Achieving financial efficiences

The context

Oldham has become a co-operative council, a commissioner of service delivery and an enabler. This requires deeper partnerships with health, the private sector and schools, as well as greater efficiency and value for money from those partnerships and contracts.

The leisure contract, operated by a Leisure Trust, was due to expire in March 2013. As a consequence the council took the opportunity to undertake an independent review of its leisure services during winter 2010/11. This considered the current provision across all sectors and provided a clear evidence base and supply and demand analysis, which supported the council’s need to reconfigure the leisure estate in Oldham in order to both reduce the revenue burden on the council and improve the leisure offer to the public.

The review recommended that a leisure estate of fewer, high quality public sector facilities well distributed across the borough, with a town centre facility at its heart, alongside private and voluntary sector provision, would be a realistic way forward for the borough.

 casestudy-oldham

The approach

Oldham undertook a strategic review of its indoor leisure stock which informed a rationalisation, re-investment into facilities and re-procurement exercise. Sport England’s Facilities Planning Model data was used to contribute to a business case and financial appraisal which proposed the replacement of Oldham’s ageing town centre facility and two neighbourhood leisure centres with one wet and dry facility at Royton. Both proposals are due to obtain planning consent in 2014 with builds complete in September 2015.

The review established the need to:

  • Conduct a competitive re-procurement exercise of its Leisure Contract
  • Clearly define the Oldham leisure estate to be included in procurement/management arrangements
  • Maximise the use and availability to the community of sports facilities in BSF/Academy and PFI schools, including during the day
  • Reduce the size of the estate
  • Increase cost efficiency, increasing income and bearing down on central and staff costs within the operating model
  • Remodel/reconfigure loss-making facilities in Glodwick, Royton and Crompton and the town centre
  • Use revenue savings and capital receipts generated from closures and other potential transfers to fund the provision of two new high quality replacement facilities, in the Royton/Crompton area and the Town Centre of Oldham.

Oldham piloted Sport England’s Leisure Procurement toolkit and used the emerging guidance to re-let its leisure contract. The procurement exercise resulted in an outcomes-based contract that, alongside Oldham’s more efficient facility stock, will achieve a saving of £1m per year to the authority over the lifetime of the contract.

Outcomes and impact

  • The leisure review developed a robust evidence base. It was followed by an extensive consultation process run between September and November 2011 and business case development and approval. The options for procurement of the new leisure management contract were considered and a competitive, open, transparent process was agreed and conducted, with a contract length of 10-15 years and a break clause at 10 years. All aspects of work undertaken have been reported progressively to the Cabinet and clear decisions have been taken in stages. The decisions have been scrutinised by both the Performance and Value for Money Scrutiny Group and the Overview and Scrutiny Board
  • The overall aim of the reconfiguration of the public leisure facilities in Oldham is to generate efficiencies and improve performance within the re-procured leisure operating contract. The Sport England Procurement Toolkit was utilised throughout the process. A detailed service specification and a reporting performance framework were developed during dialogue. These, alongside the final contract, have proved invaluable. Specialist advice to support the process was procured. This included legal and leisure consultants. As a result the whole process will generate £13m of savings over the 15 years of the new leisure contract. This will be re-invested into its new leisure facilities.

The learning

  • Strong project management is key – we appointed a Project Management Officer to lead this piece of work
  • A dedicated team of people with specific roles and responsibilities was key from the outset – it cannot be done by one person
  • Strong legal support is required throughout the process and in Oldham we used Sport England’s solicitors as recommended in the toolkit – this helped to progress things in an effective manner as the council fully understood the process and what we were trying to achieve
  • It is important to ensure that as a project team you use the tool and bring the local picture to it – the tool is generic by its nature and therefore it is important that the project team brings localism to the process
  • Once the process has been started it is important to have a timeline and ensure momentum is maintained
  • Allow the whole process sufficient time to be done properly and effectively
  • Also recommend that Sport England’s tools are used in the right order – strategy tools/options and affordable models/procurement toolkit/contract toolkit.

Contacts

Neil Consterdine – Head of Youth and Leisure – Oldham MBC

neil.consterdine@oldham.gov.uk