DENBIGHSHIRE Council could sell off its leisure company in a bid to save money and “safeguard services for the future”.
Councillors will meet in a behind-closed-doors meeting on Wednesday to consider a report from Jamie Groves, the corporate director of Denbighshire Leisure Ltd [DLL].
The company runs eight leisure centres, the SC2 Water Park in Rhyl, the 1891 Restaurant and Bar at Rhyl’s theatre, Rhyl Pavilion Theatre, Rhyl Town Hall, North Wales Bowls Centre, Nova in Prestatyn, and Ruthin Craft Centre and its Cafe R eatery.
The company employs more than 500 members of staff.
Several sources with knowledge of the proposal spoke to the Local Democracy Reporting Service to explain what is proposed and why it is taking place.
One warned leisure centres would close if the deal isn’t signed.
They said the deal would both save funds whilst injecting money into the cash-strapped authority.
“The council have had to find money for inflation and wages every year. Denbighshire Leisure are funded themselves. So it hasn’t cost the council any more money to put into Denbighshire Leisure,” they said.
“What this does, if this investment goes ahead, is £1.5m goes into the council and a reduction of 10% of the fees every year to (paid by) the council in the contract.
“It will allow Denbighshire Leisure to operate in other areas of the country without being held back by the council.
“This will allow Denbighshire [Leisure] to employ people on different terms than they would have to in the council (wages and pensions).
“Buildings remain in the ownership of the council in a service level agreement, the same as they would for any care home they take.
“Denbighshire pays Denbighshire Leisure a fee every year. That hasn’t increased from day one.
“What they are saying is that that fee will be 10% less over the next few years.
“So the fee reduces for Denbighshire. It is a money saver for Denbighshire. They get £1.5m for the buyout.”
They added: “What it allows then is they can do things they can’t do now.
“For example, they could go and run a leisure centre in another county, but at the moment, because they are affiliated to the council, they can’t do that.
“All they are doing is buying (the rights to the running of) the management essentially.
“They are free then to do other business they can’t do now. It is absolutely good news.
“This safeguards the leisure services in Denbighshire for the future. It is a saving to the residents because the cost of running the services will be less as well as the £1.5m.
“My understanding is there is one member of the cabinet that is not comfortable, but the rest are, and I think there are some councillors who don’t understand the business model, and that is the worrying bit.”
The source warned: “If this doesn’t go through, you will see leisure centres closing in Denbighshire, and I’ll tell you Corwen and Llangollen will be the first to go.”
A second source also explained to the local democracy reporting service how the take-over could work.
“It’s coming to a point where the cabinet and then the council will be deciding whether to sell off the (control of the) management (of the business) in effect to a private investment company,” they said.
“As far as I’m aware it’s to move DLL forward. They are restricted in terms of being able to invest and grow by the framework agreement they’ve now got with Denbighshire.
“The state of play is that they have been in a position where DLL has been limited partly because of (the council’s) finance and partly because of their agreement with the local authority, and therefore, they’ve been looking at alternative options.”
The source then explained the management “buyout” was supported by an equity investment fund.
“The senior management (of Denbighshire Council) are fully supportive of this, but the cabinet is split,” they added.
“There will be financial benefits to Denbighshire [Council] as a consequence of that agreement and also there will be less expenditure on Denbighshire for DLL, because Denbighshire subsidises it, as the council does put money into DLL now.
“This option will be sustaining DLL, allowing DLL to grow, but as a consequence will sustain the existing facilities in Denbighshire.”
A spokeswoman speaking on behalf of both Denbighshire County Council and Denbighshire Leisure Ltd said: “Denbighshire County Council and Denbighshire Leisure Limited are currently working together to consider a potential change in the current operating model for leisure services in the county, in order to continue its success.
“Any change will consider how best to grow and develop what’s on offer to residents and visitors as a natural next step to continue the success of DLL since it was set up in 2020.”
She added: “No decisions have yet been made, and all discussions and decisions will need to go through the appropriate committees and will be done in collaboration.”
The meeting will take place at Ruthin County Hall tomorrow (Wednesday).
