Monday, 9 February 2015

A leisure trust on its way....a follow-up post

(Update below)

Back in October the council tendered for a consultant 'to assist with the delivery of an alternative trust management arrangement for its Leisure Services'. This was a 14 month contract at unknown cost.
I wrote about it at the time and mentioned some of the recognised risks which I have repeated below.

It now looks like these outsourcing arrangements are well underway with RPT Consulting Ltd, based in Hampshire winning the 14 month contract to oversee the whole process. 'Expressions of interest' have now been invited to manage the entire cultural and leisure department, which includes Leisure Centres, Theatres, Libraries, Country Parks and Museums prior to the formal procurement process. It looks like the whole lot will be offloaded.

It is not exactly clear whether, given that cash is already beginning to flow, there has been any consultation or even informal discussion with elected members.

Given the spec for RPT Consulting, I'm assuming that a Trust is still on the cards but this will clearly be managed by a private company once the process is complete.

The budget proposals have already presented this as a no-other-option step with the warning that any 'Alternative solution is likely to entail closure'.

It might be a roaring success, I have no idea, but given that the object of the exercise is to save money there a few risks which will need to be considered.

Here's what I said back in October;

The 'money saving' notion stems from the fact that this trust will have charitable status, a loophole exists exempting the trust from the usual business rates and VAT. The idea is that it also (hopefully) attracts grant funding which would not otherwise be available although this carries it's own uncertainties.
The council will retain the freehold but will lease the properties to the trust and give it helping financial hand in the first few years.

It all sounds ideal and the launch of these trusts, which also involves the wholesale transfer of staff, is often accompanied with a fanfare of 'social enterprise' and 'community ownership'.

In reality the trusts are usually made up of unelected business and community representatives and a handful of councillors and essentially mean that direct control is lost and influence over council services is left to an independent body, protected from scrutiny by 'commercial confidentiality'.

An arms-length trust can also be a useful tool for selling off assets without the irritating scrutiny of full council.

The chief executive has informed councillors that the council is going to sell off all property, even if on a lease, which isn't 'vital' to the council. What will constitute 'vital' is anyone's guess, presumably the Parc Y Scarlets stadium and evangelical bowling alley will both be essential for the smooth running of carmscc...both currently paying nil rent.

The commissioning of a trust itself can also be an expensive exercise and the trust can find costs increasing as it lacks the local authorities' ability to use economies of scale.

Educational links and improvement projects can also become sidelined as trustees are bound by law to act in the best interest of the Board rather than the priorities of the local authority...

There are, I'm sure, many examples of good practice and maybe this is preferable than a complete outsourcing exercise to a distant private company although ultimate control over a leisure trust could, and now looks like it will be, be managed through such an arrangement. Complete transparency will be essential.

It's always worth checking out the pros and cons, a good plain summary of the cons can be found here (EU Strategy Paper 2008). Further ups and downs of leisure trusts can be googled.

Update 10th February
Cneifiwr has been digging a little deeper, see here, and the Carmarthen Journal reports that Unison Carmarthenshire will be lobbying councillors tomorrow at County Hall. Branch secretary Mark Evans said;

"We will be lobbying as the council wants to outsource many of the services it currently provides, which will lead to worse services and will be a real threat to jobs, terms and conditions — Carmarthenshire Council is for sale, basically.

"Our stance is anything here, even if it's a social enterprise or volunteers, these are the routes to privatisation, because there's not the community resources to maintain them. It is paving the way for private companies to come in — there will be no public services left in five to 10 years.

"Private companies won't get the resources of the local authority and will have to find a way to finance within their budget.

"If it is a private company then it will have to make a profit, so where's that money going to come from?

"We are fighting this on behalf of Carmarthenshire to save these services."

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