Financial help will ensure LED Community Leisure facilities remain available for health and well-being of district’s residents.
East Devon District Council is being asked to help its leisure operator LED Community Leisure (LED) with an urgent additional subsidy of just over £732,000 following the severe impact of the coronavirus pandemic on its business operations.
LED runs nine leisure and fitness centres including swimming pools and sites such a tennis courts across the district on behalf of the council and has a membership of around 12,000 people, as well as ‘pay as you go’ customers. But its operations had to close down for three months from April to June due to enforced Government restrictions during the first Covid-19 lockdown and again during this second lockdown which began earlier this month.
LED, which is a charitable trust, lost around £1m turnover for every month it had to close and has had to draw on its reserves to cover its losses. The majority of its 500 East Devon staff were furloughed. It’s estimated that the business boosts the local economy by around £5m every year through the employment of its staff and giving work to local suppliers.
The council’s Cabinet decided unanimously at its meeting on Wednesday (Nov 11) to recommend that the council pays LED an additional subsidy of £732,275 to cover its net losses up to September 2020. Cabinet also agreed to subsidise LED’s further net losses from October on a monthly basis up until March 2021 with a maximum subsidy payment of no more than £1,339,000 in the current financial year.
It means that once the second lockdown is over, and if Government restrictions allow, the nine sites can operate once again. Mr Peter Gilpin, chief executive of LED thanked the Cabinet for their support, adding that it will be the residents of East Devon who will be the real beneficiaries in terms of their health and well-being during these difficult times.
Charlie Plowden, the council’s service lead for countryside and leisure, told the Cabinet that the leisure industry had been severely impacted by the pandemic due to the enforced closures and the complexities of reintroducing Covid-19 secure facilities and activities.
LED reacted swiftly and decisively to try and mitigate the impacts of the pandemic. They put in place a recovery business plan that up to the end of September helped to recover to about 70% of its expected income, which is a fantastic achievement. But challenges do remain, particularly with this further period of lockdown.”
Peter Gilpin, Chief Executive of LED, explained to the meeting that as a Community Benefit Society and charitable trust, all revenue and surplus goes back into providing facilities, services and new equipment. He said that LED provides activities for the benefit of the community. Swimming is a very popular activity and teaching children and adults to learn to swim is a vital life skill in coastal communities.
Our work also focuses on families, children, older residents, the unemployed, people on benefits and Universal Credit, so we serve a much wider community than the private sector. We put on a lot of community benefit activities that are not commercially viable and that’s why we require a subsidy from East Devon, particularly for the swimming pools.”
Cabinet is recommending to set up an LED Monitoring Forum of councillors which will meet monthly with the charitable trust to review its performance both operationally and financially.
The meeting heard that if the council ran the leisure services ‘in house’ it would have been able to claim back up to 75% of Covid-19 losses from the Government due to the enforced lockdowns. As LED is a charitable trust, it is ineligible to claim back for the losses. However, the Government announced last month that it had set aside £100m to support leisure centres and the council and LED hope to make a joint bid for funding, although this scheme is unlikely to cover the losses to date in full.
Peter Gilpin pointed out that by providing leisure services through a leisure trust the council was saving around £1m a year, and had done for 15 years now. Once the Covid-19 crisis was over, this saving would recommence for future years.
The Cabinet wants the council to ask its three district MPs to lobby Ministers to ensure that that leisure trusts, such as LED, receive Covid-related support funding in an equitable way to non-Trust leisure providers to ensure a level financial playing field. The Cabinet also wants to ask its MPs to set up an urgent meeting with the relevant Minister or preferably Secretary of State, where they, alongside representatives of the council and LED, can explain the difficulties facing both organisations.
Cllr Paul Arnott, Leader of the Council, said
We are very glad to have LED providing our leisure services, but we are mindful that this is a big call on council resources. Our negotiations with LED have been hard-headed and we have made it a condition of this support that a 10 councillor forum will now meet monthly to help steer them out of these choppy waters. We wish them all the best and are pleased that they accept that we will also be constantly scrutinising operations in the next year in the best interests of council tax payers."