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Agenda item

Leisure Re-opening Subsidy - Sheffield City Trust/Places Leisure

Report of the Executive Director, Resources



The Committee received a report of the Executive Director, Resources, providing an update on the package of funding support provided in order to begin re-opening a number of leisure facilities operated by Sheffield City Trust (SCT) and Places Leisure.




The report indicated that the Covid-19 pandemic had had a significant impact on the facilities’ ability to generate income, and without additional funding from the Council, it would not be possible for SCT or Places Leisure to open any leisure provision in the City.




Present for this item were Councillor Mary Lea (Cabinet Member for Culture, Parks and Leisure), Councillor Terry Fox (Cabinet Member for Finance, Resources and Governance), Eugene Walker (Executive Director, Resources), Ryan Keyworth (Director of Finance and Commercial Services), Lisa Firth (Director of Culture and Environment) and John Warner (Trustee, Sheffield City Trust).




Lisa Firth stated that the proposals in the report had obviously been superseded following the statement made by Councillor Mary Lea earlier in this meeting.




Members of the Committee raised questions, and the following responses were provided:-




·                Sheffield City Trust (SCT) had presented Council officers, initially, and then Members, with eight options regarding the proposed re-opening of the facilities at Ponds Forge, with the cheapest and most expensive options including keeping all the facilities closed (£11 million) and opening all the facilities (£16.6 million) respectively.  The options in between represented a range of proposals in terms of what the Trust thought would enable the best access opportunities in terms of the facilities across the City.  As part of its deliberations, the Trust took into account the loss of income at some facilities, such as the English Institute of Sport (EISS) which received contributions from Governing Bodies based at the facility. 




·                The Aquatic Clubs’ contribution to the re-opening of the pool and diving facilities at Ponds Forge did not take account of the continuing repair and maintenance costs.  The contribution also included an element of crowd-funding, which could potentially have fallen on the Council if such funding was not forthcoming.  This was not deemed a feasible proposition given the number of users it would help, hence the request from the Council for a report on the proposals for the re-opening of all the facilities within the venue. 




·                There were no details in terms of usage figures of the gym at Ponds Forge, but it was confirmed that such figures were considered when the Trust looked at the eight options.  A detailed response on this issue would be provided to Members of the Committee.




·                There would be a negative economic impact if the facility was to re-open at the present time on the grounds that there were no events which would generate the required additional income.  Economic impact at the moment was negligible on the basis that spectators could not go to the events at the venue.  Behind all the current proposals was the Council’s Leisure Strategy, therefore whatever decisions were taken at the present time would lead into the Strategy, with a report on this being submitted to the Cabinet at its meeting on 23rd September 2020.




·                The Trust was reviewing usage of the City’s municipal golf courses, which included an evaluation of how many people had used them since they re-opened in early June 2020.  It was accepted that golf was predominantly a seasonal sport, and usage dropped off significantly around November.  The Trust and the Council was looking at how the courses could remain more cost-effective during the winter period.




·                James Biggin was asking, on behalf of the Aquatics Club, as to whether the club could assist the SCT, in a practical way, in connection with the re-opening of the facilities at Ponds Forge.  The Club had worked very closely with the Trust in the past, and would continue to work with the Trust in connection with the numerous operational issues, such as social distancing. 




·                SCT had looked at all the options with regard to Ponds Forge, from keeping all the facilities closed to re-opening all the facilities, and such options had been presented to the Council.  At that time, there had not been any plans for either Ponds Forge or Springs Leisure Centre to re-open.  Hopefully, the re-opening of the facilities at Ponds Forge would tie in with the other work in terms of re-opening the City Centre after the Covid-19 pandemic.  Several people who worked in the City Centre, together with other residents in the City, used Ponds Forge, therefore the Council wanted to re-open the facilities for them.




·                Members and officers were meeting with SCT on a regular basis, and challenging all the decisions being made.  The Council was assessing its priorities on an ongoing basis and, around 11th August 2020, the Council did not have all the information from the Trust.  There would be significant costs in connection with re-opening Ponds Forge, which would not simply include costs this year, but also ongoing costs going forward.  The Cabinet Members had requested officers to draft a report on the various options for re-opening the facilities, for consideration at the Cabinet meeting to be held on 23rd September 2020. 




