To consider questions (if any) by members of the public of which the appropriate notice has been given to the Solicitor to the Council.
Minutes:
Eight members of the public registered to speak in relation to the referral from the Housing and Community Overview and Scrutiny Committee Call-in meeting on Wednesday 10 January 2018 relating to the Award of Leisure Contract Decision - CA/125/17, which was discussed under agenda item 8, Overview and Scrutiny Referrals.
1. Mick Dennis:
Mr Mayor, Councillors I’m a Trustee of Sportspace. Speakers tonight are going to address the Scrutiny Committee’s 4 concerns. I’m addressing the lack of credit given to our pro bono work to the community. So let’s start with your sports policy statement written by Councillor Harden, it’s rather good. I love the bit about maintaining a relationship with SportSpace, love the bit as well about the value to local businesses, a destination venue like the XC. So why did we build the XC? Why did our CEO come up with the idea, lead the grant application, and mastermind the whole thing? Why did our board enthuse about it, why did our management staff embrace all the extra work? Why? Because our commitment to our community is the kernel of our ethos. Its why we do everything, its why we try to be good employers, its why we use local suppliers, its why do so much outreach work, pro bono work which the industry calls sports development. The Scrutiny Committee heard the Herts Sports Partnership’s Chair, laud our sports development, he particularly praised the Herts Disability Games. He also said that although there are 10 Everyone Active Centres in Herts they do not engage at all the Herts Sports Partnership. He could not understand the bid scoring, nor can we. Glib promises about sports development in Everyone Active’s slick tender scored more highly than our bid based on detail knowledge of actual local challenges and opportunities. The new contract will specify some sports development work that is not the same thing as having us always looking for new ways to truly get everyone active. The contract will try to give protection to organisations like the swimming club. You’ve never needed to tell us to do that, it’s in our DNA. You’re trying to ensure value for money so please take proper account of the added value that comes from our ethos. We give that value to your community because we are part of it.
2. David Cove:
Good evening Mr Mayor and Councillors. Scrutiny Committee rightly highlighted concerns over financial assumptions. We have given Council Officers our TUPElist and indicative breakage costs. However, our concerns remain because consultants and officers have already twice mis-interpreted our employee data, which they have had since the initial review and the employee list they produced for us to use in the bid included a Gym Manager for Tring Sport Centre which doesn’t even have a gym. We would like to know what assumptions they are making this time. In business, the old adage is hope for the best but plan for the worst. Are you confident this is being done this time? I’ve been asked how we can afford to pay a fee now when before we wanted a subsidy. Firstly, it’s not a subsidy you pay us but a grant which we use to do many good things in the local community. It has reduced from £1.4m to £225,000 and we are committed to getting it to zero whilst still delivering all the good things we do. Secondly, the service levels and the tender are not the same as we provide now. You do get what you pay for. Another way of looking at it is, you have paid us £7.5m in grants over the past 13 years, and we have re-invested £8m back into the service. We have also secured £5.3m in external funding. Turning your £7.5m investment into £13.3m. Working to this specification, you will get less investment in sport but the Council will get a fee. In terms of the bid assumptions, SLM have promised capital monies but they will have to replace fitness equipment anyway so if you take out references to fitness and gym, how much is left as real investment? We also included 1 million pounds worth of fitness kit but we lease it. Was any allowance made for that as investment? We are putting approximately 1.6 million pounds worth of investment into the contract for free. Was any allowance made for that? Was any credit given for our service being re-invested back into the local services rather than paid to shareholders? Was any account taken of our proposal to invest £1m into Berkhamsted Sports Centre and to offer a profit with Dacorum Borough Council? What assumptions have been made as to the ongoing liabilities for the Council as they now underwrite the employee pension contribution over 20.6%. Currently, we take on all that risk. And finally, if someone turned up at your door promising to make all aspects of your life better and then pay you a large sum of money for the privilege, you would rightly be suspicious and want to know what the catch is. Thank you.
3. Brian Leonard, CBE
Mr Mayor and Councillors, I represent the National Association of Sport, Leisure and Cultural Trusts of which our SportSpace is a member. I’d like to first comment on the strategy of procurement, we are at a time when Local Authorities across the country are re-engineering their strategies for leisure and sport to respond to some of their biggest social issues and problems not just way beyond activity, recreation and drama, and through things like social inclusion, social coherence. There are now many examples of around the country of successful innovations by trust in this field being prevalent. Many involved partnerships between Trust and other charities, local charitable bodies. The alternative strategy to this approach is at the other extreme to operate facilities only in a standardised way through a national body for the benefit of people who habitually use them and can afford to do so. Our questions would be on whether the Council has been able fully to consider the range of chances it has in strategic issues. Second we have concerns about the trading structure of the body which has been has won the bid for the contract. As I understand it the company bids for the contract then sub-leases to a charitable body which it has set up. The body is able to claim business rate relief and also VAT concessions for its services. Two other subsidiaries of SLM then work in facilities and make the lion’s share of the profit. The recoverable VAT is very low. This is only what we can deduce, SLM want to keep their structure secret. “Sport” has issued 15 Local Authority FOI requests, most, and with most Local Authorities have been persuaded of the need for secrecy and are exempting the details of the work and the structure, some Local Authorities appear not to understand the structure “Sport” are challenging this with the Information Commissioner because in our view any model which uses tax payer funded reliefs and concessions should be transparent. We believe also that the complex structure involves risks in relation to VAT and business rate relief. PWC have produced a checklist for us, which shows that the risk can be real. I sent the checklist to the Council in June. At the Scrutiny Committee an Officer said that the Council has seen an approving letter from the HMRC about the structure. We would ask does this approve the entire set of the inter-company links or simply a part of it. Is the Council happy to give Business Rate relief, most of the benefit of which goes to a private sector company. Thank you.
