Operator of venues including Ironmonger Row Baths is in financial trouble, reports Ed Sheridan, Local Democracy Reporter
Islington Council has agreed another bailout for leisure centre operator GLL, despite concerns over a “significant financial risk” were the company to fail.
The town hall last year deferred GLL’s rent payments for the initial lockdown between March and July 2020, amounting to £1.2million, as well as paying an undisclosed amount towards the maintenance of its assets.
Following a second deferral last September, the council has now decided to postpone payments for a third time – in a year that GLL has predicted will be even more challenging.
The council has not provided the exact figure for the second and third deferrals because of “commercial sensitivity”. Health and social care boss Nurullah Turan said: “Membership levels have fallen significantly and are significantly lower than pre-lockdown levels, so a further period of support is required to allow GLL to be able to open the leisure centres when they are able to.
“Once they are open, GLL will not require further direct financial support fromm the council and will be able to operate as they used to.”
Leisure centres reopened last July, but the second lockdown between November and early December “dented” customer confidence, according to a council report, and eradicated “small signs of growth”.
Centres closed once again with the third lockdown in January and they still remain closed, with no date set for reopening.
Outdoor sports are able to start up again from Monday, and the town hall is to review with GLL the feasibility of reopening sites including Market Road Football Pitches, but indoor sports and group exercise will not return any earlier than 17th May.
During the third lockdown, GLL’s centres across the borough, including Ironmonger Row Baths in St Luke’s, have been in “deep hibernation”, according to the council, with a small skeleton staff carrying out building checks and inspections.
The town hall has recovered only a proportion of the lost rental income from GLL through central government support. The company predicts that if centres reopen for individual gym exercise and swimming in April, it will initially trade at around 30% of pre-Covid levels, but hopes this will reach 80% by March 2022.
The challenging times for the company and the questions it raises for local government finance are exacerbated by concerns over the hit to people’s health and wellbeing from the impact of Covid-19 and lockdown.
The town hall’s report on the decision to extend support added: “One of the ongoing concerns is the financial position of GLL as an organisation. If GLL were to fail as an organisation then the leisure provision would have to move in-house initially, which would pose a significant financial risk to the council.”
A GLL spokesperson said: “Leisure has been significantly impacted by Covid-19 and operators across the country have agreed support with local authority partners to maintain vital public leisure services.
“With the continued support of council partners and the wider national recovery fund we are able to start reopening our outdoor leisure facilities on Monday 29th March and indoors from Monday 12th April, which is great news for the health of the nation.
“While this report acknowledges it will take time to recover business to pre Covid levels, GLL’s financial position is secure going forward.”