Agenda item

To consider possible approaches to mitigating the excessive energy costs currently being placed on Freedom Leisure and options to support Freedom with such costs.

Appendix 2 to this report comprises exempt information – to exclude the public (including the press) from a meeting of a committee it is necessary for the following proposition to be moved and adopted: “that the public be excluded from the meeting for Items which would involve the likely disclosure of exempt information as defined in the paragraphs 3 of Part 1 of Schedule 12A of the Local Government Act 1972 (as amended) as indicated.”

Members considered the Freedom Leisure Utilities report presented by Councillor Clark.

Councillor Hoy commented that this is not an ideal situation, but it is good that we are keeping swimming pools open when they are closing in other areas. Swimming is a vital life skill for children, and in her view this is good use of taxpayer’s money.

Councillor Tierney said it is a disappointing situation to be in and he did not support the initial plans for the centres to be run by Freedom Leisure; things can be handled in different ways so he does not accept that the position would be the same if the Council was still running them. Freedom sold themselves as experts in their field, but they always come to the Council when they hit problems. He does not want the Council to be seen as a soft touch, but he agrees with Councillor Hoy. Not only is it vital for people to have access to swimming lessons, but it also combats loneliness, particularly for the elderly.  Also, few people could afford to go private. In his view, this is a good plan to mitigate the problems; the Council has financial difficulties of its own so cannot go too far but it must be made clear that Freedom cannot expect the Council to bail them out every time there is a hiccup.

Councillor Boden said it should be noted that Freedom Leisure is a charitable trust so does not make any profit.

Councillor Mrs French said she disagreed with some of Councillor Tierney’s comments. A lot of additional children are coming into the district, and we cannot put them in jeopardy. Leisure centres are so important and must be kept open.

Councillor Mrs Laws said she agreed with Councillor Tierney’s comment that the Council should not be the first port of call over finance, but Covid did a lot of damage to sports facilities, and we are all facing financial pressures. However, it is so important to have the leisure centres open, particularly swimming pools, not only for swimming but for health and social benefits. Although she appreciates this is taxpayers’ money it is a good investment for our residents.

Councillor Murphy said Councillor Tierney was spot on. We have a good plan in place, we cannot afford to shut anything down and agrees the Council should carry on with the options we have.

Councillor Count said that this is one of the services that the Council provides but it is not in the statutory category. We have the right match in that there are four leisure centres in the four towns and this paper provides us with a way forward in difficult times for everyone. Councillor Count said he finds the report to be fully prepared and researched. He is in support of all the options, some of which are an investment for the future, i.e., energy performance, and others are a reaction to the current situation. His only concern is the facility of a loan; because Freedom operates a large area, they may be at risk if other areas do not behave in the same way this authority is planning to. Therefore, the way that the loan is structured should provide protection and the terms and conditions must be right.

Councillor Boden said the Council has been keeping abreast of Freedom Leisure and the other areas they deal with. To the best of his knowledge, Fenland District Council is the only authority issuing loans rather than grants. It seems appropriate for the Council to be able to get recompense from Freedom Leisure if later we need to do so, hence the loan. It is not fixed, the Council has no charge over the company, but if they come through this and the rest of the period of the contract is successful, then we will get a larger proportion of that funding back then would otherwise have been the case.

Proposed by Councillor Clark, seconded by Councillor Boden and Cabinet AGREED to:

·         note the considerable impact that the energy crisis has had on leisure businesses across the country,

·         note the good work being carried out by Freedom Leisure in the leisure centres following the Covid pandemic, particularly with regard to the increased number of children on the learn to swim programme every week,

·         recognise the essential role that the Council's leisure facilities play in helping to maintain the health of our community,

·         recognise the significant financial challenges that the Council itself is facing,

·         Option 2 (Section 9) - changes to opening hours for the 4 centres from 1 December 2022-31 March 2023, saving Freedom approximately £45,000.

·         note Option 3 (Section 9) regarding energy billing adjustments saving £27,000.

·         note Option 4 (Section 9) regarding the pending NNDR relief application.

·         advise officers to add items at Option 5 (Section 9) on additional Solar PV (£350,000) and swimming pool LED lighting (£40,000) to the Council's Capital Programme and adjust the programme as per Option 6.

·         note the price rises as set by Freedom in Option 8 (Section 10) of the report and agree the above CPI rises for swimming for children and concessions.

·         delegate to the Section 151 Officer, working in consultation with the Portfolio Holders for Finance and Leisure, to offer direct financial support to Freedom Leisure in the form of a repayable loan, on an open book basis, up to a sum of £281,254, reduced by the implementation of any of the mitigating measures as set out in the Options table in the report.

            Any repayable loan shall become payable through an annual deduction of 75% of any profit generated in excess of the levels predicted in the Leisure Operators Base Trading Account (LOBTA). This is a change from the current 50/50 profit share, and will be subject to the performance of the business over the contract period.

(Councillor Clark declared that she is a member of the Freedom Leisure Centre).

(There was an exempt appendix to this report but there was no requirement to enter into exempt session for this item).