HISTORY OF LOCAL AUTHORITY LEISURE CONTRACTS AND CURRENT PROVISION
In this chapter the following will be considered:
the Beginnings of local authority leisure;
compulsory Competitive Tendering and the Development of the local authority trust;
the Legacy of the Past and the Current Marketplace
The Beginnings of Local Authority Leisure Facilities
Publicly funded and delivered sport and leisure services are nearly 200 years old. Legislative and charitable initiatives were developed from the latter part of the nineteenth century to address health issues, poverty and poor social conditions for example by the Baths and Washhouses Act 1846 and later legislation introducing initiatives to enable poorer people to bathe and later to swim. The Public Health Act 1875, Open Spaces Act 2006 and Public Health Act 1936 which allowed local authorities to provide baths, bathing spaces and washhouses are all still partly in force. Between them these acts developed the concepts that health, cleanliness and exercise are good for people acknowledging that many people did not have any access in their homes to bathing facilities. Initiatives to add parks and open spaces as areas for public walks and healthy outdoor games, enabling land to be taken into public ownership and maintained by local government for the benefit of the community were encouraged. Current legislation regulating local authority leisure and disposal powers have their history in these and later acts of parliament, the Physical Training and Recreation Act 1937 and Local Government Act 1938. A number of existing leisure centres and facilities are wholly or partly on sites which came into public ownership in the nineteenth and early twentieth century and/or are built on public open space land. There are even some existing historic nineteenth (?) century buildings still used as leisure centres.
In parallel with the growth of public sector leisure and recreation there was a philanthropic growth in donations of land or charitable funds which funded the purchase of recreational land for open air activities or the building of leisure centres. Some of this recreational land has since come into local authority ownership often without a revenue endowment to support management.
The Education Acts of 1918 and 1944 included the provision of facilities for sport and recreation by local government, made mandatory in 1944 and currently swimming and water safety are part of the national curriculum for primary school children in both England and Wales. In the nineteen sixties government funding and initiatives meant the building of dual use facilities (built on education land but also used by the community) and joint use facilities (possibly built on school land but funded by both education and leisure authorities). Schools and the local authorities responsible for recreation and leisure shared responsibility for maintaining and providing these dual or join use facilities with use for the community outside school hours.
Whilst these arrangements ought to have been reflected in a formal dual use agreement with transparent identification of the respective times of use, cost allocation and relationship with a management body in place in practice, this is not always the case. Any formal written documents are usually out of date, ignored in part or in whole with relationships on the ground depending on the personalities involved. Many of these facilities remain today. Recent tensions around health and safety and safeguarding because of access for the public from within a school site and/or shared changing facilities has created difficulty and when schools are re-built there is separation.
As part of the schools re-building programmes within the private finance initiative (“PFI”) or other government initiatives many schools have included modern fully leisure facilities including water. These may or may not be managed by the PFI contractor, procured separately by the school or relevant local authority, e.g. as part of a wider leisure contract or managed directly by the school with limited community access.
In parallel with this was legislation setting up national parks and areas of outstanding natural beauty under the National Parks and Access to the Countryside Act 1949 as amended by various other legislation, importantly the Countryside and Rights of Way Act 2000. These are outside the scope and purpose of this book.
The development of local authority libraries, museums and culture. is somewhat different to that for recreation. Whilst created by Acts of Parliament these early institutions were not part of the developing local authorities.
The history of public libraries commenced in the mid19th century and is based on the Victorian desire to improve the public, this time through education. The Public Libraries Act 1850 was the first Act. This was succeeded by other legislation, the latest being the Public Libraries and Museums Act 1964 which is still in force and set out the current duties for the provision of libraries by local authorities and power to provide museums.
Free museums and art galleries have been set up by Act of Parliament since the 18th century, such as the Act which created the British Museum and 19th century Act creating ‘Albertopolis’, the area in South Kensington London which created the Royal Albert Hall and museums. However, these created specific philanthropic and other trusts and are now run by charitable trusts. Local authorities are not responsible for these major national museums and art galleries.
