Mansfield District Council says it is business as usual after troubled outsourcing giant Serco pulls out of managing the town’s leisure services

Labour Councillor Martin Lee has expressed his concerns after Serco announced it was selling its contract to manage the council’s leisure services, just two years after it was awarded it.

Coun Lee said he is concerned the authority has no knowledge or control of who would eventually take control of leisure services and feared the role will be sold to the highest bidder.

He said: “I always have concerns in these situations about the level of quality of services our customers will get.

“To have contracted away the way our services are managed should never have been done in the first place.”

“Serco have made this decision over the last few weeks because of their bad financial situation.”

Coun Philip Shields, Portfolio Holder for the Environment at Mansfield District Council, said a process was underway to identify a preferred buyer and discussions with Mansfield District Leisure Trust and Mansfield District Council will follow.

He said: “The change in ownership will have no impact on the service delivered on the ground; the same quality service would be delivered by the same centre staff and management team.

“Meanwhile, it is business as usual until the matter is resolved.”

A Serco spokesperson added: “Serco recently announced that it is looking to dispose of its leisure business as although it is a good business with a strong future, it does not fit with the company’s future strategy, therefore we feel it will be better placed to develop under new ownership.

“We are in regular communication with the Council and the Leisure Trust regarding this process, and in the meantime we will continue to deliver the high quality of service customers rightly expect from us.”

Serco say staff will transfer to the new organisation which buys the Leisure business, subject to the sale being agreed.

For commercial reasons, it was not appropriate to discuss the criteria Serco would use to decide on a potential buyer for the business.

Serco’s announcement comes as it declared a profit warning and asked shareholders to bail it out with a £550 million cash call of newly issued shares.

In a scandal-hit 2013 Serco was forced to refund the Government £68.5 million for overcharging on criminal tagging contracts and repay £2 million of past profits from a prisoner escorting contract.

It was forced to write-down the value of its business by £1.5billion - the whole company’s market value previously stood at £1.7bn, and now stands at just under £850m.

Following a strategy review of the business, Serco’s chief executive Rupert Soames announced that Serco’s future strategy will be to focus on providing services to Governments in five core sectors: Justice & Immigration, Defence, Transport, Citizen Services (public sector BPO) and Healthcare.

He said Seco’s leisure business is a good business with a strong future, but it does not fit with the company’s future strategy. As a result, Serco will be looking to dispose of the Leisure business, along with the Environmental Services business and the majority of our private sector business process outsourcing (BPO) business.

Serco will retain its public sector BPO business which works with local councils and other public sector organisations.·