C ONCLUSIÓ

The first case study, ‘Sports-One’, is a local leisure centre situated in England that provides sport and leisure opportunities to its surrounding communities. Located within a small District Council, Sports-One was run by a local authority until 2009, when it was outsourced to a medium size non-profit Leisure Trust. At that time, Sports-One had around 70 employees working for the organisation, of which approximately 40% were permanent full-time, 35% were permanent part-time and 25% worked on a ‘casual’ contract basis²⁶. The organisation had a relatively flat organisational structure, with a management team of five and a supervisory team of ten.

26 Legally, casual workers in the leisure industry are defined by having a zero hour contract, working only as and when required by management.

99

5.2.1 OUTSOURCING NARRATIVE

Although Sports-One was outsourced in 2009, the prospect of outsourcing had been considered by the local authority for several years prior to the actual transfer. In the early-1990s, for example, the centre was twice put out to tender to private leisure firms. Yet, owing to the financial stability and reasonable revenue streams of the service, and the lack of political appetite for outsourcing from the then Labour run local authority, the tender processes ended with the local authority deciding to keep the services in-house.

By the mid-late 2000s, however, the landscape encircling public leisure provision was changing, and Sports-One encountered a number of external and internal challenges. Rising energy prices, increased private sector competition, and the pressure on local authorities to reduce spending on leisure, meant the external environment for many public leisure services was becoming increasingly hostile.

For Sports-One, these challenges were particularly rife because of the health and safety concerns it had and the need to renovate the deteriorating building facility. Thus, as a way of responding to these challenges, the local authority decided to seek ‘expressions of interest’ from external companies about the prospect of managing its operations on an outsourcing basis. According to the centre manager, the decision to outsource was “purely about finance” – as the local authority was struck with fiscal challenges, and “externalisation was a way out”. However, it was also noted that “outsourcing options” were regularly considered at the local authority because of Best Value policy directives.

In 2008, therefore, a tender process commenced with approximately twelve firms bidding for the outsourcing contract. The bidders were condensed from twelve to five during the main part of the tender process, which lasted approximately six-seven months, and then to two final bidders. The two final bidders included a private firm and non-profit Leisure Trust. In the end, the local authority decided to outsource the leisure management contract to the non-profit Leisure Trust, which was apparently seen as a ‘surprise choice’ given the notable experience from the other private firm.

Nonetheless, the Leisure Trust won the contract and took on the management of the full range of

100 leisure services for a period of ten years. This happened in 2009, several months after the agreement was signed.

Throughout much of the transfer process, the relationship between the local authority, the Leisure Trust managers and the leisure centre managers was generally reported to be positive. Although the Leisure Trust head office was located in another part of England, there was widespread information sharing and a collaborative approach to objective setting within the outsourcing contract specifications. The local authority, for example, was keen for the facility to be refurbished, and also requested performance benchmarks to be set around targeting under-represented and minority user groups. The Leisure Trust agreed to provide both of these things, but was eager to ensure it was guaranteed enough funding to ‘justify the investment’ over the ten year contract duration. The local authority agreed and reportedly offered a ‘fair financial deal’. Hence, at that time, the managers at the local authority and the Leisure Trust were pleased with the negotiated outcome of the contract and looked forward to a ‘collaborative’ relationship in the future.

After the legal transfer had taken place, therefore, the new Leisure Trust invested £1m into a large-scale refurbishment of the leisure centre – a particularly large investment for this type of service.

The refurbishment involved the complete renovation of the fitness suite, the restaurant, the crèche and conference facilities, as well as the partial refurbishments of the pool and administration areas.

The majority of the renovations lasted about five months, and started four months after the formal outsourcing contract commenced. Although this caused disruptions during this period, particularly for staff and customers, most parties acknowledged it was worth it in the end, as the quality of the facility and the service ‘markedly improved’, as did user and membership numbers.

Thus, at the end of the first year of the contract, the financial reports gave for a positive read.

The membership base had increased by 400%. The non-member usage had “increased substantially”, including increases in under-represented ‘target groups’. The Leisure Trust in-house profit target was surpassed by £0.5m. And there was unanimous agreement amongst managers that the quality of facilities had improved dramatically – something I myself can also testify to having seen it before and

101 after. Although there had been tensions between the centre manager and the Leisure Trust senior managers over decision-making processes during the refurbishment, the strategic-business side of the organisation was also reported to be working fairly well at the end of the first year, with minimal contact from the local authority.

The figure below offers a brief timeline of events of the outsourcing process at Sports-One.

Conflicts of Interest

5.2.2 EMPLOYEE RELATIONS BACKGROUND

Before the outsourcing agenda emerged in 2008 there was a reportedly amicable and cooperative approach to labour relations at Sports-One. The local authority essentially left the leisure centre manager to operate the leisure services as an autonomous organisation, with the centre managed in a somewhat removed way from other local authority services. Rarely did the local authority intervene in leisure services decision making before 2008, and this gave the centre manager a strong feeling of independence, but also responsibility, as to how employment relations were managed. According to most participants, the centre manager was considered to a democratic manager, regularly consulting and involving employees, particularly when there were organisational changes taking place that affected staff.

In terms of a union presence, it was apparent that there had not been much involvement prior to the decision to outsource the service. Indeed, there was only one union representative and reportedly just six other workers who were active union members, a proportion of only 10% of the workforce. In general, the centre manager was seen to be supportive of a union presence by the union members,

102 although he did mention that ‘having the unions breathing down our necks’ was not something he wanted during the outsourcing process. Despite this, after the local authority decided to initiate a tender process, the unions were invited to take an interest in the outsourcing plans, and platforms for

‘information-sharing’ were available with leisure centre employees through meetings.

In general, the tender process and broader build up to the outsourcing transfer did not result in much involvement with the unions aside from occasional meetings. There was a slight increase in membership, with several workers joining the unions after the second round of the tender process.

This was in part due to employees’ concerns that one of the two final bidders (the private firm) had a

‘notorious reputation for staff cuts’, which made employees anxious about their personal futures at that time. However, when it was announced that the Leisure Trust was the preferred bidder, and that there would be no redundancies, this quelled anxiety amongst staff. It was at this time that employees also had meetings with the local authority HR representatives to be told that all permanent full-time and part-time (although not casual) workers would be granted full TUPE protection, which also included pension protection. Although most participants did not seem to know much about TUPE protection, some workers perceived the legal cover was put in place for the duration of one year.

In terms of the transition itself, the transfer from local authority to the Leisure Trust progressed without much tension in employee relations. Once the guarantees were in place around terms and conditions, most employees were generally ‘okay’ or ‘optimistic’ about the outsourcing changes.

They were often unsure about what the future would hold in practice, but generally believed the future would be optimistic for them and the service – particularly with the investment coming in. Although the ‘reality’ of the first year with the Leisure Trust brought many changes that affected the employment relationship in positive and negative ways (which are detailed in the forthcoming chapters), one point to flag up here is that casual workers were reported to receive a pay reduction to their hourly rate soon after the Leisure Trust took over. Although this did not have much impact on the formal employee relations climate, it was reported that those workers felt the changes were unfair and unjustified; mainly because of the ‘two-tier’ pay framework it created – i.e. whereby staff on former local authority contracts were on different rates to those on leisure Trust contracts.

103