council.

 

In response to a question regarding variations to the contract price and how Members would be notified prior to entering into the contract, the Cabinet Member for Culture and Community Engagement advised that if there was any variation to the monies that the Council was to receive then all Group Leaders would be informed.

 

Members questioned why the Council had to choose one of the two BAFOs that had been received and not seek further offers from other contractors. In response officers advised that the Cabinet had had a third option which was  not accept one of the offers, but that would have left the Council with no operator to run its leisure centres come 1 October this year.

 

Officers confirmed that the services to be provided by the contractors were included in the specification that backed up the tenders. The leisure centres would provide the same services as they did now. The centres were very popular with over a million visits each year. The number of visits would increase over time due to the opening of the new Romford Leisure Centre and the Broxhill Centre. As part of the tender process the contractors had to submit a sports development plan covering the first 18 months of the contract, as to how they were going to develop specific sports and how they planned to work with communities and clubs developing sports in the community. The contractors had also had to submit a Community Health and Wellbeing Plan which talked about the health benefits of physical activity. These plans would also have to be submitted on an annual basis and signed off by the Council. It was agreed that it would be useful for the relevant Overview & Scrutiny sub-committee to receive notification of the services to be provided by the successful contractor. Members advised that there had been a suggestion in the Cabinet report that the contract be reviewed by the sub-committee after the first year of operation and furthermore.

 

Officers advised that performance monitoring would continue throughout the length of the contract and quarterly meetings with the contractor would take place that would include the Lead Member. The annual performance report would also be made available to Members.

 

Officers confirmed that there were protected clubs within the contract for example the Learning Disability Society that swam at Chafford Sports Complex. There were also aquatics plans and an ice development plan for the new Romford Leisure Centre. Officers confirmed that free swimming and badminton for the over 50s, was funded by Social Services, and free under 8s swimming were part of the services to be offered.

 

Officers advised that the whole purpose of the contract was to provide an upgrade to the existing facilities for residents, to provide a sustainable model for the future that was effectively self-funding through the business plan revenue generated.

 

Officers confirmed that now the Chafford School was no longer under the control of the Council’s Education Authority, discussions were on-going with the Academy Trust. The Council would require the sports complex land be leased back to the Council for the period of the next contract, at a peppercorn rent, maximising potential by providing community use, with   the school paying  an appropriate amount for the use of the facilities.

 

In response to a question relating to answers given to questions 4 and 5. Officers confirmed that the capital spend on the various sports facilities in the last ten years had been funded from the 3.1m “lifecycle” capital allocation approved prior to the start of the leisure contract which was funded by the Council.

 

In response to a question regarding the communities using the facilities and how they would measure the services provided, officers confirmed that the current contractor had customer forums that allowed customers to talk about any concerns that they had. There was also a National Benchmarking Survey that was undertaken by users of the centres which fed back into an improvement plan. Mystery shops were also undertaken as part of the Quest assessment.

 

In response to a question relating to how the Council could enforce efficiencies, officers advised that there was a contractual obligation on the contractor to pay the Council the monies stipulated. The monthly meetings with the contractors would continue along with quarterly monitoring meetings. The preferred contractor was backed by a parent company which gave some stability to the contractor and the parent company would guarantee the service provision and payment of monies. If the monies were not paid then the Council would have legal recourse through the contract to seek resolution. .

 

In response to a question regarding the contractor’s pricing plan, officers advised that other than some “controlled prices” the contractor was not obliged to seek the Council’s agreement on any increase or decrease in prices, although the contractor had indicated in their tender submission that as a matter of courtesy they would show their proposed pricing structure to the Council as a matter of best practice. The Council could not dictate prices to the contractor as this would have affected the contract price and the ability to invest in the contract. The prices the contractor had been charging previously had held very steady in comparison to the private sector and were very favourable. The contractor also offered concessionary prices for key target groups and under the contract would have to offer favourable prices to the previously mentioned aquatics and ice clubs. The contractor had to remain competitive to achieve the footfall which achieved the revenue position.

 

Members questioned the income generation as the current contractor had effectively been subsidised by the Council and that if the contractor was looking at ways of making savings then this could be achieved by the contractor either reducing staffing costs, increasing footfall or raising prices or indeed a combination of all three options. In response officers highlighted the importance of the new facilities that were part of the new contract particularly the new Romford Leisure Centre which had been designed to make it a very sustainable facility to generate the revenue to support an increase in revenue to the Council. Mention was also made of the new Broxhill Centre and the enlarged Central Park Leisure Centre which would have an enlarged gym as there had previously been problems with a higher than average attrition rate as gym members were having to wait longer times to be able to use the equipment as the gym had been a victim of its own success.

 

In response to a question regarding the Council’s previous experience of contract procurement and the twenty year length of the contract, officers advised that the business plans had been very thorough and that a whole raft of analysis of the plans had taken place and each one had been vigorously scrutinised just to get them to first base in the process.

 

In response to Members’ concerns that they had been unable to scrutinise each of the business plans officers responded by commenting that because each of the business plans had been between 60 to 70 pages then the headlines of the plans had been provided for Members. It was noted that Members had concerns on the summary of the business plans and felt that more information could have been provided by officers to allow Members to “drill down” on the detail more effectively. Officers also confirmed that the assumptions on footfall had been part of the business plans.

