See also: Leisure trusts
- Management of UK public leisure centres
- Established 1993, as an Industrial & Provident Society
- Employees on permanent contracts encouraged to be members of society
- Majority employee representation on board
- “The reason why we’re the most successful social enterprise is because of our staff-led structure.”
The success of Greenwich Leisure Ltd (GLL) demonstrates that employee ownership offers an effective route for services formerly delivered by the public sector. Today, GLL is a major player in the management of leisure centres and leisure facilities across London and South East England. Its turnover is £70m (and growing annually), and the organisation employs 1,400 employees on permanent contracts, as well as nearly 3,000 seasonal, sessional and casual staff.
With some justification, GLL claims that it is London’s most successful social enterprise. For GLL’s managing director Mark Sesnan, there is one simple explanation for his organisation’s achievement. “The reason why we’re the most successful social enterprise is because of our staffled structure,” he says.
The GLL story began in 1993 when severe local authority funding pressures appeared to be about to devastate the ability of the London Borough of Greenwich to operate its leisure centres. The solution, devised in collaboration with the local authority, was to set up an autonomous not-for-profit enterprise, which would take over running the centres from the borough’s own in-house team. GLL was established as an Industrial and Provident Society, the form of legal incorporation most frequently used for consumer and worker co-operatives. Its 18-member Board was designed to give representation to all the new enterprise’s stakeholders. Eleven board members were elected directly by the employees, and other board members included three Greenwich councillors, a trade union representative and the managing director. In another innovative twist, members of the public using Greenwich’s leisure centres directly elected two board members.
Because of a quirk in the way in which relief from business rates (local taxes) could be claimed, the creation of GLL effectively meant that the threatened £400,000 cuts in Greenwich’s leisure service could be circumvented. But GLL rapidly went on to demonstrate that it was much more than just a convenient solution to local authority funding problems. In particular, Mark Sesnan has been concerned to see a distinct GLL culture developing, based on a non-confrontational management approach and on staff engagement, in contrast to the often difficult approach to labour relations in some local authorities.
Expansion to 14 boroughs
GLL has also rapidly developed beyond its Greenwich origins. It currently holds the management contracts for leisure centres in 14 local authority areas, although it has deliberately restricted its growth to London and the immediate surrounding area. Its target is to increase its tally of 70 leisure centres and £70m turnover to 100 centres and £100m turnover by 2012, and it is actively engaged in work towards the London 2012 Olympics. “Our ambition is to get the social enterprise message within the Olympic Park, and on to the world stage,” Mark Sesnan says.
The original Board structure has remained fundamentally unchanged during this period of growth, though GLL has instituted local Boards for many of the other authority areas it operates within, which have a degree of autonomy. GLL membership is open to all the organisation’s permanent staff, wherever they are based, in exchange for a one-off £25 membership payment. To become members, staff have to agree to move to GLL employment terms and conditions, which may be more flexible than the former local authority employment terms. There is also a year’s qualifying period of employment for membership.
The GLL target is to have at least 50% of permanent staff in membership, although as Mark Sesnan points out this can be challenging as GLL takes on new contracts in completely new areas. Currently about 53% of eligible staff have chosen to join (sessional and casual staff are not eligible for membership).
Elections for the staff members on the Board are held each year at the GLL AGM. “You have to be at the AGM in order to vote. We probably get about 60%–70% of our members attending – certainly there are quite a few hundred there each year,” Mark Sesnan says. Elections are typically keenly contested, and include a hustings session. Directors serve three-year terms, with a third retiring each year. Mark Sesnan adds that GLL does what it can to ensure that the composition of its Board comprises a good cross-section of people, with appropriate gender and ethnic representation.
He is convinced that the presence of people on the Board who are directly employed by GLL gives his organisation an edge over companies with non-executive directors from outside their business. “All the Board and senior management go away once a year for two or three days, to look at the plan and budget for the year. The business plan is hammered out, and then the corporate plan is produced,” Mark says.
Expansion beyond Greenwich means that GLL relies on electronic communications to reach its employees, and the organisation has followed John Lewis’s approach in establishing a regular newsletter which is not simply a management tool and which is open for critical comments. Once a year, GLL also brings together all permanent staff for a major conference, held in the Dominion Theatre in London’s West End. “The conference is important for us, and we get all our partner councils to arrange for their leisure centres to close on that day,” Mark Sesnan says. The 2008 conference focused on a series of short presentations by each staff team, discussing their working situations and responsibilities.
For Mark Sesnan, GLL is proof of the advantages of staff-led enterprise. His organisation faces a potentially difficult problem, however, as the result of an unintended outcome of the recent Charities Act that will see Industrial and Provident Societies for the first time regulated directly by the Charity Commission. Charity trustees have, under traditional charity law, not been able to be employed by their organisation. Mark is now in discussions to attempt to maintain both GLL’s charitable objectives and the principles of employee control.
Source: From Colleagues to Owners – Transferring ownership to employees by Andrew Bibby http://www.andrewbibby.com/pdf/Colleagues%20to%20owners.pdf