4. Joanna Bussell
Thank you. I’m a lawyer and lead partner in Winckworth Sherwood’s Local Government Team. I’m one of the UK’s leading advisers in relation to leisure projects. I’ve established over 50 Leisure Trusts operating successfully throughout the UK and I’ve acted on behalf of Local Authorities in someof the most exciting leisure procurements. I was appointed to provide advice and support to the Council in relation to the establishment of Dacorum Sports Trust. This followed a vigorous and objective analysis of the Council’s options for the future management of services. The Council determined having regard to the significant benefits the Trust’s model, this is the best option for the Local Authority. Dacorum Sports Trust has gone from strength to strength since it was established in 2004 and it is held as an exemplar of a Trust achieving charitable purposesat no or significantly reduced costs to the Local Authority. Elected Members should be hugely proud of the success of Dacorum Sports Trust and the impact it’s had on the health and wellbeing of the local community. For the avoidance of doubt the Trust option is not a form of outsourcing its fundamentally different. However, it appears to me the Council has treated Dacorum Sports Trust as though it’s outsourced service that should be subject to market testing every 5 or so years. This is evidenced by the Council’s open letter to the Sports Network in August referring to the Council’s decision to re-tender. The Council did not tender in 2004 and it was under no obligation to tender 2007. The Council’s made a fundamental policy change, it’s opted for a new delivery model and outsourcing of leisure services without appearing this is the right option for the Council. Clearly why the Council didn’t seek to negotiate a revised commercial offer with Dacorum Sports Trust. Use the external consultants to benchmark the Dacorum Sports Trustoffer. This is exactly what happens in long term PPP type contracts. This would have saved the Council the time and costs of the exercise and resulted in a win win outcome. Continued management and operation of leisure services by an organisation that delivers first class leisure services and re-invests a 100 percent of every pound back into the local community. Two very specific areas of concern. First the procurement process – the Council adopted an open procedure with an extremely tight time frame. I’m not aware of any other leisure projects in the UK to date that has adopted this approach, the vast majority file competitive, a competitive dialogue approach with an 18 to 24 month time line. The open procedure allows for no dialogue with bidders and is only used where leisure services can be, that are purchased are entirely standard - paperclips, computer paper, not leisure services. For the avoidance of doubt, SLM have been selected solely on the basis of a written submission, there have been no dialogue meeting and as far as I amaware there’s been no site visits to SLM sites.
5. Rebecca Hemmant
Good Evening everyone I am Rebecca Hemmant, I am the Operations Director for Dacorum Sports Trust. I am addressing the item to reassess the Health & Safety criteria. The weighting placed on Health & Safety in the tender specification and specifically the method statement that included staffing, safeguarding, and health and safety management had a maximum scoring level of only 5 percent out of the total 60 percent quality mark. Sports facilities require extremely robust and relevant health and safety management systems and this element had been seriously under-rated within the original specification and does not in any way reflect the importance that we, DST place on health and safety within our community facilities. Health and safety is the first item on Dacorum Sports Trust Board agenda at every meeting and is the first item on all of the sites and corporate management team meetings as well. We have an exemplary record of health and safety and have over the past 13 years regularly scored in excess of 90 percent in our external audits. I fail to see how we could have been scored on an equal level to SLM. We were an industry leader in setting up the quality management systems and health and safety procedures for XC. Last year there was an incident that reached the national press, where we successfully defending a claim by having proof that appropriate processes and procedures were in place. Our successful defence has not only become case law but is also used as an example of good practice at the Association of British Climbing Walls. I do not have confidence in the evaluation process as Nick alluded to earlier, at last week’s meeting, the Director of the Herts Sports Partnership, questioned the sports development element where we scored less than SLM according to the criteria set. He confirms that we have given unprecedented support to sports development in Hertfordshire that SLM were largely invisible and have certainly not involved them in their current submission. And finally, at the Cabinet meeting in December, I had explained that I was heavily involved in the tender submission and I was astonished that our overall quality submission scored 39 percent as opposed to SLM’s 49.6. I asked how many years’ experience the Officer who assessed the quality aspect of our bid had in the day to day operational and strategic management of sports and leisure facilities. And despite not having that reply recorded in the Cabinet Minutes, the reply I did receive on the night was none. Thank you.
