Deerness Gymnastics Academy, Durham

Case study October 2016

• Gymnastics and tumbling facility (one of the biggest strong floors in the U.K, at 34x 40 metres and state-of-the-art gymnastics equipment), located in Ushaw Moor, County Durham.
• The facility comprises a 15,000 sq ft purpose-built gymnasium, a dance studio, a preparation gymnasium, activities room, various fitness rooms, a sauna and changing rooms with showers.
• Deerness Gymnastics Academy, an acrobatic gymnastics club run the facility. To fulfil asset transfer requirements a limited company was created by members of the club. Ownership and management of the facility transferred to the limited company in 2011, from Durham County Council. This limited company run the Facility. The club, Deerness Gymnastics Academy, became a charity at the same time and this club operates within the building. The company and club are really one in the same, as the Directorship of the limited company and charity are intertwined. Whilst they are two different legal entities the two Directors of the limited company are also Directors of the charity, with a wider Directorship group on the Charity with them.
• The club operate a gymnastics academy, from grass roots & recreational to elite. They are a G.B. high performance centre for acrobatic gymnastics; the membership includes world class gymnasts (approx 60 Team GB members, British, European and World Champions).
• They operate as a membership club, rather than as a leisure centre where spaces are let.
• The facility caters for a wide membership, living across the North East of England who travel to the facility due to its excellent reputation for gymnastics coaching. Initially on transfer the facility couldn’t continue to provide the range of leisure services for the community in the same way as before, due to Transfer of Undertakings (Protection of Employment) Regulations (TUPE). However, since the transfer some different services for the community have developed, including baby gym, cheerleading, dancing, and community activities like blood donor sessions hub site for local/national elections.
• After one year of running from 100% volunteers, now run by approximately 100 volunteers and 4 full time paid staff and one self-employed member of staff who the academy buy in.

1. Description before transfer
Deerness Leisure Centre was originally local authority operated, offering indoor fitness gym and sports hall based programmes and hall space, built circa 1979 and run by Durham City Council. The facility is located in the old mining village of Ushaw Moor and its local area includes New Brancepeth, Bear Park and Esh Winning. Overall the area is quite socially and economically deprived (Durham County Council, 2012(1)). By 2000 the city council were considering closing the facility due to low levels of community use. The council approached Deerness Gymnastics academy, which operated as a club at the local school, to join them. The club were trying to convert part of the school into a gymnastics facility and had raised funds of £70,000 from the Foundation for Sports and Arts, Community associations and the school. The club and Durham City Council submitted a joint bid to the National Lottery to convert the centre into a gymnastics facility and were granted a substantial award in 2002.

(1) These areas have seen economic decline since the closure of the mines, although there is some regeneration. For example 54.3% of the mid-Durham population are living in the top 30% of deprived areas nationally by employment measures, 45.1% on health and 40.4% on education domains. Durham County Council (2012) 2012 Statistical Profile. Mid Durham Area Action Partnership. http://content.durham.gov.uk/PDFRepository/2012_County_Durham_AAP_Profile.pdf Accessed on 11th June 2015.

2. Threat of closure - the catalyst for a transfer
In April 2009 all the authorities within Durham became a single unitary authority under Durham County Council (DCC), therefore taking responsibility for the centre. In 2011, the new unitary authority, in the face of Government savings (£1.2 million in cuts), undertook a full review of their leisure portfolio and decided that they would close up to six leisure complexes across the county, as part of a comprehensive cost cutting exercise and to leave a more appropriate facility stock to achieve their Sport and Leisure Service Strategy. The authority did at that time have a far greater number of facilities per head of population than all other neighbouring authorities, largely due to the 7 former district administrations and boundaries, planning and managing their stock independently.

Deerness was marked for closure consultation. However, whilst Deerness was considered on the same basis as all other facilities, it was recognised that due to the scale and nature of usage (specialist facilities for regional, national and international level performance gymnastics) the Council’s focus would be on allowing the Club to continue their operation, but whilst also needing to achieve the desired saving.

