The five volume contract between Sports and Leisure Management Limited and Cambridge City Council.

Sports and Leisure Management Limited (SLM) currently has a contract with Cambridge City Council under which it runs:

• Parkside Pools
• The Abbey Pools, including the floodlit pitches
• The King’s Hedges Learner Pool
• The Jesus Green Pool
• The city’s six paddling pools (in various parks and recreation grounds)
• Cherry Hinton Village Centre
• The city’s grass sports pitches

The city council owns all these facilities. One might expect that the company running them would pay rent to the city for the rights to generate income from these substantial publicly funded assets. In fact though money flows in the opposite direction and the city pays SLM a “management fee” which as of March 2010 was £47,681.93 per month. This had increased from the £44,977.11 per month which was paid in 2009. Overall in the financial year 2009-10 the council paid SLM £551,554.32 in management fees. Those are all ex.VAT figures. SLM will have taken around £5m of public money from Cambridge City Council during the period of the contract which was signed in 2003 and presumably similar arrangements will have been repeated in many cities around the country where SLM runs publicly owned leisure facilities.

These amounts and the detail of SLM contract itsself have previously been kept secret by the Liberal Democrats running Cambridge City Council. I was able to obtain access when I visited the council during the open period for Cambridge City Council’s accounts which ran from the 7th of July to the 3rd of August this year. Last year I similarly requested such access during the open period but my request was refused. A freedom of information request I made for the contract resulted in only a small section being released in which the part on the management fee was redacted. The council omitted to mention the fact what they released in redacted form was far from the whole contract. Whenever the SLM contract has been discussed at council meetings the press and public have been sent out as councillors have decided to hold their debates in a closed session.

I do not know what has changed between this year and last. There are a number of things which may have influenced the council’s u-turn:

• The SLM contract is coming to an end in 2013; the council may have decided transparency is in the public interest and will enable them to get a better deal on behalf of the public when they seek to negotiate a new contract. (This is unlikely though as they have not proactively published the material on their own website)
• The council may have realised their previous stance on secrecy was contrary to their responsibilities under the Audit Commission Act 1998. They may have been influenced by judgement in the Veolia case where Nottinghamshire County Council were ordered to release their waste management contract after denying access to it to one of their electors who asked to inspect it. (Article by Julian Todd with more background.)
• I have publicised the fact I was denied access to the SLM contract, have lobbied councillors and mentioned it when using the public speaking opportunity at council meetings. This may have helped prompt the council to reverse their position though it is, as is often the case, difficult to categorically link cause and effect when what you are lobbying for actually happens.
• There has been public outcry, and political interest, in the way SLM are managing both the Swimming Pools (where there have been complaints about maintenance, cleanliness and water temperature) and the Cherry Hinton Village Centre where a local group has been unable to maintain its established booking.

The Contract

The contract was presented to me in a large legal archive box. The main body of the document was presented in five hefty bound volumes, a number of which were many inches thick. Along with the bound volumes there were a number of associated additional papers.

I think the weight of the document in itself highlights one of the main problems with this contract, and with a lot of public sector outsourcing in general. The contract is so prescriptive and the council maintains so much detailed control over the management of the facilities that in many respects the private company may as well not be involved at all. What we have is an odd half-way position between running the facilities in-house and fully privatising them. The existence of such complex arrangements probably explain why a company like SLM (and many others like it) can exist specialising running in public sector services. Private companies with the expertise to run leisure facilities without public subsidy would probably quite understandably run a mile when presented with the mass of a council’s requirements. (We’re talking here only about running the facilities, not about the saving up to make a capital investment in building new pools or paying off loans taken out for such major work. I believe building new publicly accessible leisure facilities like swimming pools is a reasonable way to spend public money, and I also approve of subsidies for some users. )

Under the current arrangements we lose the potential benefits of democratic control – one thing the SLM contract does is ensure the Liberal Democrats running Cambridge City Council are able to deny responsibility when services are unacceptable. As the arrangements are a half-way house fudge we don’t fully benefit from the potential cost savings, and matching of services to what people want to pay for, which operating in a less regulated commercial environment could offer.

