74/21
Consideration was given to a report that provided an update on
current performance levels of Fusion Lifestyle, the Council’s
leisure centre operator. It informed on the recovery and business
impact within the Contract experienced as a result of the
Covid 19 Pandemic and proposed contract
variations so as to mitigate those impacts, including the
adjustment of the future management fee profile to reflect the
impact of the pandemic.
.
In
discussion, reference was made to:
(a)
future
financial requests from Fusion. When
questioned, the Fusion representative in attendance advised that,
whilst he could not predict the future, the funding forecasts that
had been carried out by the organisation were predicting that there
should not be a need for any further requests to be made to the
Council for additional financial support;
(b)
the
pricing strategy. In expressing her
disappointment over the increased Leisure Centre prices and the
need for the facilities to be inclusive to all, a Member was
concerned that equivalent services that were being delivered by
private leisure facilities were in fact less expensive and she
therefore called on Fusion to adopt a more reasonable pricing
strategy;
(c)
the
intention for a meeting to be held with local Ward Members
regarding the Totnes Leisure Centre. In
recognising the different contractual relationship for Totnes
Leisure Centre, the intention for an imminent meeting to be
arranged between the Executive lead Member for Leisure; the three
local Ward Members; a representative of Tadpool; a representative of Fusion; and relevant
lead officers was welcomed;
(d)
consideration of the
Fusion Annual Report by the Overview and Scrutiny
Committee. The Chairman of the Overview
and Scrutiny Committee reminded the meeting that Fusion
representatives were due to attend the Committee meeting to be held
on 21 April 2022. As a result, Members
were encouraged to ask their operational questions at this
Committee meeting;
(e)
the
incredible challenges that had been faced by the leisure
industry. Since the offset of the
COVID-19 pandemic, some Members highlighted the extent of the
challenges that had been faced by the Leisure industry. Furthermore, the point was made that, in light of
the spiralling energy costs, the pressures facing the industry were
likely to continue;
(f)
comparisons to other
local authorities across the South West region. In support of the proposals, some Members
highlighted the extent of the financial subsidies that had been
provided by other local authorities across the region in order to
support their respective local leisure industries, which were far
greater than had been allocated by South Hams District
Council.
It was then:
RESOLVED
1.
That the
performance of the Fusion contract to date, wider market trends and
the financial information on Fusion’s performance in 2021 be
noted;
2.
That the
contract variation and changes to the management fee profile as set
out in Appendix A ((Table 1) of the presented agenda report) be
approved;
3.
That the
£272,242 shortfall in income of the leisure management fee in
2021-22 be funded from the Government COVID Grant funding (This
funding is in the COVID Losses Earmarked Reserve);
4.
That the
£174,632 shortfall in income of the leisure management fee in
2022-23 be funded from the Government COVID Grant funding (This
funding is in the COVID Losses Earmarked Reserve); and
5.
That the
£174,632 shortfall in income of the leisure management fee in
2023-24 be funded from the Government COVID Grant funding
(£33,915), the Leisure Earmarked Reserve (£42,851) and
the Business Rates Retention Earmarked Reserve
(£97,866).