Council given ‘independent advice' on Denbighshire Leisure sale

Rhyl Journal

13-05-2025

At a behind-closed-doors meeting on March 26, council members voted 25-18 in favour of selling Denbighshire Leisure Ltd (DLL) to the private sector.
DLL was in the process of being sold to Merseyside-based private equity firm River Capital for £1.5million, but it was confirmed on April 30 that the investor has now pulled out.
Yesterday (May 12), the council published a 'position statement' on the matter, in which it also addressed a 17-page report by the Association for Public Service Excellence (APSE), and commissioned by public service union UNISON, which heavily criticised the proposal.
It stated: 'This document was prepared without the council's involvement or consent.
'The document is, therefore, based on the instructions given by UNISON, and specifically states that it should not be relied upon by any other party.
'The document contains a disclaimer to the effect that it does not constitute legal advice, does not draw conclusions and does not make recommendations.
'The document raises many questions which could have been answered had APSE or UNISON involved the council in the production of the document.
'The council committed to closer working with unions as the proposal progressed, and arrangements had been put in place prior to the council being informed that it would not proceed.'
The council said it sought independent, professional advice when considering the proposal to sell off DLL.
This included advice on a number of issues, such as the council's power to enter the transaction, procurement and contract issues, employment and pension matters, taxation, subsidy control and property issues.
Independent advice was also received regarding the valuation of DLL, the council said.
Its statement added: 'The council has been asked about the costs of this proposal to-date. The council has spent £62,000 to-date on independent advice.
'Although the proposal that generated this advice will not now proceed, much of that advice will be relevant to alternative models for the company and is not therefore an abortive cost.
'It should also be noted that this advice was sought in anticipation of a significant capital receipt of £1.5m to be received by the council for the sale of the shares and the revised contractual relationship would not only have prevented existing costs from increasing, but would result in the fee paid by the council for the provision of leisure services reducing in each year of its operation over a 10-year period by 10 per cent.
'This 10 per cent reduction in year two would be £152,000, increasing cumulatively to a reduction of £930,000 by year 10.'
Prior to the March 26 meeting, meanwhile, councillors were invited to two workshops about the proposal.
The council said the decision to approve the proposal on March 26 followed a 'lengthy debate' and 'substantial information supported by professional advice'.
On the decision to hold the meeting behind closed doors, the council said: 'The investor and DLL operate in a commercial world, and it was considered that, in order to protect the commercial interests of all parties, the proposal should be considered in private.
'This was confirmed by a vote by elected members in accordance with the law.'
The council concluded by saying it 'remains committed to helping DLL to find a way to continue this success'.