Parliamentary debate: Government support for leisure centres

• Councils in England are currently the biggest funder of sport and leisure services and facilities. When combined with parks and green spaces, councils currently spend over £1.1 billion a year and are responsible for 2727 leisure centres; a majority of the UK’s 27,000 parks; 31 per cent of grass pitches; 33 per cent of all swimming pools (this 33 per cent accounts for the majority of publicly accessible pools); 20 per cent of health and fitness facilities and 13 per cent of sports halls.  
• Leisure operators face bills up to 200 percent higher this year compared to 2019 (the last normal operating year), with costs set to grow by up to 240 percent next year. In October, ukactive research found that 40 percent of council areas are at risk of losing their leisure centre(s) or seeing reduced services at their leisure centre(s) before 31 March 2023. Without government intervention, large numbers of public sector leisure facilities are unlikely to make it through to next spring, with service restrictions and facility closures already growing.
• The LGA and ukactive have recently produced a briefing note for councils and leisure operators that provides information, good practice and examples of practical support, to help ensure service continuity and avoid failure/closure of leisure services during the cost of living and energy crisis.
• Urgent support is needed to secure the long-term sustainability of public sport and leisure services and ensure that every community has access to affordable, quality services. This must comprise a combination of immediate revenue support to prevent market failure in the face of rising energy costs, plus longer-term access to capital funding to accelerate the transformation of the estate into an energy-efficient, sustainable service that will meet the needs of communities for years to come. The sector has developed innovative and practical solutions to the energy challenge – it now needs support to roll this out at pace. 
• Councils face inflationary pressures and rising demand across all services. As higher proportions of council budgets are absorbed by statutory and frontline services such as social care, their ability to maintain levels of service provision in sport and leisure is increasingly under pressure. Along with sporting partners like ukactive, we have called for discussion of the following options for offsetting these immediate financial pressures in public leisure: 
  • An increase to the local government settlement from 2023/24 that reflects current cost pressures to protect public leisure facilities from cutbacks. 
  • An immediate review of sector taxation and regulation that minimises other outgoing costs, with longer-term business tax reform to collectively support the sustainability and growth of the sector.  
  • Bolstering support to help leisure facilities to transition to non-carbon intensive heating methods, to improve energy efficiency and make facilities more sustainable in the long-run. This should include opening up existing capital funding programmes, such as the Public Sector Decarbonisation Fund, to new build leisure facilities. Over two thirds of leisure facilities are past their replacement date and retrofitting them would not offer value for money.
• The Treasury has reviewed the Energy Bill Relief Scheme to decide which businesses and organisations will be eligible for Government support with energy costs beyond March 2023 and replaced with the Energy Bills Discount Scheme. In a change to policy, the Government is now including public sector organisations in the new scheme meaning all councils will benefit and it extends the scheme for a further 12 months. However, leisure centres and swimming pools have been deemed not to require extra support under the scheme’s higher level of support for businesses in sectors identified as being the most energy and trade intensive. This is counter to the evidence submitted to the review. This is likely to lead to widespread closures across the country. We encourage councils to write to their local MP to raise their concerns about the impact this will have on their communities and leisure services to further highlight the issue to the Government and to seek its urgent support to secure the long-term sustainability of public sport and leisure services and the transformation of the sector.

Council sport and leisure services provide a unique offer, supporting affordable, universal and targeted services, and activities, that are simply not provided for elsewhere at such scale. Councils run the services that communities need, that are often not provided within the commercial sector as they are not profitable. Council funded services provide the facilities, pitches and parks that are relied upon by:

• elite athletes
• seventy-five per cent of grassroots clubs
• seventy-two per cent of schools who use public swimming pools to deliver their statutory responsibility for learn to swim and the water safety curriculum
• two thirds of the NHS for cancer rehabilitation
• seventy-nine per cent of social prescribing programmes and performance sports such as swimming.