Overall, due to the bespoke nature of the facility, focusing on gymnastics and gym floor based classes e.g. aerobics, it did not have the flexibility to provide for other sport use. This was the catalyst for possible closure and the subsequent transfer.

Of the other five facilities that were consulted on for closure:

• Abbey Leisure centre remained under the Council, after consultation.
• Glenholme Leisure Complex (including swimming pool) was closed and demolished (after a failed community bid to save it);
• The other three were transferred into community ownership, as follows:

• Active Life @Coxhoe, now run as a leisure centre by a local community group, Future Leisure in Coxhoe, as a charitable organisation.
• Ferryhill Leisure Centre initially closed, but was then transferred to Ferryhill Community Hub to be run as a community centre, including some leisure activities by a charitable group, Ferryhill Community Partnership.
• Sherburn Leisure Centre transferred as a community club (with reduced opening hours) to Sherburn Parish Council. The Parish Council did initially (with DCC approval) sub-let to a community interest company, Seconds Out, with support from Sherburn Parish Council, to be run as a community leisure centre. This has now come to an end but a new sub-let has been secured with an Acrobatic Tumbling Club and will open October 2nd 2016

3. The process of decision to close and subsequent transfer
In February 2011 the club heard about the decision to close the facility from the press, due to the decision being leaked. This was followed by an urgent call from the Council the same day stating that they were reviewing whether the facility (and the 4 others listed above) would close from October 2011 (8 months later) in order to meet the financial savings required. The council ran a consultation with the community for 3 months facilitating community views, focus groups and ideas for alternative options which still met the saving.

At the same time the club lobbied the local community (creating a 5500 name petition to save the club), local Councils and Politicians, spokespersons (such as parents who were well-known sports names) to put forward a case. After the consultation period, 4 centres were to be closed (and/or offered for transfer) and one was retained on an alternative operating model, but still in house..

The Council published a consultation document in March 2011 requiring anyone who wished to take over the Centres to complete a third party assessment proforma, to assess whether the organisation was fit to progress to later stages of selection (by 10th June 2011, with outcome received back on the 13th July), followed by a business package and plan by the 1st August.

5 months was allowed for business planning in total and less than one month from when the club would know if they had been deemed fit for progress. The club found the 15 requirements, of the initial assessment itself, difficult to evidence, for example the need to prove that they would have someone who has the ability to run a large leisure complex, understands Health and Safety legislation, financial management, experience of human resources management etc. The club found the evidencing of their ability to run the facility and meet the requirements as one of the greatest challenges of this process. That said, the Council were required to ensure that assets such as swimming pools and large leisure centres were being transferred to suitable providers, given they were public buildings.

The Council and MP’s provided a range of support. However, in the view of the club, the council didn’t offer much support during the process. At the start they ran a few seminars with experts on asset transfer, but the club didn’t find these relevant to their situation, as they focused on alternative commercial uses of facilities e.g. as night clubs or different ways to take over facilities, but not the way the club were considering it. DCC sent someone from their enterprise unit to the club. However, the club didn’t find the support useful as the individual had no experience of a sport/leisure facility and claimed that the plan to run the facility with volunteers was unfeasible. The club remained sure that they could run the sport provision, having done it for 25 years but felt they needed more help on running a facility. This was DCC’s first experience of asset transferring in the face of leisure cuts. Other assets, including Roseberry Grange Golf Club had been transferred previously, but the staff and scale of the transfer was much simpler and the pace, scale and imperative of the required savings less strict In The authority was to some extent spread thinly in trying to help when also trying to manage the cuts, wider closures and redundancies.

The club developed its own business plan for the facility. One of the Directors was a key driver of the research behind this. He was working as a University lecturer in a sports Department and utilised the knowledge of colleagues and lecture material on facility, human resources and health and safety management, to ensure that everything necessary was covered in the business plan. He considered his position to be a huge advantage in gaining the knowledge needed.

