Agenda item

8.1

To update on the impact of the Council’s Leisure Investment and facilities Review (approved in November 2021) on the Sheffield City Trust group of companies and to approve required funding and pension arrangements.

8.2

RESOLVED: That Co-operative Executive:-

That Co-operative Executive.

1. Note the intention of Sheffield City Trust to not bid to operate the Major Sporting Facilities from the hand back date in 2024;

2. Note and approve the intention of Sheffield City Trust to agree a concurrent hand back of the other Sheffield leisure facilities to the Council, allowing the Council to include these in delivery of its approved Leisure Strategy from 2024.  Those facilities are.

•                English Institute of Sport Sheffield

•                Ice Sheffield

•                Sheffield City Hall

•                Heeley Pool & Gym

•                Springs Leisure Centre

•                Concord Leisure Centre

•                Beauchief, Birley and Tinsley Golf Courses;

1. Delegate authority to the Director of Finance and Commercial Services in consultation with the Director Legal and Governance to enter into revised funding agreement with Sheffield City Trust, as outlined in the report;

2. Delegate authority to the Director of Finance and Commercial services in consultation with the Director of legal and Governance to enter into revised pension arrangements with Sheffield City Trust, as outlined in the report; and

3. To the extent not covered by existing delegations, delegates authority to the Director of Finance and Commercial services in consultation with the Director of legal and Governance and Co-operative Executive Member for Finance and Resources to take such steps as deemed appropriate to achieve the objectives outlined in the report.

8.3

Reasons for Decision

8.3.1

The recommended option allows SCT to continue the provision of leisure and entertainment services up to the hand back of facilities in 2024 whilst giving the Council the most flexible options to deliver these services from all the SCT facilities in line with the approved Leisure Investment and Facility Review strategy.

8.3.2

It avoids a potential insolvency situation that could have significant impact on the delivery of these services in the short to medium term.

8.4

Alternatives Considered and Rejected

8.4.1

Not entering into revised funding arrangements

This is not an attractive or viable option for the Council.  If SCT does not have the required security of funding to operate as a going concern until it ends operation and wind up as a solvent business, then legally its Trustees would need to cease trading and the most likely outcome would be an insolvent wind up. In this situation, SCT would be operated by an insolvency practitioner and that would likely mean the closure of most of the leisure facilities before 2024. The best scenario would be hand back to the Council but due to the complexity of the arrangements that have been entered into over time, this is not guaranteed for all facilities.

Even then the Council would either have to operate the facilities or at short notice find another operator pending going to out to procurement under the Leisure Strategy. Having to enter into piece meal short term arrangements and the officer time involved could end up being less cost effective than funding SCT as set out in this report.  In addition, the position of staff in SCT would be unclear and there may be redundancies whereas under this arrangement, TUPE is likely to apply.

8.5

Any Interest Declared or Dispensation Granted

None

8.6

Reason for Exemption if Public/Press Excluded During Consideration

None

8.7

Respective Director Responsible for Implementation

Executive Director, Resources

8.8

Relevant Scrutiny and Policy Development Committee If Decision Called In

Overview and Scrutiny Committee

Please Note: This decision is not subject to call-in, in accordance with the Fast-Track process set out in Scrutiny Procedure Rule 17 of the Constitution.

8.1

To update on the impact of the Council’s Leisure Investment and facilities Review (approved in November 2021) on the Sheffield City Trust group of companies and to approve required funding and pension arrangements.

8.2

RESOLVED: That Co-operative Executive:-

That Co-operative Executive.

1. Note the intention of Sheffield City Trust to not bid to operate the Major Sporting Facilities from the hand back date in 2024;

2. Note and approve the intention of Sheffield City Trust to agree a concurrent hand back of the other Sheffield leisure facilities to the Council, allowing the Council to include these in delivery of its approved Leisure Strategy from 2024.  Those facilities are.

•                English Institute of Sport Sheffield

•                Ice Sheffield

•                Sheffield City Hall

•                Heeley Pool & Gym

•                Springs Leisure Centre

•                Concord Leisure Centre

•                Beauchief, Birley and Tinsley Golf Courses;

1. Delegate authority to the Director of Finance and Commercial Services in consultation with the Director Legal and Governance to enter into revised funding agreement with Sheffield City Trust, as outlined in the report;

2. Delegate authority to the Director of Finance and Commercial services in consultation with the Director of legal and Governance to enter into revised pension arrangements with Sheffield City Trust, as outlined in the report; and

3. To the extent not covered by existing delegations, delegates authority to the Director of Finance and Commercial services in consultation with the Director of legal and Governance and Co-operative Executive Member for Finance and Resources to take such steps as deemed appropriate to achieve the objectives outlined in the report.

8.3

Reasons for Decision

8.3.1

The recommended option allows SCT to continue the provision of leisure and entertainment services up to the hand back of facilities in 2024 whilst giving the Council the most flexible options to deliver these services from all the SCT facilities in line with the approved Leisure Investment and Facility Review strategy.

8.3.2

It avoids a potential insolvency situation that could have significant impact on the delivery of these services in the short to medium term.

8.4

Alternatives Considered and Rejected

8.4.1

Not entering into revised funding arrangements

This is not an attractive or viable option for the Council.  If SCT does not have the required security of funding to operate as a going concern until it ends operation and wind up as a solvent business, then legally its Trustees would need to cease trading and the most likely outcome would be an insolvent wind up. In this situation, SCT would be operated by an insolvency practitioner and that would likely mean the closure of most of the leisure facilities before 2024. The best scenario would be hand back to the Council but due to the complexity of the arrangements that have been entered into over time, this is not guaranteed for all facilities.

Even then the Council would either have to operate the facilities or at short notice find another operator pending going to out to procurement under the Leisure Strategy. Having to enter into piece meal short term arrangements and the officer time involved could end up being less cost effective than funding SCT as set out in this report.  In addition, the position of staff in SCT would be unclear and there may be redundancies whereas under this arrangement, TUPE is likely to apply.

8.5

Any Interest Declared or Dispensation Granted

None

8.6

Reason for Exemption if Public/Press Excluded During Consideration

None

8.7

Respective Director Responsible for Implementation

Executive Director, Resources

8.8

Relevant Scrutiny and Policy Development Committee If Decision Called In

Overview and Scrutiny Committee

Please Note: This decision is not subject to call-in, in accordance with the Fast-Track process set out in Scrutiny Procedure Rule 17 of the Constitution.