Decision details

The Cabinet considered a report of the Director of Public Health which advised that Oldham Council and Oldham Community Leisure Limited (OCL) were party to a Leisure Management Contract in respect of leisure facilities in Oldham, which had commenced on 28^th March 2013 for an initial term that expired on 31^st March 2023 (Contract), which was subsequently extended for a further five years.

Cabinet was informed that increasing utility costs for Leisure Centres had and will likely continue to have an impact on the ability of OCL to be financially viable.  Under clause 20 of the Contract, it states that the utility benchmarking exercises shall be carried out in accordance with Schedule 18 (Utilities Benchmarking). Utilities Benchmarking can be carried out where there are extraordinary fluctuations in the utility market. OCL had therefore served notice on the Council invoking the Utility benchmarking clause in the Contract (the details of which were included in the confidential report at agenda item 16).

The Contract with OCL provided that, if, at any time prior to the next Cost Benchmarking Date (each second anniversary following the 28^th March 2013 commencement date), either party believed that extraordinary fluctuations in the utility market had resulted in the requirement for a Cost Benchmarking Procedure, that party must issue a notice in writing to that effect to the other party. Both parties must meet (but with no obligation to act) within ten (10) Business Days of the date of the notice to discuss the extraordinary utility market fluctuations and the possibility of agreeing a Cost Benchmarking Procedure.

Options/alternatives considered:

Options and alternatives are to be considered at item 16 of the agenda.

Resolved:

That the Cabinet would consider the commercially sensitive information at item 16 of the agenda before making a decision thereon.