Public facilities often provide free or discounted membership to those members of the community who may not otherwise be able to afford access to activities, whether the unemployed, families on low incomes, veterans, or disabled residents.  Their value creates multiple wider benefits such as:

• Savings accrued from being physically active amounts to £9.5 billion per year. £5.2 billion of this is in healthcare savings and £1.7 billion is in social care savings. A further £20 billion of value comes from stronger and safer communities.
• It provides an estimated 585,000 jobs in the UK, providing opportunities for young people who make up a large proportion of the paid workforce: 45 per cent are aged 16-24 and 21 per cent are aged 25-34.
• Swimming saves the healthcare system £357 million per year.

There is no statutory requirement for councils to provide these services but they do so on a discretionary basis because they recognise the immense value of these services and infrastructure to their communities.  

Our joint report with the Association for Public Service Excellence (APSE) and Chief Cultural and Leisure Officers Association (CLOA) ‘Securing the future of public leisure services (2021), found that fundamental systemic issues with the funding of public sector sports and leisure provision have been building over the past decade and have been hugely exacerbated as a result of COVID-19.

Councils receive no dedicated funding from government to provide sports and leisure services and facilities. Prior to the pandemic, the sector had to deliver significant budget reductions due to overall reductions in local government’s core funding, which resulted in a shift of focus to parts of the service which can generate income. While funding was stretched, services in most areas prior to the pandemic were largely self-sustaining in their day-to-day operations, and sometimes generated income that could be invested in other public services.

However, there were significant challenges in generating adequate capital investment (for example, for replacing old facilities) and the reliance on income generation to fund services, rather than council core funding, made them significantly more vulnerable during the pandemic, when closures and reduced footfall impacted revenue. Worryingly our previous research found that when sport and leisure services are forced to make cuts it is often the ‘added social value’ activities – social prescribing activities, targeted outreach at less active groups, and discounts for community or grassroots clubs – that are likely to be reduced as services focus on their income generating activities, which is based predominantly on the provision of gym equipment.

Given public leisure facilities’ reliance on income generation, the pandemic had a critical and destabilising leisure providers’ finances. While the government provided a significant amount financial support for the sector through the National Leisure Recovery Fund, the quantum of funding only covered a small proportion of the losses providers and councils incurred. Despite also facing significant cost-pressures, councils used their own funds to save their leisure facilities from closure and provided £159 million emergency funding in total.  Leisure providers also contributed £144 million from their reserves (based on estimates by Sport England from the data collected as part of the evaluation of the National Leisure Recovery Fund). With many providers having used up their reserves, operators were particularly vulnerable going into the current energy crisis. 

Leisure operators face bills up to 200 percent higher this year compared to 2019 (the last normal operating year), with costs set to grow by up to 240 percent next year. Without government intervention, large numbers of public sector leisure facilities are unlikely to make it through to next spring, with service restrictions and facility closures already growing.

In October, ukactive ran a consultation with their members and asked them to risk assess the current threat to their facilities. The findings showed:

• 40 percent of council areas are at risk of losing their leisure centre(s) or seeing reduced services at their leisure centre(s) before 31 March 2023
• Three quarters (74 percent) of council areas are classified as ‘unsecure’, meaning there is risk of the closure of leisure centres and/or reduced services before 31 March 2024.

Key findings from one of the most in-depth member reviews ever undertaken by Community Leisure UK found that:

• In Wales, 82 percent of their members are at risk, ranging from those that are in crisis now to those that can see the crisis point on the horizon.
• In Scotland 89 percent of their members are at risk, ranging from those that are in crisis now to those that can see the crisis point on the horizon.
• In England, 75 percent are at risk, in crisis or heading towards crisis with 21% currently in discussions and planning around the impact of closures.

In addition, Sport England’s Future of Leisure shows that:

• Public participation in public leisure has reduced by 35 percent between April 2021 and January 2022
• 68 percent of sports halls and swimming pools are over 20 years old
• Those sites refurbished in the last 10 years are seeing a throughput recovery of 68 percent compared with a recovery of 62 percent for those last refurbished 20 or more years ago.