 

In response to a question on whether the contractor would own or lease the sports equipment, officers confirmed that the contractor would be leasing the sports equipment as this allowed for easier updating/upgrading of the equipment which allowed for driven income generation.

 

In response to a question regarding the year by year cost of the proposed Council borrowing and loan pay back, officers clarified that the borrowing was being done by the Council and gave an explanation of the pay back details.

 

Officers provided Members with a summary of the financial analysis of the BAFO bids received which showed how the price score had been established. Officers also clarified various points to do with proposed investments, revenue costs to the Council and payments by the contractor to the Council.

 

In response to a question regarding the loan details officers confirmed that the Council was able to borrow the money at a preferential rate, better than a commercial organisation, from the Public Works Loan Board.

 

Several members commented that the recent National Benchmarking Surveys for both the Hornchurch Sports Centre and Central Park Leisure Centre had shown weaknesses in cleanliness of changing rooms and in general which was something  personally experienced by Members. Despite promises to continue to improve the cleanliness of the centres Members felt the current contractor was still falling some way short of providing an acceptable level of cleanliness and asked officers for clarification of how the contractor has evidenced how it would tackle the problem. Officers commented that the issue had been continuous throughout the existing contract which the Council had had to address on a number of occasions. In their support, the current contractor had tried to address the issue by employing full time cleaners. This was an area that would be closely monitored by officers in the new contract. Officers also commented that they would continue to work closely with the contractor and at the same time were not defending the contractor in this instance as there were still issues with the cleanliness of the leisure centres. Officers also confirmed that the reason that the National Benchmarking Surveys and Quest were carried out was due to them being totally independent.

 

Officers confirmed that as part of the contract, subject to the planning permission, a brand new Hornchurch Sports Centre was being built which would have a totally new feel and be maintained to the highest levels.

 

In response to a question regarding the current cleaning arrangements, officers confirmed that the current contractor, in certain areas, did have hourly sign off sheets following cleaning and that the contractors employed their own cleaners and did not sub-contract the work out.

 

Members also made mention of the Brentwood Centre’s user group and suggested that perhaps a user group was something that officers could look at introducing into the new contract.

 

Members agreed that going forward the contract should include strict service level agreements (SLAs) and penalty clauses regarding the cleanliness of the leisure centres to enforce the contractor to clean to the highest level. Officers undertook to take back Member concerns to the contractor, during the procurement process and to investigate the possibility of inserting penalty clauses around the SLAs into the contract. Officers confirmed that the existing contract did not have penalty clauses inserted.

 

Member’s suggested that it be delegated to the Cabinet Member to ensure that SLAs and penalty clauses around cleanliness of the centres be incorporated in the new contract. Members also wished to see a comparison of what was in the existing contract and what was in the new contract as Members had concerns over the delivery of the cleanliness of the centres.

 

The Chief Operating Officer advised that they had received the message loud and clear regarding the cleanliness of the centres and that as a separate issue discussions would be had with the Head of Cultural and Community Access to more robustly address the current issues within the existing current contract. Secondly officers would make sure that robust performance measures regarding cleanliness were contained within the new contract and if it was possible to insert penalty clauses; but at present it was impossible to confirm from a legal perspective whether these could be written into the contract but every effort would be made to reflect Member’s concerns. Officers would  ensure the cleanliness of the centres receive far higher scrutiny at the monthly and quarterly monitoring between officers and the contractor and take the point about the user groups. The totality of the award of the contract and the cleanliness and quality of the facilities was absolutely critical, alongside the return on investment and value that was received from enhanced, sustainable, new facilities.

Once legal investigations had been made, officers would feedback to the Lead Member to disseminate to Group Leaders.

 

Members received  clarification of the evaluation scoring of both tenderer A and B which had included both a price and quality evaluation, evaluation of contract risk, method statement around the aquatic and ice development plans, a method statement regarding Community Health and Wellbeing, a method statement on Health and Safety, a method statement on Safeguarding and mystery visits.

 

The Chief Operating Officer confirmed that the re-launch of the new contract would show the enhanced offer to residents going forward and would also acknowledge health, social inclusion, working with vulnerable residents which were critical to the health and wellbeing of the borough. The wider offer also took into account the addition of approximately 10,000 new homes that were due to be built in the borough in the next five or six years.

 

At this point the Cabinet Member for Culture and Community Engagement left the room whilst the Board voted on the decision as to uphold or dismiss the call-in of the Cabinet decision taken on 12 July 2016.

 

The call-in was dismissed and the original decision taken by Cabinet on 12 July 2016 stood as previously agreed.

 

The vote for the decision as to whether to uphold or dismiss the call-in was carried by 12 votes to 0 with 3 abstentions.

 

Councillors Smith, Kelly, Misir, Patel, Persaud, Trew, M. White, Ford, Hawthorn, de Wulverton, Glanville and Durant voted for the dismissal

 

Councillors Darvill, Matthews & Morgon abstained from voting.

 

 

 

 

 

Supporting documents: