THE council is set to help bail out the city’s ‘at risk’ leisure centres battling to pay an expected half-a-million-pound hike in energy bills.
Worcester City Council has revealed it is looking to hand over up to £255,000 from its reserves to Freedom Leisure, which runs Perdiswell Leisure Centre, St John’s Sports Centre and Nunnery Wood Sports Complex on its behalf, to help cover the soaring cost of gas and electric.
Freedom Leisure, which is having to renegotiate its tariffs next month, said it expects bills to rise by at least £252,000 in this financial year but anticipates the cost of energy escalating by a whopping £506,000 extra over the coming years.
The council has ruled out a move to temporarily close one or more of its leisure centres as a way of reducing costs.
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A report, which will be discussed by the council’s policy and resources committee at a meeting in the Guildhall on September 6, said the leisure centres would be at risk if the council does not offer help.
“Freedom Leisure is facing increasing inflationary pressures that are adding to the running costs of the business and the scale of these were not built into the bid submission when the contract was let,” the report from council officers said.
“Without some form of intervention from the council, the operation of leisure services as currently delivered could be placed at risk.”
Freedom Leisure, which is more than halfway through its ten-year contract with the city council to run the leisure centres, said it is being hit by rising energy costs and inflation as well as being at risk by falling numbers due to the cost-of-living crisis.
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The council handed out £810,000 to support Freedom Leisure across the two years of the Covid-19 pandemic – including £410,000 refunded to the council by the government to help cover the cost of Freedom Leisure’s missing management fee
Discussions between the council and Freedom Leisure at the end of last year ‘did not raise any significant issues’ and council bosses expected to receive its annual £473,000 fee this year – and had set the city’s budget with that in mind – but by the start of the summer as warnings surfaced, councillors were told the fee was expected to be £124,000 short due to rising costs and reduced income.
Earlier this summer, struggling bosses at Freedom Leisure had asked for fees and charges at its leisure centres to be reviewed again in a bid to boost income – less than a year after prices increased by around three per cent – but the request was rejected by the council.
The council said it had turned down the plea as it had recently declared a cost-of-living crisis and was “actively seeking to support those on lowest incomes.”
The timing of another price hike would also have coincided with Perdiswell Leisure Centre returning from a three-month closure to finally replace its slippy floor tiles – the cost of which has so far more than doubled to £640,000.
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