‘Recovery Planning – Key Considerations for Public Leisure Services’ exploring affordability – key challenges and opportunities
11 June 2020
The Sport, Leisure and Culture Consultancy (SLC) facilitated an online Think Tank – Recovery Planning – Key Considerations for Public Leisure Services’ exploring affordability – key challenges and opportunities for Local Authority Clients, Sector Stakeholders and Public Sector Leisure Operating Partners on 11 June 2020 from 3pm-4.30pm.
Facilitation was provided by Duncan Wood-Allum, Founder and Managing Director at SLC, supported by Judith Schrenk, SLC Research Consultant.
- Dave Candler (STA, CEO)
- Michael Shepherd (Slough Borough Council, Leisure Development and Client Manager)
- Julie Lewis (Stratford on Avon District Council, Head of Community & Operational Services)
- Guy Fishbourne (Bristol City Council, Sport & Physical Activity Development Manager)
- Lisa Bows (Sheffield City Council, Resources Manager)
- Ann Hill (Warwick District Council, Sports and Leisure Contracts Officer)
- Carl Bennett (Gedling Borough Council, Head of Service – Leisure Transformation)
- Andrew Wilesmith (Ipswich Borough Council, Operations Manager Sport and Leisure)
- Daniel Bradbury (Serco, Head of Business Development)
- Jamie Fenton (Peterborough City Council, Culture and Leisure Development Manager)
- Mike Worsnop (Parkwood Leisure, Business Development Director)
- Peter Davis (Shropshire Council, Leisure Services Manager)
- Martyn Allison (Leisure Management Solutions)
- Mark Heazle (South Norfolk Council, Leisure Business Development Manager)
- Andrew Pearson(Sport England, Capital Investment Manager)
- Gemma Ryan (Sandwell Council, Business Manager – Sport & Leisure)
- Liz Slater (Plymouth City Council, Leisure Partnerships Manager)
- Toby Kingsbury (Director SLC)
Key themes explored in the session were:
- What are the likely additional costs Councils will need to bear in order to reopen their leisure facilities?
- What options are being explored by Councils and their Leisure Operating Partners to help limit these costs?
- Will Councils be able to afford to re-open all of their facilities at once following easing of lockdown measures?
- What are elected Members’ expectations regarding re-opening of facilities and the recovery phase, and do they understand the likely costs?
- How should Councils and their Leisure Operating Partners prioritise which facilities, or parts of facilities, to re-open?
- What are the potential medium and longer-term implications for leisure facility portfolios?
- What impact will change to the Government’s Job Protection Scheme have on Leisure Partnerships?
- What are Leisure Operating Partners doing to respond to significantly diminished income levels during the recovery phase?
- Within such a financially driven context, how can the needs of the most vulnerable groups be met through the recovery phase?
Is the focus now on recovery or are some Councils still struggling with the lockdown costs? What are Leisure Operating Partners doing to respond to significantly diminished income levels during the recovery phase?
Councils and Leisure Operating Partners have worked together over the past two months to agree lockdown costs and begin to establish recovery costs. This is particularly challenging where Leisure Operating Partners have previously paid the Council a positive management fee, as Councils not only have to underwrite loss of income on the Leisure Operating Partner’s side but are also missing major income streams. The financial support needed to be underwritten is substantial and Councils are struggling to fund this. Many Councils will have to draw on their reserves to bridge this gap but the question remains – how much and how long will support be needed?
It is key to have an open conversation with the Leisure Operating Partners and identify realistic and affordable options for recovery linked to the new PPN Guidance (PPN 04/20). This can help identify an affordable offer for the recovery period that seeks to address inequalities and aligns with the Council’s strategic priorities.
Leisure Operating Partners have adopted a range of approaches to prepare for reopening. They are largely planning a phased reopening with dryside activities first and swimming later, pending advice from Swim England (due 15 June). Fast-changing regulations and social distancing requirements make it hard for Leisure Operating Partners to plan staffing and customer levels for any particular phase.
What options are being explored by Councils and their Leisure Operating Partners to help limit costs?
Most Leisure Operating Partners and Councils are now looking at the feasibility and associated costs of reopening of their leisure facilities post lockdown with the added pressure of potentially a 4 July opening date from government. This is largely done by scenario planning with Leisure Operating Partners producing different scenarios for reopening requested by their Council. These scenarios include continued closure of facilities or partial re-opening of more commercially viable activities.
It was agreed that identifying a few realistic and affordable scenarios for the Leisure Operating Partners to provide the Council with can help find a robust solution that delivers a service tailored to local needs and keeps both partners on board. It can be challenging for Leisure Operating Partners to provide the Council with a large number of scenarios, so SLC has suggested exploring a short list and often a consultant can provide support to refine this if the Leisure Operating Partner is not in a position to do this or within the timeframes required.
It will be important to see this as a collaborative approach between the partners. This should be done on the basis of an open-book approach which creates trust and transparency. Any unclear costs will result in delays in securing agreement and funding. Some Leisure Operating Partners in the meeting did highlight the urgent need for prompt payment on agreed sums based on the PPN guidance.
Councils and their Leisure Operating Partners are working extremely hard to retain leisure services throughout the country. Nevertheless, the financial gap caused by closure of facilities leaves local authorities in an unprecedented, enormously challenging situation.
