UNISON regional organiser Tony Jones
A report into the controversial sale of Denbighshire County Council’s leisure facilities raises serious issues about conflicts of interest, potential beneficiaries and possible breaches of procurement law, says UNISON today (Thursday).
The research commissioned by the union, and carried out by the Association for Public Service Excellence (APSE), also criticises the lack of transparency in the local authority’s consultation and competitive tender processes.
UNISON says the report describes the decision-making process behind the sale as fundamentally flawed.
At a behind-closed-doors meeting in March, councillors backed selling the council’s eight leisure centres and other venues to a private equity investor by 20 votes to 17. But that deal collapsed at the end of April.
UNISON is sending the report to every councillor and calling on them to now back the union’s call to keep control of the area’s leisure facilities.
The union says public money spent on leisure in Denbighshire should go on just that, not to companies looking to extract profit from the local community.
UNISON Cymru/Wales regional organiser Tony Jones said: “This report destroys the credibility of the decision-making process around the sale of Denbighshire’s leisure facilities.
“It will be uncomfortable reading for some. But residents will question whether decisions were being made in their best interests and who was going to benefit most from the sale.
“The council spent huge sums of public money refurbishing these leisure facilities but then failed to explore all the options before deciding to privatise them.
“Now the original sale has collapsed, councillors should ensure they have a controlling interest in leisure facilities. Every penny spent on leisure in Denbighshire should be for the benefit of local people, not handed to company shareholders looking to make a quick buck.”
Notes to editors:
– The report is available here.
– UNISON’s 10 key concerns about the sale process are:
A lack of transparency The council has not shared the detailed business case for the sale with stakeholders, making it impossible to assess the rationale behind the decision.
Serious conflicts of interest Several new companies with names similar to DLL were registered months before the council considered the sale, with DLL’s Managing Director having 75%+ ownership in these entities and a person who is understood to be an employee of DLL. This raises significant questions about whether proper conflict of interest procedures were followed
Questionable valuation No explanation has been provided for how the £1.5m sale price was calculated or whether this represented the best value that could be achieved. The research says the council has a “fiduciary duty to obtain best consideration when it disposes of assets” but there’s no evidence this duty has been fulfilled
Possible procurement law violation Expert legal advice on contract changes appears to have been provided to the DLL management team rather than to DLL or the council.
Absence of competitive process There was “no evident attempt to test the market” to determine if the offer was competitive or if “a different partner, procured through competition would not have offered a more economically advantageous bid”, says the report
No stakeholder consultation The report says that there appears to have been no consultation with local taxpayers or people using the leisure services prior to the decision to sell DLL to the new company. The research concludes that it is “difficult not to see this as a breach of statutory duty”
Unresolved financial benefit to the council: DLL’s articles of association prohibit a distribution of funds to the council, which raises the question as to how the authority was going to be able to access the £1.5m proceeds from the sale of DLL?
Future two-tier workforce The business case for DLL “overtly recognises the right of current staff to retain their existing terms and conditions”. But it also states that DLL is “effectively paying double the market rate for certain positions”. The report suggests this indicates a strategy to cut pay and conditions under new ownership, potentially creating a two-tier workforce.
Non-compliance with Welsh legislation There’s no evidence the council has considered its obligations under The Social Partnership and Procurement (Wales) Act 2023, the Well-being of Future Generations (Wales) Act 2015 or the Welsh Government’s Code of Practice on Workforce Matters.
Rushed timeline The proposed completion date of 1 July 2025, seems “extraordinarily tight and offers little time for any input from stakeholders.” The report adds that “the needs and requirements of [the private investor] should not dictate the pace at which the project proceeds”.
– UNISON is the UK’s largest union, with more than 1.3 million members providing public services in education, local government, the NHS, police service and energy. They are employed in the public, voluntary and private sectors.