·                Whilst the Council was not aware of any major structural issues with regard to Ponds Forge, the venue would require significant investment over the next five years, mainly with regard to backlog maintenance, and the Council would continue working with SCT on this issue. 




·                There had been some financial issues with regard to Ponds Force and other leisure facilities in the City for a while, which had been exacerbated by the Covid-19 pandemic.  The Council had assessed the position during lockdown, which had involved regular meetings with the Trust.  The loss of income due to the lockdown requirements had been the biggest issue affecting the Council’s budget, which also included losses through the venue having to remain closed during the pandemic.  A further problem had been that Trusts had not been able to apply for any compensation grants for loss of income from the Government, and the Council, along with other core cities in a similar position had been lobbying the Government on this issue.  Reports had been sent to the SCT Board, and assessed by the Council, which had led to a meeting of the Trust with Cabinet Members.  The issue had first been reported to the Cabinet in May/June, 2020, then referred to this Committee.  The issue regarding the £9 million had been reported to the Cabinet in July 2020 and, following this, the Council, in consultation with the Trust, had reviewed the initial impacts of re-opening in August/September.




·                There was a period when Ponds Forge was not able to open due to the Government restrictions regarding Covid-19, and the Council did not know when this period would end.  The Government then announced that leisure facilities could re-open on 5th July 2020, but, as with other Government announcements regarding the pandemic, it was very late, with very little notice.  The Council was aware at this time that it needed to find £11 million.  There were additional problems as the Council had to identify additional funding in order to implement the various safety measures, such as social distancing and additional cleaning.  This was further exacerbated by the fact that less visitors were allowed in to use the facilities.  There had been a decision taken by the Leader in June 2020, to commit additional funding to SCT, and it wasn’t until 11th August 2020, when the Council received all the information from the Trust, including the various models for each option in terms of re-opening. 




·                Several months ago, the Council and the SCT had jointly commissioned  consultants to look at the transparency issues with regard to the use of the £16.5 million.  The report submitted to the meeting of this Committee held in October 2019, was basically the final version of the report.  Since this time, working relationships between the Council and the Trust had tightened significantly, and Council staff were meeting with staff of the Trust more regularly.  The Council was keeping a very close eye on the Trust, whilst accepting that it was an independent organisation.  The Trustee in attendance confirmed that there was now regular dialogue between the Council and the Trust, with Trustees present, and that the Trust was also working in collaboration with the consultants.  The Trust was also working closely with the Council in connection with the backlog maintenance works.  There had been an increase in the level of scrutiny of the Trust’s finance function, and the Trust had collaborated with all relevant parties on this issue. 




·                The Council had just been through 10 years of austerity, managing to keep all its leisure facilities open during this time, whilst trying to ensure that SCT delivered the service on zero subsidies.  On the basis that this had been deemed unachievable, the Council had invested £2.8 million into the facilities.  The Council was currently working on its Leisure Strategy, which set out details of what facilities were needed in the City, and where, and how such facilities should be operated. 




·                The £16.5 million was a direct result of the loss of income for the City’s leisure facilities due to the Covid-19 pandemic.  The Council had originally put aside £2.8 million additional funding for the facilities prior to the pandemic.  It had never been the plan to offer £16.5 million to SCT prior to the pandemic.  The sporting venues were due to be handed back to the Council in 2024, as part of the terms of the original lease agreement signed in 1989.  As part of the Leisure Strategy, the Council would be looking at the best way of operating the facilities going forward, talking to Members and the Trust so that best value could be achieved.  All the City’s leisure facilities needed maintenance and, in some cases, redevelopment, and the Council was currently reviewing all the possible options.  It was hoped that a set of proposals could be submitted to Members, as part of the Leisure Strategy, prior to Christmas. 




·                Some of the £16.5 million would be used by the Trust to help fund the redundancies of some members of staff, with the redundancy programme being revised in the light of today’s announcement.  The present position would hopefully provide opportunities for the Council, as part of the Leisure Strategy, to make changes to how it invested in its leisure facilities.  Such examples include the facilities at Thorncliffe and Graves, and efforts would be made to develop better facilities in the future, which would be cheaper to run. 