The club didn’t want to become a limited company, but were told this was a requirement for takeover, by the Council. It was important to protect the Directors should anything go wrong and ensure that the Directors were not financially liable. However the club were concerned that as a company they could lose club funding opportunities and Council rate rebate. So they applied for charitable status for the club, a process which they found onerous, taking 6 months to complete. Now the limited company manage the building and the charity, the club. The Directors are now protected by the legal status as a limited company and the facility receives an 80% rent rebate because of the club’s charity status, plus an additional 20% rebate from DCC.

Not with standing the lack of practical support from DCC, both in the senior management and political leaders the Council were keen for the club to continue in the facility, not least because the key coach was a positive advocate for sport, many young people had benefitted from the club and the centre had a high profile through significant success in their sport. With so many international gymnasts, should the facility have closed without transfer it would have been ‘big news’ and would have been ‘bad publicity’ for DCC, although all the closures were already ‘bad news’ in all of the affected communities.

There was never any doubt that the club had moral support from officers and local politicians who also agreed that for the first 5 years of lease there would be a peppercorn rent of £1 per year and this was agreed by DCC. This support was important, as the club knew that if they could prove they had a business plan to achieve break-even, DCC would give them the building and rent free and that with charitable status they could get a minimum of 80% rate relief. In actual fact DCC gave a discretionary extra 20% relief for the first two years, so they had no rates at all to pay. Whilst this is not guaranteed to continue, it is the norm for a club with Community Amateur Sports Club (CASC) status to receive discretionary relief. This has not been challenged since by the authority either, other than normal checks.

The process of lease negotiation has been challenging. At the stage of the club taking over the facility the club and DCC disagreed about the content of the lease and this has only recently been resolved. During that period the club have operated under a licence to occupy.

The lease issues were primarily about building responsibility and notice to quit periods. DCC have insisted that the limited company take responsibility for all aspects of the building, including the roof and roof space. The club’s solicitor contested this, as normal practice would be for the landlord to have responsibility for the roof. That said, this was not a normal circumstance as the buildings on this occasion were offered for transfer at no cost to the Council, simply because budget cuts were the cause of their transfer. The club did feel this was harsh and fought against this, but given it has been applied to the wider leisure centre transfers DCC felt it couldn’t be inconsistent with one organisation.

In terms of the initial notice to quit from DCC this would have been 6 months, but as the club knew this would not be enough time to find a new venue, they negotiated this up to two years notice and this has been supported by the authority. The lease also states that the facility must be left in the state of repair that it was when taking over, but so much improvement work has now been done by the club that DCC would be benefiting from this if the original take over date isn’t used. This remains a tricky issue in leases.

The club are about to sign the lease, as they have submitted an Inspired Facility bid to Sport England and need an up-to-date agreed lease. The club have now negotiated a ‘no break out clause’ as Sport England insist on a minimum of 10 years break out clause for any bids between £50,001 - £99,999 see the Inspired Facilities Guide Round 8 This is important as the heating system needs replacing at a cost in excess of £100,000!

One of the biggest financial problems for the club was the liability for the Lottery Grant they were awarded for the facility in 2002, it was almost £500,000. At the time of the grant they had been told by DCC that it would be written off, with no liability to the club. However since taking over the facility they have found out that they are liable for the remainder of the award on the facility because Sport England have insisted this is passed on in the lease. The County Council has challenged this with Sport England, but did not succeed. After 25 years the grant will be written off and the facility is half way through this period, but should the facility close within that time the club will have to pay a percentage of that money back, which could be be £200,000 if the facility closed now. That said, the Council notes that such clawback has never been applied to any centre yet by Sport England and believe the grant responsibility would be with the local authority, if a centre was declared bankrupt, which it is hoped should minimise the concern/worry to the club.

So the lease with DCC will include the centre’s liability for the additional amount of the award which was a surprise and concern to the club and the local authority as it was acting as a further barrier to progress.

During the transfer process the club tried to involve the local community. An initial consultation meeting attracted 2-300 local people but interest went, when they were told that the centre could not run any of the usual services for fitness and leisure as this would mean that TUPE applied and all staff at the centre would need to transfer as per the regulations. The transfer of the premises to a private club negated the TUPE requirement as the service operated had changed. The manpower for the transfer phase came instead from within the club. The Friends of Deerness Academy was set up and looked at fundraising, identifying the jobs and people that would be needed to run the facility and attracting volunteers to service the facility.

