Fenland District Council is being asked to agree further financial support for Freedom Leisure to help Fenland's leisure centres bounce back following the lockdown period.
On March 20, the Government ordered all gyms and leisure centres across the UK to close due to the spread of COVID-19, leaving companies such as Freedom Leisure with significant ongoing costs but no income.
In April, the Council agreed to provide the leisure operator with an urgent financial rescue package to help ensure it could survive the lockdown.
Now the Council is being recommended to agree a second phase of financial relief to support the leisure centres as they get back to business.
The Government has indicated that leisure facilities may be allowed to reopen late July or early August, subject to social distancing measures being in place, but this is yet to be confirmed.
The Council's Cabinet is being asked to approve the additional funding for July to September at its meeting on Monday, June 29.
Speaking ahead of the meeting, Fenland District Council Leader, Cllr Chris Boden, said: "Leisure facilities will play an essential role in reconnecting communities and supporting people's physical and mental health once the current lockdown restrictions are eased, so it is important we do everything we can to protect our much-loved leisure centres and support our leisure partner through this challenging period.
"We have already provided emergency financial relief to ensure Freedom could survive this crisis and now we are considering a further package to support them as they begin to welcome customers back through the doors."
Cllr Sam Clark, the Council's Portfolio Holder for Leisure, added: "The leisure industry, like many industries, will need to operate differently moving forward to keep staff and customers safe. But we're committed to doing all we can to maintain the services we know people value and are keen to get back to, and helping people to stay active in this 'new normal'.
"The additional funding being considered would allow all four leisure centres to reopen at the same time, with a phased approach to opening times and facilities as demand increases and teams in place to build confidence in using the facilities again."
A report before Cabinet states that all 19 of Freedom Leisure's local authority partners have provided financial support to the trust during the coronavirus lockdown, and that all are considering this second phase of support during the reopening period.
The report also states that the Council's contract with Freedom saves the Council around £400,000 a year, equating to £5.6m of savings over the remaining 14 years of the contract.
Cllr Boden said: "Supporting Freedom not only helps to protect our leisure centres but it helps to protect the Council's finances too. Our financial forecasts show that the Council faces a continuing budget gap, with the need to find over £1million in savings by 2024/25 exclusive of our additional COVID-19 related costs and future funding uncertainties. If the Freedom contract ended and we took over the management of the leisure centres once again this would add significant additional cost to the Council."
In the meantime, the Council continues to lobby the Government for further financial aid to cover its COVID-19 related costs. The Government has already provided funding of almost £1.1million towards the costs, although further funding has yet to be announced.
Ivan Horsfall Turner, Freedom Leisure's Managing Director, said: "We recognise and appreciate the ongoing support we are getting from Fenland District Council. Without it we would be faced with a significant challenge in being able to reopen centres and deliver a leisure service for the Fenland communities. We look forward to reinstating the service and welcoming members and customers back to their local leisure centre."