1. Collaborative action
Feedback from our survey work suggests that councils and operators consider the following options:
- Work together to establish the impact of increased utility costs on operational budgets and determine what these are as a proportion of their turnover.
- Work in partnership to exit from any relief (i.e. COVID-19 loan schemes) or service changes as soon as reasonably possible, including agreeing contract variations if operational requirements have changed significantly.
- Work in partnership, openly and pragmatically, during the transition to ensure contracts are still relevant and sustainable whilst delivering value in the medium and long term.
- Work within a joint understanding that the economic conditions of the current service is not consistent nor compliant with the conditions when service contracts were entered into.
- For operators that submit data through Moving Communities, using your local reports to present social and economic impact alongside your financial costs to ensure a comprehensive understanding of the impact of any services changes informs your decisions.
2. Service sustainability
Options for securing service sustainability in the short-medium term will include difficult political and operational choices, and good practice suggests full discussion is had in both spheres, and with relevant partners like public health, before a final decision is made.
The list below reflects a menu of options which have been tried in local areas – they will not all be appropriate for every area and each area will need to take an informed decision about what works for them:
- A variation in management fee, if affordable for the council in order to keep the whole service delivered despite the huge escalation in costs.
- Deferment or waiver of management fees paid to councils or bringing forward fees to be paid to operators to assist with cashflow.
- Review concessions against your council’s own policies for your communities. Ensure concessionary pricing is effectively targeted at those groups who cannot afford to pay standard rates and help to meet social outcomes. This may require you to make difficult decisions about to whom concessions are applied and the scale of concessions offered to ensure that they are being applied equitably. You may also identify groups who were not previously receiving support but should now receive it.
- Review prices and programming, including opening hours, to ensure facilities are being effectively utilised and income from fees and charges is optimised.
- You may consider it appropriate to allow your operator(s) to apply a price supplement for those activities that take place in energy intensive facilities, such as swimming pools, and provide the public with transparency as to the impact of energy costs on provision.
- Consider the option for compressed hours of opening; particularly during the winter months where utility demand is greatest, costs remain at their highest and pressure is on the national total energy usage.
- Review the temporary closure of energy-intensive facilities within leisure centres during the winter months (pools, health suites). This could also be where a balance of appropriate activity opportunity can be retained across the council area, or through collaboration with neighbouring councils with good transport links.
- Review the temporary closure of older, more energy and net carbon inefficient buildings, whilst newer energy-efficient facilities retain services.
- Monitor the impact of any adjustments in pricing and concessions on footfall and participation especially with regard to accessibility and local community representation.
3. Consider contract negotiations
The impact and risk associated with the energy cost crisis is wide reaching and councils are facing considerable financial pressures. As leisure services are reviewed alongside other services, the wider implications their loss will have on local health and productivity may inform that discussion. From a practical perspective, it is highly unlikely that a change of operating model will solve the challenges of rising energy costs so working to manage these risks with your current operator can be helpful in the short-term.
Renegotiating your contracts to share some of the utility cost impacts could include the following measures:
- Supporting a more consistent approach to allocating risk around utilities within contracts, whereby operators continue to carry utilities consumption risk and councils carry utilities tariff risk above defined thresholds. This could also include purchasing of in line with the council’s own procurement.
- Looking to renegotiate contracts to accept some share of utility tariff risk for a defined period (where there is no such provision within a contract) in return for securing reductions in energy consumption and investment in energy saving measures.
- Giving careful consideration to any proposed changes in your contracts to ensure the council is complying with its duties under the Public Contract Regulations, including working with procurement and legal colleagues.
- Reviewing your overall provision, including non-facility based activities.
4. Further Measures
If applying the above measures is not sufficient in moving a contract into a sustainable position, you may be forced to seriously consider the future of your least financially viable and/or most energy intensive facilities (e.g. swimming pools, ice centres, sauna suites).
The ageing nature of a large part of the public sector estate means that the fabric of many buildings is unable to support the changes required to reduce energy usage or add renewable power systems to it. Equally, many of the designs are no longer meeting the needs of the community.
There are significant levels of funding available through the Public Sector Decarbonisation Fund, and it may be appropriate to bring forward any plans for transformation to tackle one of the most energy-intensive parts of a council’s estate. For older buildings that need replacing, it may be necessary to reduce and rationalise the estate in order to fund a new, low-energy facility that will meet the needs of the community for decades to come. This is not without its challenges and political leadership and clear communication with communities will be vital if this route is to be followed.
In these scenarios, councils could consider:
- Carrying out feasibility studies to explore the impact of rationalising their provision and/or upgrading and/or replacing financially unviable and energy inefficient facilities where there is sufficient community demand to support this provision. If you are considering having to remove facilities from your contract(s) and permanently close them, are you are satisfied that there is sufficient alternative provision available within a reasonable travel time, accepting that this may not be possible in every circumstance?
- Working with neighbouring councils to review provision jointly where possible.
- Carefully considering the costs and potential wider implications for physical and mental wellbeing for your local communities and other critical council services, in the event of any closures or reduced opening hours, using any available social value figures such as Moving Communities data.
We would hope that any reduction in overall availability of community leisure facilities is the last resort and only made after the full implications of both the economic and social costs are assessed as well as the economic and social impact on other critical services such as social care, primary care and community safety, social prescribing; and if this is assessed and agreed as critical to the continued provision of the rest of your service for community leisure provision.