By the transfer point the existing Council staff were re-deployed or made redundant.

4. The role of volunteers after transfer
In the first year the centre ran with 100% volunteers. During the business planning phase the club developed volunteer capacity. The club audited members (parents/carers) skills and knowledge, against the criteria they needed to fulfil in the business plan e.g. HR, Finance, Law, Building maintenance (joining, electrics, and plumbing). In the plan they specifically listed all jobs required to run the facility and the guarantee they had from members who said they would complete them. Members got behind this, for example, one of the electricians committed to three years of free labour and electrical support. From this developed a list of job descriptions and assigned individuals. A good range of professional backgrounds of parents and coaches helped, e.g. one senior coach was a Chief Fire Officer and so took on H & S co-ordination.

The overall management of the facility is by the two Directors of the limited company, who run the building, staff and recreational service side of the facility. The club is run by the Charity which has 12 Officers including one of the facility Directors and several key coaches, they run the competitive/performance side of the gymnastics provision. The club found it relatively easy to attract volunteers initially, but after one year numbers whilst still good, had declined. The majority are parents of children at the club, although initially local tradespeople fitted kitchens and did plumbing, keen to see the centre survive. Maintaining parent volunteering since transfer is harder as the volunteers’ only remains for the period of time that their children are involved with the club and there is a need to make new parents aware that the facility is not-for-profit and requires their help.Newly designed membership packs set out to parents that there is an expectation that they will help the club in some way. By 2014, three years after the transfer of the facility, about 70% of the initial volunteers have gone but there are always back up volunteers in place. As the club were financially successful in the first year they took on four full time staff (all coaches) (including a previous British gymnastics Regional Development Officer who was already with the club and could coach, develop and manage part of the club/facility).

Likewise, after the first year, the club transferred the legal advice and accountant roles, previously held by two volunteers, to paid Solicitor and Accountant services, to ensure that work would be completed to the desired time scale. From the start the club paid for media management services, in order to build the profile of the club to grow the club, leverage for funding streams and promote the work of their volunteers.Since the transfer the ‘Friends’ group has taken on a fundraising role only. Volunteer capacity has grown in other ways. A few pensioners who previously used the weight’s/CV facility asked if they could continue to use them, in return for cleaning.

At first volunteers were assigned roles e.g. in charge of tuck shop or cleaning etc., however if they were away from the club that night their job didn’t get completed. Instead the club set up a system where they have a notice board for the week, with the tasks that need doing on a particular day, in a prioritised order which volunteers will work through and tick off.

5. Changes in the centre – post transfer
Overall this was an aging facility and whilst some maintenance work had been completed by the Council, the state of the building internally and externally could have been better. Ultimately, with pending cuts this was a key reason for the consultation on closures and eventual transfers, as the authority could no longer retain the stock on the budgets it had.

However, within a few months, the entire interior and exterior of the facility were painted and decorated, windows/doors fixed, and the whole building refurbished. This was all done by volunteers, who also sourced free end of line paint from B & Q, decorating supplies and furniture from a charity and ceiling tiles etc from shops that were bring re-furbished. The entire lighting system was modernised to LED’s, with room use sensors, and on the advice of a volunteer electrician the amount of lighting in each room reduced (within legal limits) resulting in a huge reduction in electricity costs. Other ways to save money in the building have been introduced e.g. toilet roll dispensers where only one sheet is pulled out at a time. Club colours of grey and white were used consistently throughout the building, with picture frames and notice boards in these colours. Everywhere the children’s achievements’ are celebrated through pictures and notices to ensure that the centre has a homely, club feel.

The club has been able to better respond to its members needs. Before they were limited to particular usage times given to them by the Council, now training can start at 7am or late on some evenings and work around the children’s education. Weekends can now be fully given over to hosting competitions as and when desired. Senior athletes can be better prepared for competitions by mimicking the timings of the competition programme. Baby gym session times start later than they used to, allowing time for the school run.