This suggests that that investment in newer facilities creates spaces that have greater appeal, increases user confidence levels and provide a more relevant offer to meet the demands and needs of communities.

Councils are the biggest collective funder of sport and leisure facilities and services. It is local government’s core funding that keeps the UK’s sport and leisure infrastructure running. Yet councils are facing considerable inflationary pressures and rising demand across all services. As higher proportions of council budgets are absorbed by statutory and frontline services such as social care, their ability to maintain levels of service provision in sport and leisure is increasingly under pressure.  Long-term sustainable funding for local government is fundamental to maintain and improve communities access to public leisure facilities, upgrade the aging leisure estate so it is fit for the future, and maximise the social and economic benefits of sport and leisure services.

Along with sporting partners like ukactive, we have called for discussion of the following options for offsetting these immediate financial pressures in public leisure: 

• An increase to the local government settlement from 2023/24 that reflects current cost pressures to protect public leisure facilities from cutbacks.
• An immediate review of sector taxation and regulation that minimises other outgoing costs, with longer-term business tax reform to collectively support the sustainability and growth of the sector.  
• Bolstering support to help leisure facilities to transition to non-carbon intensive heating methods, to improve energy efficiency and make facilities more sustainable in the long-run. This should include opening up existing capital funding programmes, such as the Public Sector Decarbonisation Fund, to new build leisure facilities. Over two thirds of leisure facilities are past their replacement date and retrofitting them would not offer value for money.

The Treasury has reviewed the Energy Bill Relief Scheme to decide which businesses and organisations will be eligible for Government support with energy costs beyond March 2023 and replaced with the Energy Bills Discount Scheme . In a change to policy, the Government is now including public sector organisations in the new scheme meaning all councils will benefit and it extends the scheme for a further 12 months. However, leisure centres and swimming pools have been deemed not to require extra support under the scheme’s higher level of support for businesses in sectors identified as being the most energy and trade intensive. This is counter to the evidence submitted to the review. This is likely to lead to widespread closures across the country. We continue to raise our concerns with the Government and the need for additional support for the leisure sector. We encourage councils to write to their local MP to raise their concerns about the impact this omission will have on their communities and leisure services to further highlight the issue to the Government and to seek its urgent support to secure the long-term sustainability of public sport and leisure services and ensure that every community has access to affordable, quality services. This must comprise a combination of immediate revenue support to prevent market failure in the face of rising energy costs, plus longer-term access to capital funding to accelerate the transformation of the estate into an energy-efficient, sustainable service that will meet the needs of communities for years to come.

The review is not considering public sector organisations for support within the Energy Bill Relief Scheme. That means that where councils have commissioned private providers or charities to run their sport and leisure facilities, these services will potentially be able to receive support from the scheme beyond March 2023. However, where councils have chosen to deliver sport and leisure facilities ‘in-house,’ these leisure centres will be excluded from financial support, despite facing the same cost pressures.

Government must ensure that communities are not disadvantaged simply because of the delivery model of their local sport and leisure services. It is vital that Government provides councils with in-house services with equitable support to prevent leisure facility and service closures.

Leisure and sports facilities, especially swimming pools, have particularly high energy demands, making them particularly vulnerable to price increases. Prior to the pandemic, research by Sport England found that at least two thirds of facilities are past their replacement date, meaning they are highly energy inefficient. For some councils, leisure facilities account for up to 40 per cent of their overall direct carbon emissions.

Many councils are prioritising decarbonising their facilities to deliver efficiencies, including building new ultra-low carbon facilities. Exeter City Council’s Passivhaus leisure centre is one example of this. However, these measures require significant investment and do not address immediate pressures across the sector. Current government funding streams, such as the Public Sector Decarbonisation Fund, also focus on retrofitting buildings and are therefore unsuited to much of the leisure estate which needs replacing to meet communities’ needs now and in the future.