Agenda item

To consider the joint report of the Cabinet Member for Culture and Leisure and the Cabinet Member for Performance and Resources concerning the future provision of leisure services in the City.

 

Please note that Appendix 3 is exempt from disclosure to the press and public by virtue of Paragraph 3 of Schedule 12A of the Local Government Act 1972 as amended (information relating to the financial or business affairs of any particular person including the authority holding that information). If Members wish to discuss Appendix 3, Council will need to consider resolving to exclude the press and public before doing so.

41.1    Councillor Norman, Deputy Leader of the Council and Cabinet Member for Performance and Resources, moved the recommendations set out in the report.

 

41.2    Councillor Norman noted that since 2020, the market had been challenging for leisure facilities from various reasons, including closures during the Covid-19 pandemic and inflationary pressures, exacerbated by the Russian invasion of Ukraine, which affected utilities costs and other services. She advised that local government also faced inflationary pressures and that for the 2023/24 financial year, the Council was currently estimating a £1.504m overspend.

 

Councillor Norman explained that since 2019, the Council had provided Aspire with £1.5m in financial support, including management fees, without seeking repayment. In the 2023/24 budget, the Council allocated £360k to Aspire and when the Board requested an additional £260k to fund their operations, the Council commissioned an independent report to obtain the assurances needed ensure that it would be a prudent use of taxpayers' money. The independent report outlined four key recommendations that Aspire needed to adhere to. They were:

 

1.    Transparent financial reporting – to enable the Council to better understand Aspire’s financial situation and identify areas where cost-saving measures could be implemented.

2.    Collaborative Revenue Enhancement Plan – to set out mechanisms for enhancing revenue and strategies for implementing and achieving the proposals in collaboration with the Council.

3.    Independent energy audit - to assess current energy usage, identify potential energy-saving measures, and estimate the financial impact of implementing those measures.

4.    Assessment of staff costs – as Aspire’s budget for 2023/2024 allocated an additional £500k on staff costs, this was necessary to understand where that money was being spent, any pay increases, and whether the expenditure was essential.

 

Councillor Norman stated that the report raised concerns about Aspire’s management of the city’s leisure services. Of particular concern was Aspire's decision to increase all staff salaries by 9.3% while facing financial difficulties. She acknowledged that the level of increase was understandable for those on lower incomes facing the impact of the cost of living crisis, but was questionable for those on higher salaries and noted that Council officers on comparable salaries received a pay award of between 2.2% and 2.5%. She advised, however, that the Council agreed to provide the additional funding, provided that Aspire adhered to the conditions outlined in the independent report.

 

Councillor Norman stated that the Administration had been shocked and saddened for the residents of Gloucester and the staff affected when they received notification that Aspire had decided to close the facilities. She emphasised that, within three weeks, the Council had already reopened some services, including swimming club sessions, and would continue to work tirelessly to reopen the rest of the leisure services for Gloucester’s residents. She expressed hope that the recommendations in the report would receive unanimous support.

 

41.3    Councillor Lewis seconded the motion.

 

41.4    Councillor Sawyer proposed the following amendment, which was seconded by Councillor Field, and proposed a replacement for recommendation (1) only:

 

“Council is asked to RESOLVE that:

 

(1)       The background to Aspire Trust’s decision to seek to go into liquidation and the Council’s disappointment at this decision is noted. The report and appendices into the closure of the sports centres be noted with council recording its concern that more wasn’t done to keep the sports centres open.

 

41.5    Councillor Sawyer stated that the Liberal Democrat Group would support the proposals aimed at moving forward to reopen the leisure services, but was moving an amendment to place on record an acknowledgement that the Administration could and should have done more to prevent the closure of services, given their knowledge of the financial issues Aspire was facing. She noted that the Administration had started the process of procuring a new leisure services provider too late, despite having 15 years to prepare, and that they were aware of the pension bond issues that would make it legally impossible for them to continue operating. She questioned why the Council had not thoroughly reviewed Aspire's accounts and asserted that the Administration could not claim to be surprised at the situation when the financial challenges were known to them.

 

41.6    Councillor Field, seconding the amendment, stated that the purpose of the amendment was to balance out a 'blame game' that had been occurring. He observed that Aspire had tried to continue operating, and while additional funding had been offered, the Administration had taken no action regarding the issue with the pension bond. He noted that the decision to outsource leisure service provisions to Aspire had been proposed by the Conservative Administration 15 years ago, with the claim that it would become self-funding and save taxpayers' money, but this had not materialised. He advised that the Overview and Scrutiny Committee had repeatedly attempted to obtain an update on the Aspire situation, but this was not forthcoming. He stated that the Administration should have been fully aware of Aspire's financial challenges a long time ago and should take responsibility and offer an apology for the current situation because not enough had been done to prevent it.

