Huge losses forecast on York’s leisure facilities?

The recent media focus in York about the new Community Stadium has tended to draw attention away from the City’s leisure centres. The future needs to be clarified as the pandemic seems likely to prevent their early reopening.

The centres have been managed by GLL “Better Leisure “ since 2017.

They took over the “Energise” facility on Cornlands Road, the Yearsley swimming pool and – more recently – the new Burnholme and Monks Cross centres. For a short time they had managed the  “Waterworld” facility at Monks Cross but it had closed against a background of declining attendances.

The decision to outsource the Council owned facilities was a controversial one. Essentially what had been a Labour controlled Council wanted to minimise the financial risk for taxpayers.  The deal that was set up gave the social enterprise provider ample scope to make profits from its new estate.

There have been continuing grumbles about the Energise/Better site with many feeling that charges are too high to be attractive in one of the less well off parts of the City.

In common with similar facilities elsewhere, GLL have been forced to close due to the lockdown (s).

This has presented them with the problem of ongoing expense but no customers. Most of their staff have been “furloughed” and buildings mothballed.  The much-delayed opening of the Monks Cross Community Stadium site has added to their woes.

It remains to be seen whether compensation could be payable – and to whom – for the delayed building works.

The Council pays GLL a management fee. Sources within the Council have said that GLL are now seeking compensation for their ongoing losses.  

Apparently, the Council have submitted a claim for £399,000 to Sport England who had offered to support leisure operators. This may not be enough to cover the deficit. The Council and GLL are currently undertaking an “open book” review.

Any decision to provide additional financial support from the Council would require a decision from Councillors. Several Councillors – as users of the  leisure facilities – would be debarred from voting on any such decision.

There is another body of opinion which thinks that the local authority should bring the facilities back under its direct control.

It seems that the Community Stadium saga has allot further to run.

York Council social enterprise company crashes

We warned in 2013 (click) that the Council plan, to hive off some social care services to a new company, were “highly risky”.

The plan was to start a “Be Independent” social enterprise to run warden call and disabled equipment loan services.

Most of the income for the new organisation would still come from the Council. It was claimed though that it could complete for other business thereby reducing the demands on taxpayers.

5 years later and it is clear that the company has failed. This is not entirely surprising as the draft  “business plan” (still available to view here “on line”) published in 2013 actually forecast that the operation would be loss making

A report the Council’s Executive next week suggests that the service be brought back under the Councils direct control.

The number of customers using the service has fallen from 2878 to 2448, about half of which are subsidised by the Council.

“Be Independent” have failed to win any new contracts during the last 5 years and lost an existing contract with the NHS to provide equipment services in the Vale of York.

The company is now loss making.

In the last financial year, it recorded a working deficit of £167,000.

If the work transfers back to the Council it will cost taxpayers an additional £95,000 a year.

One of the negative aspects of hiving off activities is that some jobs get a pay hike. The Council says that staff at “Be Independent” in the main enjoy the same conditions of service as Council employees. TUPE would therefore apply to any transferees.

The Council report fails to identify the salaries being paid to all staff although £273,000 pa is listed as “Directors remuneration”. (The latest accounts registered with Company House for 2017 list Directors remuneration as £106.443).

There was until last year one CYC appointed Director (Cllr Funnell) but this appointment was terminated on 31st March 2017. It is unclear who has been charged with safeguarding the Councils interests on the “Be Independent” board since then.

There is no comparison in the papers between the 2013 business plan and outturns.

External legal advice is apparently  being taken by the Council.

York Council housing at risk

The York Council has decided to spend £200,000 surveying views on whether to ditch its Council house management  responsibilities.

council-housing-at-risk

Some Councillors want to transfer management of the homes to an independent company as was done in Leeds.

We think that they are wrong.

When polled 15 years ago on a similar proposal tenants voted overwhelmingly to retain the York Council as a landlord.

More recently, when asked whether they were satisfied with the Council as a landlord 89% said that they were.

The housing account currently shows a surplus although government policies could change this in the medium term. Central government sets rent levels (which they are reducing as a way of controlling benefit claims).

They also plan to sell off some Council houses, when they become vacant, to the highest bidder as a way of balancing their books. The Liberal Democrats have started a petition opposing this “sell off”. Click here

They also intend to charge “commercial rents” to tenants that they regard as “wealthy”. This plan, at least, wasn’t taken into account in a gloomy and selective officer report which prompted the outsourcing plot.

The plan was opposed by Andrew Waller and a Green Party Councillor when debated by the Council’s Executive but slipped through anyway.

The resulting turmoil and indecision will be exacerbated by the resignation of the Head of Housing Services. His post will be filled on a temporary basis via an internal appointment.

All in all, we think that the Council has more pressing issues to address.

They should abandon this plan which is a waste of time and money