Service Contract - Operator to manage the Council’s five Health and Leisure Centres on behalf of New Forest District Council using a ten year Contract commencing in Q4 2020.

This notice is being treated as a contract modification notice under regulation 72(3) of the PCR 2015. The contract was modified on the 20th December 2023. Description of the modification: The Contract has been modified such that Freedom Leisure will absorb the first 10% of increased utility costs compared against their year 2, 3, 4 & 5 bid assumption (3% inflation adjusted) and a share arrangement has been put in place for any overspend beyond 10% for each contract year. The share will be 50% the Council and 50% Freedom Leisure. Based on the Year 2 outturn, the increased price which will be paid by the Council for Year 2 is £347,866. At this stage, the Council is unable to set out what the price increase will be for years 3, 4 and 5 but the Council does not consider that the total increase in price will exceed 50% of the value of the original contract. Reasons for modification: The need to modify the contract has been brought about by the extraordinary increase in utility costs caused in part by the shortage of gas as a result of the war in Ukraine. The significant increase in energy prices which has been caused by the war in Ukraine could not have been foreseen by the Council at the time that the contract was signed and the modification is necessary in order to ensure that the contract remains deliverable without a reduction in service levels/ changes to service delivery for the remainder of the contract term. The variation will not alter the overall nature of the contract as the same services will continue to be provided and the increase in payment from the Council will not exceed 50% of the value of the contract. The variation is therefore permitted in accordance with Regulation 72(1)(c) of the Public Contracts Regulations 2015. END