People's Audit – Four LIBRARIES: GREENWICH LEISURE GETS £1 MILLION REDUCTION IN ITS MANAGEMENT FEE AFTER OFFERING TO RUN TWO LIBRARIES AS 'HEALTHY LIVING CENTRES' – "There is no such thing as a free lunch"

People’s Audit – Four

LIBRARIES: GREENWICH LEISURE GETS £1 MILLION REDUCTION IN ITS MANAGEMENT FEE AFTER OFFERING TO RUN TWO LIBRARIES AS ‘HEALTHY LIVING CENTRES’ – “There is no such thing as a free lunch”

Evidence of a behind-the-scenes agreement by Greenwich Leisure to reduce its fee to Lambeth by £1 MILLION ANNUALLY if Lambeth gave the go-ahead to convert two of its libraries into Greenwich Leisure-run ‘healthy living centres’ has been uncovered by the report.

Ever since demonstrators occupied Herne Hill’s Carnegie library for several days in April 2016, the borough’s library service has come to symbolise anger felt by many library users locally and nationally at significant cuts to library budgets.

The occupation of the Carnegie library by protestors was a result of Lambeth’s plans to install gyms in some of its libraries. These plans came about following a consultation about the future of libraries carried out by Lambeth, called Culture 2020.

The original Culture 2020 consultation had proposed that certain libraries were closed, with the sites being sold and the money used to set up an endowment fund to run libraries elsewhere in the borough.

Without public consultation, this plan was changed to a proposal to install gyms within certain libraries and re-label them as “healthy living centres”. This decision was rubber-stamped by Lambeth’s cabinet in October 2015.

The gyms will be run by GLL (now re-branded as Better), who currently operate Lambeth’s leisure centres.

The Peoples’ Audit were keen to understand how this deal came about and how it was that the contract to run the gyms had been handed to GLL without a competitive tender or any sign of a business plan.

The plans to turn the libraries into gyms with books were not the only option on the table for Lambeth.

Libraries campaigners submitted their own business plan (the Barnes Plan, named after the head of libraries) to Lambeth which they say would have kept the libraries open. This plan was rejected by Lambeth as not delivering the necessary savings in time. The Council assessment of the Barnes Plan said the “proposal does not satisfy the assessment criteria and does not deliver within the agreed financial budget for 16/17 or fully meet the agreed policy framework of Culture 2020”.

We were interested to find out what was going on so we requested to inspect GLL’s invoices to Lambeth. On one of them we found a reference to “Reduced fee. Culture 20.20”.

Whilst it might seem desirable to receive a reduced fee there is no such thing as a free lunch.

Normal contract practice and legislation prevents public bodies from substantially changing contract terms as this can lead to allegations of corruption and unfair competition, so we made a Freedom of Information request to see correspondence regarding this.

This correspondence reveals that the day after the cabinet decision was made to convert libraries into healthy living centres, GLL were chasing Lambeth to confirm changes to their contract to reflect a deal that had been struck between them, namely:

1. Lambeth was to remove the break clause option in GLL’s current contract, thereby ensuring that the contract runs until its expiry date in 2023.

2. A behind-the-scenes agreement by Greenwich Leisure to reduce its fee to Lambeth by £1 MILLION ANNUALLY if Lambeth gave the go-ahead to convert two of its libraries into Greenwich Leisure-run ‘healthy living centres’.

A month later GLL write to Lambeth again stating “As you know, finalisation of this initial matter unlocks progress in a number of other areas, in particular we will be able to confirm our sponsorship of the Black Cultural Archives, who are currently pressing us to do so.”

Papers for the October 2015 Cabinet stated that , “As a consequence of the Culture 2020 consultation Greenwich Leisure Limited have stepped forward to offer BCA a sponsorship deal worth in the region £100k pa, which will include £50,000 revenue and £50,000 in -kind technical support.”

But nothing in the Cabinet papers suggest GLL’s £100,000-a year-sponsorship of the Black Cultural Archives was conditional on this deal to turn libraries into gyms.

This condition was not publicly known or open to scrutiny at the time councillors made their decision. The link between the BCA sponsorship the £1m reduced fee and the decision by Lambeth to hand control of the libraries to GLL would seem to be undeniable.

Whilst the BCA sponsorship and the £1m reduction in fee might be appear to be highly desirable, this kind of horse trading is exactly not what a public body should be involved in.

There is no transparency or demonstration that this is being done for the public good.

It is likely that Lambeth’s failure to tender the conversion of the libraries to healthy living centres and the amount of change that has been carried out to GLL’s original contract has amended the nature of the contract to such an extent that Lambeth are in breach of the Public Contract Regulations 2015.  (Source: Lambeth Peoples’ Audit report).

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