Agenda item

The Board received a presentation, accompanied by a briefing note, from the Leisure Services Manager concerning the procurement of an operator for G Live.  The presentation outlined the current arrangements, the venue, the procurement process, how to procure a new operator, priorities and procurement timetable.

In terms of current arrangements, the Council had entered into a 10 year contract to operate and manage G Live with HQ Theatres Guildford Limited (HQT) on 12 August 2011 and this contract would expire on 30 September 2021.  In the current contract agreement, HQT was required to optimise commercial and hospitality income in G Live in addition to providing different genres of entertainment.

The venue was designed to complement existing theatre facilities in Guildford and the main programme reflected this and was driven by a series of predominantly one night performances of music and comedy.  The venue consisted of main concert space capacity of 1,031 people seated, 1,700 standing, and a second space for seating up to 100.  There were also hospitality and meeting rooms.  In 2017/18, the contract turnover had been £2,795,491 (before subsidy) and staffing costs in respect of the 31.50 full time equivalent employees had been £721,000.  There were also 121 casual staff and 126 volunteers.

The procurement process was required to be undertaken well in advance as the touring product which comprised the core of the programme was often booked a year in advance and, if the Council opted for a different operator as a result of the procurement process, they would need to work with the existing operator to ensure a smooth transition to reduce the impact on the customer.  In addition, the transfer of the venue operation, which would be a significant and complex process, would require the transfer of the employees under the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations.  Advance bookings, existing agreements and equipment would also need to be transferred.  The potential purchase of stock and condition surveys of the building and plant etc. were also factors.

Procuring a new operator required a review of the Council’s desired priorities and requirements (e.g. paying the Living Wage) for the venue, preparing the complex and detailed documentation around the desired priorities, going to the market, evaluating the bidders’ submissions against the desired priorities and requirements, and awarding the tender for the operation of the venue.

In relation to priorities, automatic requirements included safe operation of the venue, suitable back of house operating structure (i.e. transparent business plan, management structure, staff training programme etc.) and asset management arrangements (replacement plan and pre-planned maintenance programme).  Items to be prioritised included catering provision and hospitality offer, quality and diversity of programme, community access, financial arrangements (subsidy/management arrangements, night time economy contribution and commercial access), customer service and accessibility, environmental impact, facility cleanliness and presentation, and creative learning programme.

The procurement timetable was of a duration of one year and could include negotiations with planned mobilisation of the contract on 1 September 2020.

The following points arose from related discussion and questions:

·             The car park to the rear of G Live was currently operated by the Council and not the responsibility of the venue operator.

·             Catering and hospitality were key factors to the success of an entertainment venue and it was the operator’s decision whether an offering was provided in-house or through franchises although the latter could be more costly for the operator.  There was scope to improve the existing catering provision, which was hampered by a small kitchen and therefore limited menu and capacity.

·             Although community use of the venue was favoured, a balance needed to be struck between discounted use by community groups which might not attract large audiences (and therefore would not be suited to the venue’s capacity) and more profitable commercial bookings.  Take up by community groups under the existing contract provisions was not particularly high and there were many smaller, more suitable venues e.g. the Electric, Boiler Room, Mill Theatres etc. in Guildford that met the need of many community groups. 

·             The seating capacity and space at G Live lent itself to concerts and comedy shows.  The venue did not attract major national touring productions or big acts as promoters would be looking for significantly larger venues, such as arenas.  G Live had successfully hosted warm up events, which had sold out rapidly due to such high demand e.g. Michael McIntyre.

·             Undertaking the procurement in an early and structured manner would mitigate some of the associated disruption.  The existing operator was required to prepare an exit plan and all areas, such as the existing customer database, booking system, website, stock list etc. would be explored as part of the procurement process to ensure a smooth transition. 

·             As the TUPE Regulations applied, existing staff would be retained and transferred to the new operator which would mean that if a new operator took over the contract, the venue would still be largely operated by staff who had operated the building and made many of the bookings prior to transfer.

·             Several bids from potential future operators were expected.

·             Management of G Live in-house or via a Council-owned company were suggested as possible alternatives to procuring an external operator which could reduce the amount of subsidy required.  However, establishing a company was a time consuming process and a reduced subsidy was not guaranteed i.e. it could cost more to operate in-house.

·            Existing concessions such as free tickets for carers would benefit from increased publicity.

As part of their deliberations, the Board was advised of the automatic back of house requirements to underpin the successful operation of the venue and was invited to complete individually a questionnaire ranking eight items in order of importance.  The eight items were catering provision, diverse programme, community access, financial arrangements, customer service, environmental impact, cleanliness and presentation, and creative learning.