Agenda item

Report of the Executive Director (Resources, Environment and Cultural Services) setting out Finesse Leisure’s recommendation to proceed with a merger with Greenwich Leisure Ltd to deliver substantial savings in the operation of health and leisure facilities on behalf of the Council.

(Note: Further legal, financial and procurement implications of the proposal containing exempt information are detailed in the addendum in the Part II Private and Confidential section of the meeting – Agenda item 15(a) refers).

Report of the Executive Director (Resources, Environment and Cultural Services) setting out Finesse Leisure’s recommendation to proceed with a merger with Greenwich Leisure Ltd to deliver substantial savings in the operation of health and leisure facilities on behalf of the Council.

(1)        The Decision Taken

RESOLVED:

(1)     That subject to formal agreement by the management board of Finesse Leisure and Greenwich Leisure Limited (GLL), to proceed with the merger between these two organisations, the Cabinet agrees to novate the Council’s management agreement with Finesse Leisure for the operation of the health and leisure facilities, to GLL from April 2018.

(2)     That the Cabinet agrees the Corporate Property and Legal services teams prepare the necessary legal documentation to enable  the relevant leases held by  Finesse Leisure to be assigned to GLL.

(3)     That the Cabinet notes the level of savings, as set out in the exempt report at Agenda item 15(a) in the part II private and confidential section of the meeting, (Minute 82.1 refers), in the management fees from 2018/19 onwards and that they would be built into the Council’s budget setting process.

(4)     That the Cabinet agrees to give delegated authority to the Executive Director (Resources, Environment and Cultural Services), in consultation with the Executive Member (Policy and Culture) and, if relevant, the Monitoring Officer to agree any relevant changes that would be necessary in the management agreement and also to agree any other documents associated with the merger of Finesse Leisure and GLL that would impact on the Council.

(2)        Reasons for the Decision

Finesse Leisure was set up to operate a number of health and leisure facilities on behalf of the Council from January 2004 for a period of 25 years. The arrangements for the provision of these services were set out in the management agreement. It was clear that the climate of public expenditure was now very different from when it was formed in 2004, in particular, pressures on the Council through declining funding from central Government and increased capital maintenance costs had forced the Council to maximise the level of efficiencies from all of its service providers. Finesse Leisure was a relatively small leisure trust and it would struggle to reduce the management fees without impacting on service delivery.

Consequently, it had carried out a corporate strategy review and commissioned an independent feasibility study in order to reduce the level of management fees payable by the Council.  The conclusion of the review was to begin discussions with the UK’s largest charitable social enterprise, Greenwich Leisure Limited (GLL), to consider the opportunities and benefits of merger.

Subject to the approval of Finesse and GLL to proceed with the merger, the Finesse Leisure brand would no longer be seen at the Council’s facilities once the merger was complete, which was expected to be by April 2018.Overall, customers would see no change to the services which they currently enjoyed and they would benefit from the ability to use other GLL sites across the Country if they held a membership.

(Notes: (1)      Further legal, financial and procurement implications of the proposal containing exempt information were detailed in the addendum in the Part II Private and Confidential section of the meeting- Agenda item 15(a) and Minute 82.1 refer.

(2)     There were no declarations of interest by a Member(s) in respect of the matter decided).