6. Andrew Farrow
Thank you Mr Mayor, Councillors, Good Evening. My name is Andrew Farrow, I am the Chair of Hemel Swimming Club. The club was established in 1913, our 240 members, 95 percent of them from Dacorum, use 35 hours of pool and gym time a week. We also promote 15 days of competition a year attracting over 2000 swimmers and their parents to Hemel, and represent Hemel in national and international competitions. We are the largest single source of income for Dacorum Sports Trust and we are managed solely by volunteers, supported by 2 professional coaches. Together with Berkhamsted and Tring Swimming clubs we issued an open letter to the Council last October about the tender documentation. Our concern was that limited consultation and a rushed process would lead to poorly structured contractual terms with unforeseen consequences, regardless of who awarded the contract. To give some examples - The basis on which the Council’s sports facilities prioritised between different groups and members of the public is highly complex, it is not clear what impact the Council’s new financial and performance criteria will have on the existing arrangements. Council officers have asked us to rely on a commitment to maintain the sustainability of Sports Clubs. Being simply sustainable is no guarantee that we will continue to be the vibrant organisation we are today. Swimming clubs rely on recruitment from swimming lessons, a key tension with centre operators focused on revenue. This wasn’t addressed in the tender because of the erroneous assumption that swimming clubs were in fact responsible for lessons in Dacorum which we are not. Council Officers have also told us that market forces will prevent excessive price increases. This might be true for gym or sports halls but the Council is a monopoly supplier of 25 metre pool time in Hemel. Where are those market forces going to come from to protect my club? The Council is being asked to consider the benefit to the local community of the decision to appoint SLM. As a club run by volunteers from the local community, we see a number of risks in a relationship with SLM, against which we are offered no effective long term safeguards and which will almost certainly involve a significant investment of volunteer time in the foreseeable future, which we would prefer to spend investing into the development of our sport. Thank you very much.
7. Lindsey Nash-Simpson
Hello everybody and hello everybody I didn’t meet last week. I’ve been asked to speak on behalf of the community and the 8,000 people who have signed the petition, more about that in a minute. So at Council last week, we listened to hours of debate about the decision to terminate SportSpace and go out to tender. Strong evidence cast doubt on the process and results and we heard about a rushed and secretive project. We also saw passion on both sides and I am sure of everyone’s good intent, but one compelling fact remains. None of this should be happening. Certainly not yet. When the Council terminated SportSpace it delivered the corporate equivalent of dumping your partner of 14 years, by text. It came without warning, there were no fundamental issues with the relationship and the Council did not want to talk. Frankly Dacorum expects more. Terminating a long term partnership that is working without any warning, or dialogue is at best naïve and at worst, negligent. We can only assume that you have been given very poor advice to do this. The current decision will fundamentally alter how leisure services are delivered but without any real community consultation, or an agreed sport strategy, it’s incoherent and it’s just wrong. Up to now, only 31 residents have been consulted by the Council. The I Love SportSpace work represents over 8,000 people and their message is loud and clear, keep leisure services not-for-profit, abandon this process and open re-negotiations with SportSpace. Why? Because SportSpace consistently shows it is commercial and community focused. So our most vulnerable have leisure services, not just those that can pay. But this option isn’t even on the table for you to consider. Your electorate are thoughtful, intelligent and fully engaged in what’s happening here. And they are reasonable. We get that if genuine discussions between the Council and SportSpace don’t produce the right deal, for both sides, then other options must be looked at. How you vote tonight as our representatives would greatly impact Dacorum’s public health, far into the future. Don’t be the Council who threw away one of the UK’s most respected Sports Trust. Thank you.
8. Brian Malyon
Mr Mayor, Councillors, my name is Brian Malyon, I am the Chair of Dacorum Sports Trust. I am a life-long Conservative voter and have been bitterly disappointed at the way the Trust has been treated by this Council after 14 successful years. We have had inaccurate consultants’ reports, a fundamental change in the Council’s approach to sports and leisure provision, without any consultation. A tender process with flaws and problems. A dubious evaluation. A Cabinet decision with financial uncertainty, complex tax arrangements, health and safety concerns and no community involvement. I am not surprised this has resulted in a great deal of outcry from local people. None of this needed to happen. We know the Council are under financial pressure, so 12 months ago I met the Leader of the Council and offered to re-negotiate the existing contract. An offer that was refused. So we say again tonight, come and talk to us, we have been partners for 14 years, we want to help and you already know we can deliver. Councillors, you have a choice. Allow our sports and leisure facilities to be managed by a profit-orientated company, an organisation with a complex tax structure and no link to our community or re-negotiate the current contract with a local charitable trust, run by local people, who use local suppliers. A trust that will continue to invest all surpluses back into our community and not into the pockets of shareholders. I love SportSpace and so do the people here tonight and the 8,000, I repeat, 8,000 who have signed the community petition. So I say to you, as our elected representatives, the Council has been badly advised. Do not rush headlong into a 10 year deal on the basis of a flawed process. Do the right thing, take heed of the Scrutiny Committee concerns, listen to your community, and recommend that the tender process is abandoned and the Council re-negotiate the existing contract with Dacorum Sports Trust. Thank you for your time.
The Mayor thanked the speakers for their clarity of speeches and for keeping more or less to the time limit given.