Public sector

Social enterprise case study: Greenwich Leisure Limited

Guy Clifton Guy Clifton

Promoting a healthy local economy.

Established over twenty years ago, Greenwich Leisure Limited (GLL) is the UK’s largest charitable social enterprise in its field and was the first of its kind. It manages over 250 leisure centres, and also manages approximately 70 libraries. It has a diverse client base, working nationally with around 45 local councils and a range of public agencies and sporting organisations.

As the company has developed it has added a sports foundation to its offering, which offers independent support initiatives for young sporting talent and sport and legacy development programmes. Health intervention has also been developed, working with GPs to offer the Healthwise programme, offering classes and courses tailored to help people manage existing health conditions and improve their wellbeing. GLL has recently been awarded main provider status to deliver apprenticeships nationally.

The journey to this model began as a result of financial pressures in 1992. This was a period where Local Authorities were using the Compulsory Competitive Tendering process. However, the tender document produced by Greenwich Council was so complex that only the in-house provider could realistically bid. The level of savings required, even at this stage was significant and this forced a new contract and the need for a new structure to provide the service.

At the time councils could not set up charities or arm’s length organisations and therefore faced tax and technical challenges. So the company was set up by the staff at £25 per share then put forward to the council. Now the legal structure of the company is an industrial and providence society (workers cooperative and not for profit democratic), operating a staff-led, stakeholder co-operative governance structure. The management committee is appointed at the annual general meeting of the members of the Society and has representation from a number of stakeholders including customers, local authority members, independent skilled professionals and the workforce.

The social enterprise initially started small, just taking responsibility for the leisure services for Greenwich Council. However the increased freedoms meant that they soon started working with other local councils, and began replicating the model with others.

A key success factor for the company has been the entrepreneurial focus from the top down. Targets are set for all staff which are financial and activity based, with staff held to account based on their outcomes. GLL has shifted the culture of staff, to instil a more business-like approach and deliver better customer service. A similar shift has also been needed when taking over libraries, as experience has shown that this is a service area that generally does not have a business structure around it. Having the right people in place with the right skills is really important, with a recognition that those who have previously been involved in the service don’t necessarily have the skills required to run a business in the longer term.

The changing financial landscape continues to present challenges for GLL. Local authorities’ financial constraints mean that price is still the most important aspect when putting any service out to contract and not the social value aspects, making the current business model challenging. The company is managing these risks by diversifying and capitalising on its unique position in the market. As a well-established company it is able to evidence new ways of working, adding value and innovation. For example, GLL has introduced online enrolment for leisure which has transformed the customer journey and now 60% are online memberships.

One of the most significant learning experiences GLL has gained from setting up this company is the need to consider working capital and find a way to de-risk the cash flow. Many local authority contracts still make payments in arrears, so it is important to consider the level of working capital available and have set expectations prior to contract inception or when services are being spun out. Some local authority contracts now expect a payment, which is an added pressure.

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For more information on setting up a social enterprise contact Vivien Holland