Decision details

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

AGREED to:

·       note the considerable impact that the energy crisis continues to have on the leisure sector across the country;

·       note the continued good operational performance of the Fenland group of leisure centres managed by Freedom;

·       recognise the £4 return on investment that every £1 invested in sport and physical activity generates in England and as part of that return recognises the essential role that the Council's leisure facilities play in helping to maintain the physical and mental health of our community as highlighted;

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

·       agree to maintain the reduction in opening hours agreed in 2022 in order to continue to mitigate some energy costs in the leisure centres;

·       consider, and 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 maximum sum of £250,000 for the period 1 April 2023 to 30 September 2023. This represents 86% of the expected maximum excess energy cost, with the sum anticipated to be reduced by the continuing implementation of the mitigating measures put in place to reduce operating costs and energy consumption as detailed in section 12 together with any additional Government support for leisure centres energy costs. Any repayable loan shall become payable through an annual deduction 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 remaining contract period, with the past three years having been particularly difficult for businesses across the country and whilst the operational business has recovered well, there remains no certainty that excess profits will be made in the future; and

·       instruct officers, alongside other industry experts, with input from the energy market, to investigate the likely longer-term impact of the energy supply costs on the management of leisure facilities, reporting back to Cabinet with options that consider a longer-term approach to managing the situation. This report to be presented alongside a further report regarding Freedom Leisure and potential energy support for the remainder of 2023/24 and a review of ongoing actual costs to date.