Top tips for running a successful leisure project

26th May 2022

It's been a rocky old road for local authority leisure operators these last two years, and they're not out of the woods yet. Despite a challenging market, activity has continued. 

These are our top tips for local authorities about to embark upon leisure projects.

We have in these pandemic years supported three local authorities to complete their leisure contracts despite leisure centre closures: the first was a Design Build Operate and Maintain (DBOM) contract which endured Brexit, only to be then faced with lockdowns delaying contract completion; the second completed when the leisure centres were actually still closed for lockdown. The third had just gone out to market and was selecting bidders when the lockdown commenced.

So what have we learnt from this process to make sure your project succeeds when the unthinkable happens?

1. Nothing is easy – why do this?

Always have a strong, convincing business case and political support.

Make sure you continue to revisit your business case throughout the project – what has changed and does that ‘change’ eradicate your ‘Why’?

I am a fan of Simon Sinek and his book “Start with Why”. The local authority team needs a really convincing business case and political support for a successful procurement and where that is the case (and there are certainly a lot of good leisure advisors out there to ensure that is the case) then even in an upside-down market, you will find the right way through. For example, if your reason to push forward was because you wanted to harness the skills, knowledge, focus, economies of scale and commercial acumen of a dedicated, reputable, leisure operator, then that that will not have changed in a pandemic – if anything, that is needed more than ever. If your reason is a political ideology – usually brought about through lived experience – that it will be better value to outsource rather than grow your team for in-house delivery, then again, the pandemic is unlikely to have changed the underlying reason to procure an operator.

2. Nothing in life is guaranteed

Understand and consider the risks and what options are available to share them.

We regularly found operators fearing to take on unknown risk – but not a fear of taking on any risk. This was unchartered territory; and bidders wanted some guarantees and an underwriting by the Authority of most risk. But nothing in life is guaranteed. And why should a public sector entity take on all of the risk? So the negotiations began on finding the right path to balance risk and reward in an uncertain period, and we found operators would take on risks that they could manage and correlate to past experience. It was a matter of splitting out and considering the various risks, how long they would last, whether they could be time limited, and the ‘markers’ for when a risk might pass back to the operator eg within a certain period of centres re-opening. The PPNs helped that journey, because adapting them to the contract used meant we could draft in a schedule that would help authorities deal with temporary changes – something that the original template contract had not considered and fully allowed for. That helped risk share when centres were closed or due to be closed. The PPNs also recommended a means of open book accounting for the lock-down support period, and looking at the unavoidable costs that had to be expended even though the centres were not open to the public. The principles were applied as appropriate to each contract’s circumstances.

Our work on modifying the leisure industry template contract to allow for projects to continue in these times proved invaluable to help the parties get closer to achieving palatable solutions whilst making the most of bidder appetite and competitive tension.

3. Nothing lasts for ever anyway

Consider the life of the contract, not the short term.

Some bidders were looking for a significant change in the deal for the life of the contract. But the deal you do with your operator will not be in place for ever, because things change and what was a big issue two years ago will not be as big an issue now – the pandemic is a case in point here. So why make permanent changes to a 10 year contract if you have a two year blip? So whilst there might be open book accounting for a short period of time, there might be an end date for that to move to a fixed price model; with potential opportunity to benchmark or market test again at a further fixed date; on one project, bidders were asked to commit to a fixed price in two years’ time; and a cap and collar risk/reward so that the risk was manageable for the operator whilst ensuring best value for the local authority, looking to test the market. There are often many solutions out there, utilised on other contracts, and this is where advisors come into their own.

4. Nothing beats a strong leader and proactive, well advised, project team

Ensure you have a very strong project team that can manage the politics and project options on top of their day job and connect with true sector experts.

Something I’m sure the current Conservative Government are no doubt ruing…

The team need to provide on the ground instructions quickly to move the project forward. Investing in the right advisory team who have real hands on experience can make all the difference. Working with people that understand the leisure industry and have been through catastrophic change, can be trusted to guide and support you and will make sure you get to your end goal as painlessly as possible.

Projects can often become stressful for those involved. Having the right support network of experts around you can ensure you remain calm under pressure whilst having at your fingertips solutions from projects being successfully delivered around the country. It helps to know how your peers are dealing with these sorts of issues, and not reinvent principles and drafting ‘cold’.

5. Nothing smells sweeter than success

Visualise what you are going for and stay on course.

There will be bumps but shout about what you are doing and why and don’t forget to celebrate success. Clearly, the journey is just starting when the contract completes, and you move into monitoring and strategic support mode – but enjoy the journey and continue to remind people in the bumps and swerves as to why you’re there. Revisit and share your business case: did you achieve what you set out for/are you on course? Nothing stays static so keep things under review and play an active part in your success.

We are proud to have supported many local authorities through incredible ‘game changing’ community projects. If you’re planning a project, we’d love to chat to you. Whether it’s sharing experience, connecting you to others in local authorities who have gone through similar projects, or for us to help advise – get in touch.

If you need advice on anything in this article

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