Theatres have been commercial ventures in the UK for many centuries, for example the Globe and Theatre Royal Drury Lane in London. Local authorities do not own the majority of theatres.
Charitable and community ownership and management and community asset transfer
In addition to ownership of leisure centres, some theatres and cultural buildings and museums by local authorities there are a number of facilities (some smaller leisure centres, theatres, community centres or other) which are and have always been owned by local independent charitable trusts. These will have been funded and built out of donations not provided by the public sector. There are also a number of similar organisations which have been transferred from local authority ownership to a local community trust via an asset transfer on a long-term lease or even freehold. In some areas, these are an important local facility though they are not to be compared to the national organisations mentioned in the previous section.
They are mentioned here because whilst not examples of local authority owned services which are subject to procured relationships, they may be grant funded by a local authority or managed by a private sector contractor on behalf of the trust owner. They are part of an area’s leisure and culture offering. These may or may not have a robust governance model for example because they do not have sufficient revenue to continue to maintain the buildings and provide services and/or they have difficulty achieving sufficient trustees.
Compulsory Competitive Tendering, its Implications and the Development of the Local Authority Leisure Trust
This section considers the impact of compulsory competitive tendering on the development of leisure procurement and the leisure trust.
The most important initiative which is relevant to this market was introduced by the Local Government Act 1988, was compulsory competitive tendering (“CCT”). Grounds maintenance including of parks and open spaces was included in the first wave of competition, leisure centres were part of a second wave requirement to be delivered by the end of 1992. Dual and joint use facilities, arts, culture and libraries were excluded.
CCT required local authorities to carry out an open market competitive process for in-scope services. A flourishing private sector grew up to bid for contracts for ground maintenance for parks and open spaces and to run leisure centres. These are the basis of the current private sector market.
Early contracts tended to be input based, prescriptive and designed to give the in-house services the best opportunity of ‘winning’. Many local authorities did not support CCT and did not want to submit their services to competition.
Local authorities who did not support CCT looked at alternatives. One popular alternative was a local authority created philanthropic or wholly charitable trust. These models initiated the first wave of local authority led externalisation. These trusts could access non-domestic rate relief and could possibly be VAT efficient (See chapter 11.for taxation implications). The model was a transfer of leisure services by a specific local authority to a newly created local leisure trust with trustees from the local area including some local authority members, without any competition. The expectation was that savings would accrue because of more favourable taxation treatment for non-domestic rates and the trust would develop and grow. The precise services which were transferred would depend on the in-house services being delivered and the appetite for externalisation. The trust could be very small responsible for only one or two leisure centres or bigger with more centres plus a theatre or arts venue, sports development and other services with the first transfer of a wide range of services from the London Borough of Hounslow in 1998 (leisure centres, arts, museums, open spaces and libraries). Governance would either be an industrial and provident society (now a registered society) or a company limited by guarantee and charitable status might or might not be obtained initially. The trust would take a transfer of all local authority staff including the top management. Thereafter it delivered the ex-local authority leisure services via a single lease or a lease of each facility at a peppercorn, a funding agreement which could be called a grant agreement and possibly a contract for some services. The length of the lease(s) and agreement varied from 7 or so years with up to twenty years or even longer for the lease and potentially a funding or grant agreement notionally of the same length.
Whilst CCT was abolished in 1999 and replaced by best value via the Local Government Act 1999, the multi-model marketplace was in existence by then consisting of private sector organisations who won CCT contracts and trusts. An increasing number of local authorities realised the benefits of a better value for money externalised model for the delivery of these primarily discretionary services, services which whilst not a statutory duty were and are very highly valued by the authority’s community and are a core part of the government’s health and wellbeing agenda.
The history demonstrates that local authority delivered or commissioned leisure and culture has a long and important history, a history which is still directly relevant to this day. The law which applies today is based on a line of legislation and cases, in some instances, going back to the nineteenth century.
It also assists in explaining the development of what is now a complex multi-model marketplace.