Leaked report reveals dispute between council and leisure provider

Liam Randall – Local Democracy Reporter

A leaked report has revealed a significant deterioration in relations between a council and a company which provides leisure services on its behalf.

Aura Leisure and Libraries Limited has managed most leisure centres in Flintshire since 2017, as well as libraries, museums and play areas.

However, it was reported last month that council officials were considering withdrawing financial support when the local authority’s latest agreement with the employee-owned company was due to end on March 31.

Aura’s chief executive Mike Welch hit out at the situation, claiming in a letter that it had caused “significant stress” to the charitable organisation’s 250-plus staff.

It was later announced that the two parties had agreed a short-term funding deal while the council explored its options.

A new report, which has been seen by the Local Democracy Reporting Service, has now cast doubt on whether the arrangement will continue when it ends in mid-July.

It follows concerns being raised by council officers over the conduct of senior figures at Aura.

Services

The report being presented to members of Flintshire’s cabinet on Wednesday (April 24, 2024) outlines several options for the future running of services, including bringing them back in-house or finding an alternative delivery model.

In the document, Damian Hughes, the authority’s corporate manager for capital and assets, said: “The council has sought to work with Aura on a new longer-term arrangement, but relationships have become strained, particularly around funding, and the terms of any new agreement.

“Significant issues with subsidy control have also been identified and the council needs to undertake further due diligence around a suitable future option.

“Two new short-term, grant funding agreements between the council and Aura have been agreed to allow further time to work through longer-term options.

“The purpose of this report is to provide an overview of the current operating arrangements and an options appraisal for future delivery.”

The report shows Aura has received an average of around £3.8m per year to provide services on the council’s behalf during the last seven financial years.

The company has also been given more than £3.3m in extra funding from the authority and Welsh Government to cope with the impact of Covid-19 and rising energy bills.

Other future options detailed in the report could see the authority going out to tender to find a new service provider or coming to a fresh agreement with Aura.

However, Mr Hughes said continuing to work with the company would be problematic due to new rules surrounding subsidies introduced by the UK Government.

He said: “It is pertinent to note that the recent developments, behaviour of key members of Aura and its board, and the advice in relation to subsidy control has led to council officers having a number of concerns.

“Officers question whether a longer-term grant funding agreement with Aura would be the best contractual model to achieve the desired results.

“This is due to the limited control it affords the council for such significant sums of money being paid out and many aspects that require further and timely agreement with Aura, which history shows have been very difficult to obtain.”

He added: “Aura’s continued stance to refuse reasonable council offers, or seek re-negotiation of everything, is a drain on the council’s resources, is an inefficient use of time, and is not in the spirit of collaborative working.”

The report details how Aura approached the council during 2023/24 after identifying budget pressures of £1.58m, representing a 42 per cent uplift in its funding.

The sum was later revised down to £1.1m after the authority worked with the organisation to identify cost saving measures.

‘Best option’

Aura has defended its track record and said it hoped to continue its agreement with the council.

A spokesperson said: “Our view is that Aura remains the best option for Flintshire residents in relation to the future delivery of leisure, libraries, museums and play services, as demonstrated by the strong reputation it has developed with customers since its inception in 2017.

“Flintshire County Council has never raised any issues with Aura’s performance over the past six-and-a-half years.

“Indeed, during this time, the council’s overview and scrutiny committee has commended Aura on its contribution to the council’s priorities and to the lives of residents.”

Flintshire Council said it did not wish to comment further on the report.