It was agreed more funding is urgently needed from Central Government to help the sector recover and ‘plug the financial gap’ to help local authorities find and fund a way forward. Even though sector bodies such as Sport England and UK Active are fighting hard for the sector, recent government messaging made it seem like there is little willingness to make more funds available. This may be unlikely to change until the spending review in Autumn 2020. If government funding was made available, it seems likely that it would not be sufficient to plug the whole financial gap in the sector but could protect a number of vital community services from being decimated.
Will Councils be able to afford to re-open all of their facilities at once following easing of lockdown measures?
Highly unlikely. Councils and Leisure Operating Partners are collaborating to find sustainable ways to reopen leisure facilities to the public. It seems unlikely that Councils will be able to afford the opening of their whole leisure portfolios or at least in the same way as before Covid. Social distancing measures can make it impossible for certain facility types to be financially viable and the advice on these measures is fast-changing and can be hard to follow and implement for Leisure Operating Partners.
The sector’s preparation for reopening of facilities has been supported by customer surveys undertaken by a number of stakeholders, such as Parkwood Leisure’s recent survey on customer opinions. Customer behaviours and opinions will have changed significantly throughout this crisis. The reopening of facilities has to be done in a way to make customers feel safe when returning to their leisure centres, as their attitudes will determine the success and financial viability of reopening.
What are Members’ expectations regarding re-opening of facilities in the recovery phase and do they understand the likely costs?
Many Council officers have largely taken their elected members on the journey of recovery planning and presenting them with various scenarios including full reopening, phased reopening, partial reopening including rationalisation, mothballing and divestment. This makes the provision of robust and realistic forecasts and scenarios by Leisure Operating Partners crucially important, so Councils can test the viability with their elected Members. Generally, elected Members will be interested in mitigating costs, as Councils need to ensure their own survival. It was strongly suggested for Councils to only request options from Leisure Operating Partners that stand a chance of being accepted by members and affordable. There is a balance to be found in mitigating costs and political acceptability and viability of scenarios.
It is likely that Leisure Operating Partners will need support from their Council partners throughout the next financial year and into 2021/22. This highlights the issues of some Councils expecting repayment of short-medium term financial support – which in some cases could be unrealistic. This will be easier to manage in longer contracts, as there may be sufficient time for the Leisure Operating Partners to recover, but it remains questionable whether there would be sufficient margin to support repayment of support via loans. For contracts where there has not been a profit share agreement, the establishment of shared positive revenue, once income levels are back up to pre-Covid-19 levels, could be explored.
There will be challenges in communicating the level of support the leisure sector needs to elected Members compared to the other challenges they are facing. It was agreed that elected Members are unlikely to prioritise leisure over statutory services and will be sceptical towards supporting leisure due to the uncertainty.
It was highlighted that the need for leadership at officer level had never been more critical in positioning leisure as part of a wider response to recovery and renewal, not a service that needs bailing out.
What are the potential medium and longer-term implications for leisure facility portfolios?
It was agreed that the appetite for risk-transfer in the leisure sector will change as a result of this crisis. Risk-share between Leisure Operating Partners and their Council partners will be an inevitable result of this and may even determine future procurement processes. The sector is at a tipping point, where a much more collaborative approach is the only way forward for the foreseeable future.
Customer demand and behaviour will have changed significantly as a result of this crisis. This demands creative solutions and modern leisure and wellbeing offers – recovery is not simply about reopening leisure centres the way they used to operate. One blended lower risk solution could be not reopening all facilities within a portfolio immediately, but rather offering community outreach work and outdoor offers to take advantage of the summer months and provide programmes for targeted groups. Looking ahead, the traditional leisure centre led service mix was very much uncertain and Councils will need to carefully consider their role in leisure provision and wellbeing in the future once the immediate crisis has been addressed.
It was observed there was a lack of capacity and creativity in developing solutions. Many Leisure Operating Partners were understandably focusing on reopening their assets only along with a blended digital offer. This was at the expense of not giving time to developing more community-based interventions which could secure political support and de-risk a mass opening in July.
Is there an opportunity to increase the perceived social value of leisure so Councils can justify financial support?
The Covid-19 crisis presents the sector with an unprecedented opportunity to promote investing in the social value of sport and physical activity to offset the immediate financial crisis and perceived ‘cost’ of bailing out services. A powerful conversation of the sector’s role in wider public health has grown out of the lockdown period – led by thinking from Martyn Allison. This can be used to emphasize the value of leisure in supporting public health, place making and addressing inequalities. Cooperating with health partners, adult social care etc, can promote wider outcomes and increase political willingness to invest in leisure as a sector – but developing new relationships in the current crisis will be very difficult. Supporting economic, social and community recovery will be high on the political priority list. If leisure can play a core role in that, it has a chance for renewal of purpose and survival.
What will the reopening and recovery of aquatics look like?
Different stakeholders in the aquatics world, such as Leisure-Net Solutions, Swim England and STA, have been working on a strategy to safely reopen swimming pools to the public. According to an ongoing survey that the Swimming Teachers Association (STA) is undertaking, the majority of former customers do want to go back to swimming lessons. Half of the respondents to this date would return to their local facilities immediately if they reopened in July, with the other half not willing to return before September. A cautious approach to reopening pools linked to issues of sustainability will result in a number staying closed for the foreseeable future.
SLC would like to thank all Think Tank participants for investing their time and providing insight and suggestions on how our sector can work through these difficult times.
To view a recording of the session, please email email@example.com and you will be sent a link which will be available for the next 5 days.