Westminster City Council has extended its leisure contract with Everyone Active for three years, ensuring the continuation of leisure services until June 2029. The council expects to generate additional income through VAT recovery facilitated by the Agency Model.
The decision, made during a Cabinet meeting on Monday 14 July 2025, also includes a transition to an Agency Model to facilitate VAT recovery. This model will allow Sports and Leisure Management Limited trading as Everyone Active (SLM), to manage the leisure centres as an agent rather than as a principal for the purposes of collecting income of services to the public.
The move aims to provide improved financial returns to the council, with a portion of the additional income generated being reinvested in the facilities and efforts to reduce health inequalities. The transition to an Agency Model is expected to have minimal impact on customers, with the council remaining responsible for offering leisure centre memberships and services.
The Cabinet approved the variation to the Leisure Management Contract between the council and Everyone Active, as well as delegating authority to Councillor Cara Sanquest (Cabinet Member for Communities) to agree the terms of and approve the adoption of the agency model, subject to satisfactory completion of necessary due diligence. The Cabinet Report Part A - Leisure Contract Extension notes that the Cabinet will be asked to delegate authority to the Cabinet Member for Communities to agree the terms of and to approve the adoption of the agency model, subject to satisfactory completion of necessary due diligence.
Under the Agency Model, Everyone Active would become the council's agent for the delivery of leisure services, with the council providing leisure services to the public through its agent, SLM. This means the income would be non-business for VAT purposes, while Everyone Active would continue to provide services and staff to run the centres. A diagram illustrating the flow of funds in the proposed agency model for the Leisure Contract is shown below:
The Cabinet Report Part A - Leisure Contract Extension noted that the current agreement contains an allowable extension of up to 5 years. With the current agreement ending on 30 June 2026, an extension is needed to determine and implement any new agreement or management option, regardless of whether the Agency Model is adopted.
Prior to extending the contract with Everyone Active, the council considered alternative management options. An external consultant was commissioned in early 2024 to consider the future management model for the leisure service. Three core delivery model options were appraised in the report:
- Re-procurement of an external operator partner
- In-house management
- Local Authority Trading Company (LATC)
Insourcing was not considered to be a viable option because Westminster City Council currently lacks the resources to run this service internally, and the cost of provision is likely to be significantly higher if provided directly due to WCC's terms and conditions. Large specialist operators can achieve economies of scale by distributing central and specialist services across a wider network, leading to reduced costs and procurement efficiencies. These efficiencies also include but are not limited to a broader marketing capability and reach, leading to increase revenue.
