Agenda item

To provide an update regarding the cashflow and mitigation options of LeisureSK Ltd.

The Chairman of LeisureSK Ltd presented the report which provided an update regarding the cashflow and mitigation options of LeisureSK Ltd.  LeisureSK Ltd had faced operational difficulties in the last financial year due to increased supplier costs and the significant increase in the cost of utilities.  Although a management fee of £500,000 had been budgeted for in 2023/24, due to the difficult trading conditions during the previous year an additional management fee of £273,000 was approved in January 2024. 

Cabinet had also requested that LeisureSK Ltd compile a mitigation and recovery plan for the financial years 2023/24 and 2024/25 in response to the management fee request with a view to reducing the level of management fee for 2024/25.

The LeisureSK Ltd Board of Directors had made some immediate decisions in January 2024 to mitigate the financial position as listed at paragraph 1.7 of the report which included:

·       a recruitment freeze on all vacancies from January – April 2024,

·       a review of outstanding debts and payments to the Company sought from external hirers.  The Board of Directors of LeisureSK Ltd had also agreed to cease subsiding advance bookings/events.

·       The Council had been asked to explore the option of an overdraft facility for LeisureSK Ltd with the bank

·       Health walks which were popular throughout the District had been encouraged to be led by volunteers or by partner organisations rather than LeisureSK staff.

·       A range of energy improvements across the leisure centres which had resulted in the investment of pool covers and LED light improvements at Grantham Meres which had already resulted in a reduction in the utility consumption.

·       The Bourne roof and lights were on track to be completed over the summer and would also reduce utility costs.

·       The Council had been successful in their SALIX funding and the Grantham Meres would benefit from solar PV on the roof by March 2025 and a new heating system in March 2026.

·       Membership sales across the centres had been strong in 2024 with new sales increasing by 11.9% against the same period (January -July) last year and these were in line with the forecast in the budget.

A request was made to see membership/footfall figures for the last ten years to be able to compare figures.  It was stated that not all this information would be available as the previous contractor would hold the data which LeisureSK Ltd did not have access to.  However, what data was available would be compiled and circulated.

Ø Action

Data surrounding membership and footfall figures to be circulated to Committee Members for as far back as available.

The Chairman of LeisureSK Ltd was thanked for the presentation and it was felt that there had been an improvement in the operational running of the facilities.

One member felt that the continued suggestion that historical problems with LeisureSK Ltd were primarily due to significant costs and difficult trading conditions were misleading and contradicted by the committee's previous findings that there had been extensive failures within the LeisureSK Ltd board at the time.

At this point it was proposed, seconded and AGREED to go in to exempt session.