 

41.7    Councillor Norman advised that the amendment was not accepted.

 

41.8    Councillor Wilson highlighted that the leisure services contract had a 15-year duration and the Administration had had plenty of time to procure a new provider yet tried to rush through a last-minute contract extension. He stated that, while the Liberal Democrat group agreed with recommendations 2-6, the report provided a one-sided narrative of the events and left out important facts that contributed to the closure of the services, such as the impact of the cyber incident and the lack of interest in the pension bond concerns. He questioned what was discussed in contract management meetings between the Administration and Aspire and stated that more should have been done to prevent the closure.

 

41.9    Councillor A. Chambers stated that he supported the amendment and agreed that the report omitted important information on what had led to the closure of services. He expressed regret that the closure had affected many residents, particularly the staff members who lost their jobs and were facing financial difficulty and could not accept that the Administration were surprised by the current situation. He remarked that the £1.5m given to Aspire since 2019 could have been better spent on roads, schools, and other vital infrastructure and that the Council should have had options for replacement service providers in place several years before the end of the contract.

 

41.10  Councillor Cook, Leader of the Council and Cabinet Member for Environment, stated that the Council was procurement-ready, but had been advised by experienced independent consultants that, due to the impact of Covid-19, it was not the right time to commence the procurement and to pursue a contract extension instead, thus Aspire was offered the additional funding requested. He emphasised that it would not have been appropriate to write off Aspire’s debt, as it was taxpayers' money. He advised that that regular meetings took place with Aspire noting that both the former and current Section 151 Officers had expressed concerns about the robustness and transparency of Aspire’s accounts and the financial information provided.

 

41.11  Councillor Dr. Finnegan highlighted that it had previously been common practice for representatives from Aspire to attend the Overview and Scrutiny Committee to report on performance, but that she could not recall any attendance in recent years.

 

41.12  Councillor Chambers-Dubus noted that the Labour Group had raised concerns about Aspire several times, including in early 2023, and that the Administration had been aware of the financial concerns, but did not do enough to prevent them from escalating. She questioned why £1.5m had been provided to Aspire since 2019 instead of focusing on exploring at alternative options and called on the Administration to take accountability for the closure of services.

 

41.13  Councillor Lewis stated that he did not accept the points made by opposition Councillors. He advised that he had attended meetings to discuss Aspire’s financial situation and that the information provided lacked sufficient detail. He expressed, however, that he did not want to engage in a blame game and that he was instead focused on looking forward, restoring services and helping former Aspire staff, many of whom he’d spoken with, to find employment with the new provider. He noted that he, along with Council officers, the City’s MP, Richard Graham, and others had worked tirelessly to begin the process of reopening the facilities.

 

Councillor Lewis agreed that the circumstances leading to the closure of leisure services should be investigated at the appropriate time, but that the purpose of the report was to obtain approval for the steps required to reopen the leisure services as quickly as possible and provide employment for former Aspire staff. He noted that both the Audit and Governance Committee and the Overview and Scrutiny Committee could have looked into or raised concerns and that he would have been happy to attend if invited. He concluded by stating that the Administration could not be held responsible for Aspire’s decision to cease operating.

 

41.14  Councillor Dr. Trimnell stated that she was unable to accept the Administration’s position and that the need to take accountability could not be ignored. She questioned how long freelance workers could be expected to wait to get their jobs back.

 

41.15  Councillor Patel stated that it was not constructive to apportion blame at the current time and that he believed all Members worked hard to do their best for the residents of Gloucester. He noted that an investigation was needed in due course, but stressed the importance of looking forward in order to reopen the services. He expressed gratitude to the Cabinet Member for Leisure and Culture, the rest of the Cabinet, senior officers, and the City MP for their efforts towards reopening the services, which were of vital importance to both the physical and mental health of residents.

 

41.16  Councillor Hyman stated that he believed the Council did have a duty to provide leisure services, even if it was not a statutory requirement, and that the Administration should be held accountable. He expressed his concern at the impact of the closure on the 150 staff who had lost their jobs and noted that it was unacceptable that some staff members had found out the news of their employment termination via social media.

 

41.17 Councillor Padilla, Cabinet Member for Communities and Neighbourhoods, stated that it had been a very difficult time for the residents and staff members and that it was unfortunate that Aspire were unable to fulfil their commitments. He commended the efforts to reopen services and stated that it was necessary for all stakeholders to work together to achieve a full return for the good of residents’ health and wellbeing.

