Leisure operator fails
When a leisure operator running services on behalf of a council begin to fail, the council faces a difficult choice. It can either allow the operator to fail, potentially bringing any facilities owned by the council back in-house as a means of keeping them open, or it can choose to support the operator.
Either approach will involve costs to the council. The cost of supporting a trust with energy costs will vary according to the particular local circumstances and the approach of the council. Bringing a facility back in-house is likely to involve a far wider range of costs, including direct responsibility for utility costs. An example of these costs include:
- project management, legal, IT, marketing and other costs related to bringing the service in house
- utility costs
- maintaining facilities
- TUPEing* staff,
- pension liabilities
- potential redundancy costs
- potential recruitment costs to secure expertise
- re-tendering the services at a later date if applicable
- potentially replacing the facility in the long term since recent research shows that nearly two thirds of leisure centres are outdated and in need of urgent new investment.
*Transfer of undertakings (protection of employment)
There is also a significant cost to the community, as the services are likely to remain closed until arrangements can be put in place to reopen. This would also result in a loss of income during this period. More information on this can be found in the LGA guide to emergency insourcing of leisure services.
Impact on wider council priorities
There are a number of wider council-led priorities and statutory duties that are reliant on leisure facilities. For example, upper tier and unitary councils have a statutory duty for public health. This includes the improvement of the local population’s health by contributing to healthier lifestyles and mental wellbeing, and reducing health inequalities, obesity rates and physical inactivity. Leisure services play a key role in this agenda through direct initiatives such as exercise referral schemes, social prescribing and through their broader contribution to the health of the community. Furthermore, schools cannot deliver the statutory learn to swim and water safety curriculum without public swimming pools, with 72 per cent of primary schools relying on publicly provided pools.
Although not statutory, councils play a strategic role in determining and driving local economic priorities to increase economic growth, job creation and make local areas better connected, attractive places to live and work. Repurposing town centres to bring a better balance between housing, leisure, public services and cultural hubs, active travel routes and retail is one example of how councils are doing this. Thus, in the longer term the absence of a leisure infrastructure will have an adverse effect on the council’s progress for its public health and local economic priorities.
Leisure centres, especially those with pools, represent a very large percentage of the council's typical carbon footprint, making these facilities a priority for decarbonisation programmes. However, progress by leisure providers on green initiatives may need to be deprioritised in response to rising energy costs, which will affect councils targets to reduce carbon emissions.
Site closures
Cost saving measures that could be implemented to help mitigate the risks of provider failure and protect public leisure and sport services throughout the pandemic have been implemented in most cases. This includes the closure of sites that were old, in need of major repair works and not fit for purpose. Any further site closures that are implemented in response to rising utility costs could potentially result in sites that are in operable condition and financially sound closing, which would affect both communities and income levels.