Protected Bookings

An interesting element of the contract states:

The facilities have a number of clubs and club activities that will need to be continued under the new arrangement. The details are contained in appendix 17b. The provision needs to be at least the same as at present. Variations will only be permissible following consultation and agreement with the club and the Council.

The relevant appendix 17 (there were many within the five volumes!) included the “Friends with Disabilities” group who have been having trouble booking Cherry Hinton Village Centre. They are listed as having a booking of the large meeting room in the centre on the second Tuesday of every month. Their representatives were still complaining about their treatment at the East Area Committee on the 19th of August; councillors were specifically asked if when they recently extended the SLM contract they had sought to deal with the problems faced by “Friends with Disabilities”. Councillors responded only to say they would have to wait for the contract to be re-negiotated/re-awarded for the matter to be resolved (suggesting it was not dealt with during the extension).

The SLM contract was due to expire, but councillors have decided to extend it another year to 2013. I did make a request for the part of the contract referring to that extension but it was not disclosed to me. The council denied me permission to inspect the extension/variation documentation under the provisions of the Audit Commission Act this year on the grounds no payments were made under that element of the contract.

Further Notes on Content

The SLM contract is generally very favourable to SLM; with the council taking responsibility for the maintenance of items one would not necessarily consider part of the fabric of the building. For example the Omega timing system at Parkside pools is maintained at the council’s expense despite income from the hire of the pool for competitive swimming going to SLM.

City Council staff get free swimming under the contract; (this wasn’t a secret) but the city still has to pay for other usage of its own facilities for example room hire on polling days.

The contract contains details of salaries/wages, home addresses, bank details, national insurance numbers etc. for all staff involved in the provision of Leisure Services at the council at the point of transfer of responsibilities to SLM. It includes those details for individuals who are now relatively senior council officers right down to those who were casually employed lifeguards.

Payments were made to SLM in relation to free swimming for those aged over sixty. The amount paid during 2009/10 was £7,318.89.

Something I did not locate was any reference to business rates. Contract negotiations with SLM in Spelthorne reveal a 90% business rate reduction on their swimming pools. While I have obtained lists of money coming into the council and going out related to SLM there is no mention of anything relating to rates. The Spelthorne document also reveals the way SLM operates: demanding public investment in upgrading facilities before councils hand the improved facilities over to the company for them to make a profit from.

Personal Legal Risk in Publishing This

Running a website like mine is fraught with potential legal risks. In publishing the information I obtained from the council when I visited to inspect the accounts I am publishing material which I have been made aware SLM considers “commercially sensitive information”. That fact was conveyed to me in July 2009, shortly after the council refused to let me see the SLM contract or know how much the management fee was.

As I understand the position the fact material might be “commercially sensitive” is not really relevant from a legal perspective. I am after all free to publish all sorts of information which might, even quite seriously, damage someone’s commercial interests. (eg. a restaurant review; a price comparison website, etc.)

I do not believe though that currently I have any duty of confidentially with respect to the information I have published. I personally have no contract with SLM under which I am bound to keep their secrets. It appears Cambridge City Council have are not contractually bound to keep the management fee a secret either, as if they were they would have applied the S.41 “Information provided in confidence” exemption in their response to my FOI request.

I am sure I have not breached any confidence by publishing this material; if I become aware of the confidential character of the information at any point in the future I will of course immediately cease to publish any confidential information.

While I am in favour of openness I don’t simply publish material because I can. I think it is in the public interest for the management fee, and information about the contract to be openly available. For example knowing what SLM currently charge might help another organisation come in and offer to undercut them so we could save public money. Knowing details of the contract might help those not obtaining a satisfactory service from SLM go to their councillors and lobby them to get the council to ensure SLM do what they have agreed to.

See Also

• Data obtained when inspecting the City Council accounts during the open period (Excel files):
  • SLM Contract Management Fee Transactions
  • SLM Payables Transactions
  • SLM Recievables Transctions
• Report on my 2009 visit to view the Cambridge City Council accounts.
• My FOI request for the SLM contract
• The Future Management of Cambridge’s Swimming Pools – January 2009 Article
• Locals Priced Out of Cherry Hinton Village Centre