 

41.18  Councillor Morgan stated that it was counterproductive to look backwards when 150 people had lost their jobs and residents of Gloucester had lost access to vital leisure services. He called for Members to be united in working towards opening all services as swiftly as possible. He expressed confidence in Cabinet Members and officers working on the solution and said he was hopeful that an improved leisure service could be provided.

 

41.19  The amendment was put to a vote and was lost. Members reverted to debating the recommendations set out in the report and moved by Councillor Norman.

 

41.20  Councillor Hilton, Leader of the Liberal Democrat Group, stated, while his Group would support the recommendations in order to progress the reopening of services, the Administration was at fault and should have considered alternative options for providing leisure services much earlier, instead of focusing entirely on outsourcing when there were a number of examples where the outsourcing of Council services had not been successful. He expressed concern at the condition of various aspects of the facilities, which he believed had not been properly maintained over time, and called for work to be carried out. He noted that the Cabinet Member for Culture and Leisure had committed to reopening the swimming pool to the public before 1 January 2024 and that it was essential that this commitment was met.

 

41.21  Councillor Patel noted that there were various routes for opposition Councillors to raise concerns about services, including through their chairmanship of both the Audit and Governance Committee and the Overview and Scrutiny Committee. He reiterated Councillor Norman’s concern regarding the pay rise awarded to senior Aspire staff during a time of financial challenge.

 

41.22  Councillor Sawyer stated that it was the role of the Administration to ensure proper oversight of the all services and contracts, including Aspire.

 

41.23  Councillor Chambers-Dubus expressed concern that the Aspire situation was mirroring previous experiences with outsourced Council services that ended badly, and that simply finding a new provider without considering other options further risked taxpayers’ money. She noted that the additional £260k that Aspire had requested could have been put towards bringing the services in-house.

 

41.24  Councillor A. Chambers stated that it would have been helpful if representatives from Aspire had been permitted to be more involved in the debate. He stated that everyone wanted the services to reopen and that he wanted staff to receive any lost pay and for those who had paid for services to be refunded. He stated that he believed Councillor Lewis was doing his best to resolve the situation, but that the Council was operating reactively instead of proactively because it did not have a replacement service provider in place in good time.

 

41.25  Councillor Dr Finnegan noted that the Chair of the Overview and Scrutiny Committee had not asked for representatives from Aspire to report to the Committee in recent years.

 

41.26  Councillor Lewis stated that he was focused on looking forward and getting former Aspire staff into roles with the new provider.         

 

41.27  Councillor Norman reiterated that it was Aspire that took the decision to close the facilities and that the Administration could not be blamed when they had consistently offered support. She noted that Gloucester was not alone in experiencing issues with its leisure provision and cited several examples from around the country in local authorities run by different political parties. She noted that representatives from Aspire had not been asked to report to the Overview and Scrutiny Committee since January 2019 and that Members could have requested the opportunity to challenge the service provider. She questioned Aspire’s reference to the management fee not resulting in profit, when the organisation claimed to be a not-for-profit operation. She concluded by emphasising that Aspire had not provided the Council with sufficient financial transparency and asked Members to support the motion to enable services to reopen as quickly as possible.

 

41.28  RESOLVED that:

 

(1)       The background to Aspire Trust’s decision to seek to go into liquidation and the Council’s disappointment at this decision is noted.

 

(2)       Authority is delegated to the Managing Director, in consultation with the Head of Finance and Resources, to enter negotiations with Aspire Trust to work with their liquidators to secure the best outcome for all creditors of the Aspire Trust, including the Council.

 

(3)       Authority is delegated to the Managing Director, in consultation with the Cabinet Member for Culture and Leisure and the Cabinet Member for Performance and Resources, to procure a temporary provision and award a contract to an interim services provider to manage the facilities at GL1 and Oxstalls, with an aspiration that all those recently made redundant by Aspire Trust be given guaranteed priority interviews for relevant roles in the new provision.

 

(4)       Authority is delegated to the Managing Director with the support of other appropriate officers to continue to procure a long-term partner to manage the leisure provision within the City in accordance with the Council’s Sport and Physical Activity Strategy.

 

(5)       Officers are to provide regular updates to Party Group Leaders on the reestablishment of leisure services to the community, and to periodically report to the Overview and Scrutiny Committee.

 

(6)       A leisure contingency reserve fund of £260k is established to support the development of this interim leisure service management. Funding to be drawn down by the Managing Director and the Head of Culture and Leisure after consultation with the Cabinet Member for Culture and Leisure and the Cabinet Member for Performance and Resources.