Agenda item

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.

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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).