The club has tried to find creative ways to address local needs, whilst recognising the original agreement with regards to TUPE. As only gymnastic related activity is allowed they couldn’t offer the previously run kick-boxing, taekwondo, aerobics and Zumba. So the centre now runs gym-fit, baby gym, cheerleading (part of British gymnastics), and dance. Baby gym is a big income generator and the club received a £7,000 NatWest grant for equipment. Demand and provision of recreational gymnastics has also increased, going from approx. 60 regular users under the Council, to 600+ under the current centre. However there is so much more that the club think they could offer to the local community, through general fitness and training, if they were free of TUPE restrictions. The centre previously helped the community by being a location for blood donation and local elections and initially DCC said that the centre couldn’t continue this (due to TUPE) but eventually the case officers gave permission. There are frustrations that no one can find out how long the TUPE regulations last, neither the local authority legal team or the clubs solicitor have been successful as essentially, it relies on a challenge being made by the employees originally made redundant at transfer stage.

The council have benefitted from very positive publicity of the success of the centre; the success of the gymnasts and the contribution of the volunteers.

6. The additional contributions of volunteers
Volunteers take pride in their facility, feeling a sense of ownership and treating it like they would their own home, for example always ensuring it is clean and tidy. Using volunteers and ensuring that other costs are reduced also means that membership fees are one of the cheapest for a gymnastics centre in the U.K. The club are aware that their immediate catchment area is socially deprived area and a lot of children come from single-parent families. The club ensure that parents know that if staff had to be employed to cover volunteer duties, fees would rise.The club is also successful at bringing the talented on quickly but ensuring a high quality service for all levels of ability which increases commitment from members.

Changing opening hours and programme for members.

Being creative with services provided (and meeting local demand) (by adapting gymnastics activity.

Improving the facility straight away.

The volunteers have been responsive to local needs. For example; baby gym is not a taught session. The centre wanted it to be a structured education-led session but listened to the parents who wanted to come in and explore with their children. This is now facilitated with just with a staff member on hand for safety. Parents use it as a social setting to come and meet other parents. Levels of recreational class use have also increased now that timings are in the control of the club.

7. Important Success factors

A pool of parent members to draw on and a dedicated team of coaches, some of whom gave up vast amounts of time to save and run the facility. One of the Directors drove the business planning process and despite being a senior coach, did not go into the gym as coach during this time, spending 6 months in a room, working on the plan and bringing in key parents who had the expertise to bring it together. He knew that DCC were asking for the equivalent standard of plan that they’d expect from a professional organisation and so had to produce one of this calibre.There are a few of these volunteers who dedicated themselves fully to saving and running the facility and they work at the centre as though it is a second full time job.The commitment is a challenge to these volunteers and the centre might struggle if any of them left (but see comments on this under sustainability later on).

The club has tried to operate like a family. Other centres might operate with several groups so there might be a football club, a badminton club, a tennis club etc. but with Deerness the centre is one club, so there is an over-arching feeling of ownership for those involved. All volunteers have t-shirts with Gymnastics Academy on (a small cost) but which ensures that everyone is recognised for their help and feels part of the team. Training groups are also integrated, so that everyone sees everybody. So there will be international gymnasts training at the same time as five year olds. They are on a different floor but the parents can see it from the balcony. They can see where their five year old could be if they progress and may feel more committed to the club because of this.

At the same time, the coaches have kept ownership of the facility, with the coaches in key roles and forming the majority on committees. This is to make sure that there is a balance of experience and that ideas are considered realistically. For example parents who want to set up a Café may not understand the health and safety/food health and hygiene requirements. Also with parent volunteers there will be a turn over when their children leave, but coach members of committees provide consistency.

The contribution of volunteers is always acknowledged at centre events, in meetings and around the centre. The club always nominates volunteers for charitable and sport related ‘volunteer of the year’ categories. The club has also been nominated for various sports awards and key volunteers are asked to attend these awards nights/dinners, wherever possible, so to recognise their efforts and make sure they realise they are ‘part of it’.