·                Regular meetings had been held with those core cities in a similar position with regard to lobbying the Government on the issue of the grants to Trusts. 




·                The £16.5 million referred only to the re-opening of the facilities at Ponds Forge, and there would be no additional cost to the Council with regard to subsidising SCT in terms of Westfield Sports Centre, as this was a Trust-linked facility, and not Council-linked. 




·                It was likely that there would be a phased re-opening of most of the City’s leisure facilities, with little option to open in the immediate future.  Swimming facilities will be opening at Springs Leisure Centre in the near future and details of the phased re-opening of the other facilities, including Ponds Forge, would be included in the report to be submitted to the Cabinet at its meeting on 23rd September 2020. 




·                SCT was in a contract with Scarborough Borough Council, which was loss-making, and this Council did not want this situation to continue. 




·                There were plans for the City Hall to re-open as and when it was safe and feasible to hold events at the venue. 




·                SLC (Sport and Leisure Consultants) had been working with the Council on its Leisure Strategy, and this would be reported back to Members later this year, and would include costs and terms of reference for SLC. 




·                The position with regard to Heeley Baths had not been discussed as yet, but details of its proposed opening would be included in the report being submitted to the Cabinet on 23rd September 2020. 




·                The Council would be working closely with SCT up to the time when the leisure facilities were due to come back in-house, in 2024, in order to look at the best options.  There had been no direct conditions about the Trust handing the facilities back to the Council.  There were a series of complex agreements in place since the facilities were originally constructed, and there would be a number of implications if the Trust were to hand the facilities back, including financial and human resources.  The Council was currently working with the Trust in connection with the best course of action, and this work would feed into the Leisure Strategy. 






RESOLVED: That this Committee:-




(a)      notes the contents of the report now submitted, together with the responses to the questions raised;




(b)      thanks Councillors Terry Fox and Mary Lea, Lisa Firth, Ryan Keyworth, Eugene Walker and John Warner for attending the meeting and responding to the questions raised;




(c)      recognises:-




(i)             the problems caused by the impact of Covid-19 on the sports and leisure facilities across the City;




(ii)            the work undertaken by both Places Leisure and the Sheffield City Trust in providing excellent sports and leisure facilities across Sheffield, and welcomes the steps taken to open facilities in a Covid-19 safe way;




(iii)          that the situation faced by the City Council and the operators of the leisure facilities has not been helped by the Government’s decision to differentiate between local authorities that operate facilities through charitable trusts and those which operate in-house, when considering reimbursing lost revenue to the tune of 70p in the pound; and




(iv)          the socio-economic impact that the continued closure has across the City, both in jobs directly within the facilities, and within the wider economy;




(d)      notes the representations that have already been made by Councillor Terry Fox (Deputy Leader and Cabinet Member for Finance, Resources and Governance), Clive Betts MP and the other Sheffield MPs, along with Council officers to the Government regarding the decision to exclude Trusts from reimbursement of lost revenue;




(e)      welcomes the announcement that the Cabinet are to agree to provide additional funding to enable Ponds Forge to re-open for all, and calls on the Sheffield City Trust to work with the Council to review the options again, giving consideration to the proposals put forward by the Aquatic Clubs of Ponds Forge, and considering the wider economic impact of Ponds Forge remaining closed;




(f)       thanks the aquatic squads for their submission, and everyone who had contributed to drawing up the submission, and members of the public who have signed the petition to express their concern over the current proposals; and




(g)      requests that:-




(i)             a copy of this recommendation be sent to all the City’s Members of Parliament so that they may all take every opportunity to raise this matter with the appropriate Governmental Departments and Ministers, and asking that they reconsider the decision to exclude Trusts from the reimbursement of lost revenue, particularly considering the inherent inequalities that arise from the current policy; and




(ii)            whilst noting the concerning, but pre-Covid financial information recently reported in private to Members, this Board resolves to set up a cross-party Task and Finish Group to review “The Future of Leisure Services Past and Present”, to include the management and control of Sheffield City Trust and the relationship with the Council, and make recommendations through the Cabinet.


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