Contractual Relief Payments to the Councils Leisure Provider: Reference D11/21
Decision Maker: Cllr Sam Chapman-Allen, Leader of the Council
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
To address a request for financial assistance from the Council’s leisure services provider Breckland Leisure Limited.
1) That contractual relief provided under the contract for the qualifying change in law is continued for the period 1st July 20 to 31st March 21.
2) That the normal monthly unitary charge will continue to be paid in full, as required by the contract.
3) That the Council offers, under the contract, to make an additional payment to the contractor for a sum of £355,859 for the period 1st July 20 to 31st January 21. The Council will receive a credit of £17,927 for the period 1st April 20 to 30th June 20 from the contractor, due to the agreed change in methodology.
4) The contractor’s forecast losses for February 21 and March 21 total £50,584. Before payments for any actual losses incurred for the periods February 21 and March 21 are agreed, the project team will scrutinise these figures to ensure they comply with the methodology agreed with the contractor and authority is given to pay up to £50,584 for February 21 and March 21.
5) That the offer be subject to the following terms and conditions along with any other terms advised by the Council’s lawyers:
a) The monthly review and reconciliation of invoices shall continue, with the Council being able to terminate the payments/waiver of income at such time as it determines at its absolute discretion.
b) That payments continue to be subject to full transparency/open book accounting on the Contractor’s part.
Reasons for the decision:
1) As a result of the Covid-19 crisis and the Coronavirus Act 2020, the contractor and the Council’s Solicitor have confirmed that the enforced closure periods for the leisure centres and the operational restrictions that have been applied, constitute a qualifying change in law under the contract. As a result, the Council is required to continue to make a monthly relief payment to the contractor.
2) In order to safeguard the contractor’s position, and the longer-term delivery of the contract and leisure services, the decision cannot reasonably be deferred.
3) A project team has been formed to scrutinise the losses submitted by the contractor and comprises representatives from several departments, including both Finance and Legal Services. Having confirmed that the figures are reasonable and subject to open book accounting, an urgent decision is now required to process payment.
4) The Council’s application to the National Leisure Recovery Fund was successful and the Council received £300,000 to support the reopening of leisure facilities. This funding can be used for the period 1st December 20 to 31st March 21 and can be used to pay for utilities, staffing costs (non-furloughed staff), essential asset maintenance and security. This will therefore mitigate the financial impact on the Council’s budget for these areas of cost during this period.
Alternative options considered:
· To grant contractual relief payments.
· Not to grant contractual relief payments.
Publication date: 01/03/2021
Date of decision: 01/03/2021
Effective from: 09/03/2021