Scarborough Borough Council spent £271,000 supporting local leisure centres during the COVID pandemic.
The council owns the Scarborough Sports village along with the Whitby and Pindar Leisure centres, but contracts out the running of the centres to Everyone Active.
However during the pandemic the forced closures of the centres led the council to provide the additional support.
The Council outsourced the running of its indoor leisure sites to SLM (operating under the Everyone Active brand) in October 2015. SLM now operate the new Sports Village along with Whitby and Pindar Leisure Centres under a 10 year Leisure Operator Contract.
While the Council is not directly affected by the financial performance of SLM and, in normal operating conditions, would not receive funding calls should the company get into financial difficulty, SLM like many leisure providers across the country were severely impacted by the pandemic and the enforced closure of leisure centres. The risk to the council was that if the company no longer operated as a going concern then the council would have to take over the operation of the centres.
The Borough Council's Cabinet approved in Feb 2021 an indicative budget of £618k to support the ongoing viability of the Council’s leisure facilities for the 2021/22 year but in the end only £271k of that was actually used.
The Borough's corporate finance Manager - Kerry Metcalfe - says all three centres are now seeing increasing revenues and further support is unlikely to be needed.
There are still cost pressures for the council though related to the three Council owned leisure Centres in Scarborough and Whitby which between them are predicted to see a £114,000 increase in their energy bills next year.
While the centres are operated by Everyone Active, the council is responsible for any increase in energy costs.
The Borough's corporate finance Manager - Kerry Metcalfe - says it's a problem around the country.
A report presented to the Borough Council's Cabinet states:
"At this stage we are not expecting any additional financial implications for the council for the current financial year, however, for the 23/24 year initial calculations suggest that the additional cost implication for the council will be approximately £114k. This figure may fluctuate, once final energy prices are confirmed but are expected to be at this level."
"Colleagues at North Yorkshire Council are aware of the potential implications with the potential shortfall being built into the North Yorkshire Council budgets"
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