Paying for publicity management support and turning over legal and financial roles to paid professionals after the 1st year has ensured high levels of service in a timely fashion, which wouldn’t be possible with volunteers.

Support from the council on rent and rate levels.

Breaking down volunteering into task lists, with prioritisation on that day, meaning that small amounts of volunteering can take place.This ensures tasks are completed, but that volunteers can choose to contribute just the time they can afford.

8. Sustainability
Finance is considered to be the biggest challenge, the volunteer Directors now have the responsibility of sustaining the facility and ensuring that 4 FT staff salaries can be paid. One of the Directors does the accounts every night, to keep on top of them but also to compare each week to the previous year, so costs can be reduced or income sought according to where they are. The club are strategic in applying for grants – they have avoided applying for any grants since they took over, so that they could apply for grants for large work, having proven that they are taking care of others aspects themselves. So they intend to apply for a ‘new improvement facility grant’ for a new/converted boiler (£50-100,000).

The volunteer Director interviewed has given huge amounts of unpaid labour to the centre, working 7 days a week at the centre, on top of a full time paid job elsewhere. In the last year this Director has tried to step back a little, only going in 5 days a week, in order to give more ownership to others and to ensure that the centre could run without them. For each of the key volunteer roles the centre tries to ensure that there is a backup person in place in case of a volunteer absence. Finding back up individuals is challenging as parents will volunteer to help with competitions, events and cleaning without problem, but other jobs involve more serious levels of responsibility e.g. health and safety. Additionally paying some staff creates a challenge of managing both volunteer and paid staff. This may impact on recruiting or keeping volunteers who think that work should be done by the paid staff. There is always a pressure to keep volunteers happy, so as not to lose them. The Directors need to make sure that the paid staff are always busy; otherwise volunteers may resent completing chores.

What would have helped? The Director notes that more support from the Council would have greatly eased the challenges of transfer e.g. an ‘A to Z of how to get through a business plan’. Likewise the Council could have set up a support group for the facilities that did go through transfer in the local authority area, to share challenges and solutions and to feel that they are not alone. For example, community run facilities could perhaps share negotiation on utilities etc.

The council said they would come and check every 6 months on the building but have only been once in 3 years to check on the maintenance of the building (other officers have attended a few times to inform of grants available). They were astounded at the development and refurbishment of the facility, estimating that it would be valued at thousands of £s. Volunteers are keenly aware of all they have achieved by themselves.

The club would have found practical support such as with technical facility issues very useful e.g. preventing legionella in infrequently used showers, in a facility used predominantly by children (who like most, don’t take daily showers)! Whilst some support was offered, such as small scale repairs and maintenance on transfer, it is clear that much more was needed for ‘starter organisations’ and authorities need to recognise this for a successful transfer.

It is recognised that despite the turmoil, a working relationship remains with the authority such as support to apply for the recent Inspired facilities application.

There was a lack of communication across the Council during this unprecedented change which led to the centre being requested for the same information several times over from different departments. For example the club received an additional rebate from the Council but this has taken a lot of effort to get this and provide all the supporting documentation. The evidence required for this rebate was the same as that required for asset transfer but they had to submit this all again to the same council (but different department) due to a lack of ‘joined up approach’ where one Council department does not liaise with another. That said, it is recognised that at the time of these cuts, Durham County Council was an authority which hadn’t even had its 2nd birthday! Systems were still being established as new unitary authority, when the large scale austerity measures hit.

The nature of the transfers were that there no funds to further repair buildings. However the Council did help in some areas e.g. paving slab replacement, alarm system payment and support with grant funding applications. A working relationship with the Council is evident, with the Council trying to help where they can, whilst being fair to all the organisations who sought transfer.

Credits

• Lindsay Findlay-King and Gordon Macfadyen, Northumbria University
• Geoff Nichols: University of Sheffield
• Deborah Forbes: University of Newcastle

Copyright: Northumbria University 2016