Encouraging the local community to use its leisure facilities improves communities’ health and well-being – fact. Unfortunately many such facilities have become run down over the years due to shortages of government funding. Sport England’s annual “Active People Survey” has exposed low levels of participation in some areas. Innovative solutions are essential for local authorities to tackle this problem and create healthier communities.
There have been calls for a regionalised structure of replacing and rebuilding local authority-owned leisure facilities, similar to the “Building Schools for the Future” programme. Such a structure would create cost efficiencies but it is doubtful whether the Government would invest in such a large-scale programme, especially in the current climate.
Local authorities have always had various options available to them for managing their assets but all have an associated monetary cost, which has to be balanced with the needs of the community. These options include doing nothing, selling the land, developing the land in conjunction with a private developer, outsourcing the facility or setting up a joint venture company. However, local authorities are now taking a more robust role in local economic leadership, including taking a broader view of their property portfolio, in order to achieve their strategic objectives. The following objectives can be met: greater public participation, renewal of leisure facilities and other community benefits, saving money and, importantly, retaining control of assets. This approach fits in neatly with the Government’s desire to see an increased use of the “well-being powers”, as exemplified by the Department of Communities and Local Government’s recent report, Practical use of the well-being power.
Local asset backed vehicles (LABVs) LABVs have been much heralded by the Government as the solution for dealing with the public sector’s assets and development projects. Their aim is to make public sector assets work harder so that local authorities and other public sector stakeholders can have a greater share in the uplift in value when used in conjunction with major regeneration and development initiatives.
The structure of an LABV is based on the creation of a special purpose vehicle. Stakeholders can offer assets or cash as their equity contribution and the subsequent output can be tailored according to the needs of the public sector partners and the project itself. This means that risk and reward can be shared – a defined “basket” of assets thus could realise long-term growth as well as providing a much-needed building, for example, as part of the output specification of a project. Its ethos is that the objectives of the project can be better delivered through a partnership approach rather than single-handedly. There are a number of models available, but these are usually based on the following approach: the local authority selects a developer and/or private investment partner (PIP), a joint venture vehicle is set up, the local authority provides land and the PIP provides capital and knowledge and makes a return.
LABVs will play a very important part in the social and economic regeneration of communities. However, they can be very expensive to set up and require a significant asset pool to justify their existence. As with any new investment device, and in the current economic climate, some councils may be wary of committing to such a scheme. As an alternative we are advising clients on the possibility of turning to the tried-and-tested formula of local improvement finance trusts (LIFTs). These may fit well with smaller-scale projects such as the improvement of leisure facilities. A familiar vehicle for investment in health facilities and services, they have been in place since 2001 to deliver public-private partnerships through a national programme designed to transform the health and well-being of local communities. No longer just the preserve of primary health bodies, local authorities are increasingly playing a part in LIFT formation. A LIFT company not only delivers investment and partnering services within a defined period, by building, maintaining and operating buildings, but also assists the public sector to develop best solutions to its service needs to add value. A company is a relatively simple and efficient way to structure a public-private partnership, and local authorities can play a key role in determining where investments are made.
The emphasis of Community Health Partnerships (CHP) on promoting new models is an encouraging sign. The recent approval by the Government of the “express LIFT” model, to be developed through CHP, is intended to accelerate the procurement process from two years to a matter of weeks – a wholesale recommendation from the Government that the LIFT scheme is a successful, proven model that is wholly appropriate for upgrading inadequate or aging public sector facilities.
The advantage over LABVs is that investment can be directed specifically into part of a local authority’s property portfolio, targeting maybe one or two buildings, which means that smaller projects can flourish from this approach.
Local authorities are key partners in encouraging the promotion of leisure and sport in their local communities, and they drive local provision. Possibilities for accessing resources exist through working alongside charitable sporting organisations such as the Youth Sport Trust and the Tennis Foundation. CHP’s aim is to develop innovative, public-private partnerships to improve the health and well-being of local communities. This fits well with the sport/health/well-being ethos, and investment vehicles can be tailored to suit the funding needs of run-down leisure facilities within local communities, as long as there is a “health benefit” in doing so. LIFT involves local authorities since they undertake many health and social care related functions, such as leisure, and local authorities can use LIFT as one means of “joining up” services that are beneficial to health, with the NHS, to promote healthy living within their communities. For example, East Lancashire LIFT has been working with Sport England to include a leisure centre in their new health and social care building in Burnley, and Sandwell MBC is working in partnership through Sandwell LIFTCo to provide an integrated health, social care and leisure facility on the site of an old leisure centre.
It is clear that local authorities may need to look towards the private sector for investment in their leisure facilities as their buildings age and decline. There are ways to secure private sector funding, which means that the local authority does not need to lose control of its assets. These options also secure valuable community health benefits and increased participation by service users. Whatever investment vehicle may be in mind, local authorities should always explore it with appropriate legal advice, as it must be tailored to local circumstances. There is never a one-size-fits-all solution.
- Local authorities can improve the health of their communities through their leisure facilities
- Leisure and sports facilities may decline and need improvement or rebuilding
- Local authorities may need to look towards the private sector for investment
- Options include LABVs and LIFT schemes
- Local authorities are able to determine where investments are made and can control their assets