Case study

Greenwich Leisure Limited

Background

In July 1993 Greenwich Council faced rate capping for the ninth consecutive year. As a result, cuts totalling £5,000,000 were proposed and leisure, as a discretionary service, was earmarked for annual expenditure reduction of £400,000. The result of this would have been the closure of 2.5 centres (out of seven) and the resulting job losses.

In order to avoid cuts to the leisure centre services, on the initial instigation of the Chair of Leisure Committee, the staff of Greenwich DSO (Greenwich Leisure Management) worked with the Greenwich Co-operative Development Agency to find an alternative solution.

The process

The Chair of Leisure Committee's political commitment to the continuation of the service was crucial as was the Leisure Directorate's recognition of the opportunity to maintain the service level through externalisation.

The main features of the process were:

• Committee agreement to investigate option
• Feasibility study
• Initial staff consultation
• Trade Union consultation
• Committee agreement in principle
• Detailed Proposal including Business Plan
• Staff and management skills analysis
• Comprehensive staff consultation
• Indicative balloting of staff
• Agreement with Trade Unions
• Detailed Committee agreement to go ahead
• Secret ballot of all staff
• Staff and management training programmes
• Legal structure in place
• Contractual arrangements in place
• Management of seamless transfer
• The staff were persuaded of the viability of the proposal through:
• consultations with Trade Unions,
• a staff education and training programme (provided by Greenwich CDA)
• working parties at the leisure centres to ensure the all staff were consulted
• newsletters and team meetings.

The new company was legally constituted as a not-for-profit Industrial and Provident Society, Society for the benefit if the community, (with charitable aims). The Industrial and Provident Society solution also attracted discretionary rate relief of £400,000 annually. The result was that all the centres remained open and all staff retained their jobs.

The Society is managed by an annually elected Board comprising of 11 elected employees, two elected customers, three Councillors (co-opted) and a Trade Union representative. The managing director is ex officio and is charged with carrying out policy decisions made by the Board.

The whole process had to be completed in six months due to funding restrictions (January to June 1993).

The raising of the finance

A share issue of one share per employee at £25 per share was used to raise the money needed for the legal registration of Greenwich Leisure. The local authority leased the leisure centres to the company for a peppercorn rent for a period of 7 years. The discretionary rate relief of £400,000 and additional efficiency savings resulted in Greenwich Leisure Limited being able to meet the local authority budget cuts requirements.

After the conversion

Greenwich Leisure Limited has become a successful leisure service delivery and management organisation. It has, for the fifth year running, reduced the cost of the service to the Council while increasing income and concessionary access.

Two additional centres have been added to the management portfolio.

Greenwich Leisure Limited are working in partnership with local sporting organisations and the local authority to develop a multi-agency network for sports excellence, participation and education. This is part of a £980,000 project funded through the Single Regeneration Budget.

There are now six local authorities across the country using this successful employee ownership model for the delivery of their leisure centre services.