Cllr. Leaman proposed the following motion, which was seconded by Cllr. Streatfeild.

“Council notes the final audit report on Sencio contract Management, published in May 2024.”

Speaking to the motion Cllr. Leaman set out how the motion had been brought to consideration at Full Council. The audit report confirmed that the contract was not fit for purpose and lacked any provision for managing poor performance, expected performance levels and business continuity provision. There was no documented guidance given to the Portfolio Holders and reporting to Committees was ad-hoc. In speaking to his motion, he questioned why no action was taken when there were red flags and concerns expressed by the Scrutiny Working Group, which also highlighted that the contract did not represent value for money. Members were advised on a loan provided to Sencio and he queried why the contract was not rewritten to put it on a sustainable footing. As well as noting that there were no audited accounts since 2018 and losses between 2018 to 2021 ran into the millions and this was before the pandemic and arrival of other gyms. In closing he expressed concern that the report did not detail the role of the Council’s representatives on the Sencio Board,  and only that advice and guidance was provided ad hoc and that Council had not set out any expectations from the Board Members. He questioned whether the Board took a responsible approach to risk management and the interests of the Council and residents.

An amendment was moved by Cllr. Penny Cole and duly seconded by Cllr. Williams that the motion include “and agrees the internal auditors recommended actions in full.” Cllr Penny Cole spoke to her amendment advising that the Audit Committee had thoroughly considered the report by internal audit, and she reassured Members that questions had been asked of the officers and councillors who were present when Sencio went into administration, and she was of the opinion that everything was done that could have been done to ensure that the Council did not spend more money than it had to in ensuring that the Leisure Centres and golf course remained opened and then re-opened as quickly as possible. Having looked back at the Scrutiny Committee meetings, Members had expressed their disappointment with the Chief Executive of Sencio for not providing the accounts and had requested further attendance at the Committee. The Committee though were told, that the finances were back on track. The Board of Trustees comprised on 9 people and the council only had two representatives. The contract itself had been written in a way that the council would not have been in a position to end the contract any earlier. Turning to the audit report and looking to the future, three actions had been proposed for the new leisure contract going forward and would reflect the lessons learned.

Members debated the amendment and questioned how the lessons learned would be embedded into future procurement as well as requesting to identify who was accountable for Sencio going into administration. As debate continued some Member’s expressed their concern that the report lacked detailed information of documents considered, including financial information and that in personal opinions there were other options to address poor performance which could have been explored and was troubled by the conclusion of the report stating that the Council had therefore taken all action available to them through the contract provisions that was the only option.  In response, some Members expressed their view that the amendment went further by implementing the audit report in full.

In her right of reply to the debate, Cllr Penny Cole reiterated that the Board of Trustees was made up of nine people, but with only two representatives from the Council and the contract was written in 2003, and lessons had been learned and thanked officers for the amount of work to consult Members on views for contracts going forward.

In his right of reply to the amendment, Cllr Leaman responded that there were gaps in transparency, governance and accountability and did not support that everything had been done that could have been done, but would support the amendment.

The amendment was put to the vote and it was agreed.

Debate continued on the substantive motion. A further amendment was moved to the substantive motion, by Cllr. Streatfeild and seconded by Cllr. Shea that “Council agrees an external review of the Council’s relationship with Sencio and the effectiveness of its governance and oversight and make recommendation to improve decision making and transparency.  Speaking to the amendment he expressed that more recommendations could have been included detailing what had gone wrong, how money was wasted and what would be changed in the future, and the amendment would allow someone external to do so.

In debate in was raised that having an external investigation would be a use of further financial resources when the internal audit report had been clear in the number of recommendations that should be adopted, noting the risk register to help mitigate against issues in the future. It was also raised that again that the contract were written in a different way and any future contracts were written in a way that allowed ending of contracts. During debate some members expressed the view that an external audit would allow for lessons to be learned from mistakes made, and given the cost of losses, the external investigation would not amount to that figure. It was also noted, during debate on the amendment that a new procurement process was ongoing and lessons learned had been demonstrated within those procurement operations.

Cllr Streatfeild gave his right of reply to the debate, followed by Cllr. Leaman’s right of reply to the amendment. A vote was taken on the amendment and the amendment was lost. There was no further debate on the substantive motion. Cllr Leaman gave his right of reply and the substantive motion was put to the vote and it was carried.

Resolved: That

a)   the final audit report on Sencio contract Management, published in May 2024, be noted; and

b)   the internal auditors recommended actions, be agreed in full.