Islington Council has extended the bailout of its leisure centre provider GLL for another six months - but redundancies haven’t been ruled out once the government furlough scheme ends in October.
GLL, the biggest leisure centre provider in the country which trades as Better, runs eight facilities in Islington which were all forced to close on March 20 because of the coronavirus lockdown, pushing it into a “zero income position”.
In May, the town hall agreed a package of financial support to ensure the charitable social enterprise didn’t “fail” due to the Covid-19 crisis.
Rent collection of £1.274million was deferred and the council committed to pay an amount - which has not been made public due to commercial reasons - towards GLL’s costs to maintain its Islington assets from March 20 until the end of June, after it asked for help.
Islington Council also paid the £195,000 contractual management fee up front, rather than at the end of June as specified in the contract, to support cash flow.
The measures were extended until the end of September, and now the council has rubber stamped recommendations to extend its financial support until the end of March 2021. The deferred rent and extra payment will be clawed back against any surplus profits GLL may make during the balance of the contract term, once its “losses” have been taken into account.
Five of Islington’s leisure centres have reopened since lockdown was lifted on July 25, with restrictions to ensure social distancing measures remained.
The Sobell Centre trampoline park reopened on July 29 with a limited programme, and some spa treatments recommenced on August 1. But according to a report written by the council’s head of leisure, Andrew Bedford, “there has only been a slow and steady increase” in numbers and “there was not a release of pent up demand that had been indicated by the market research”.
Swimming at Ironmonger Row Baths is popular, as are the fitness classes at Highbury and Sobell, but gym and fitness usage has been much lower than before.
“This may in part be due to the fact that so many people are working from home and people working in Islington form a significant part of the membership,” said Mr Bedford.
“This is particularly noticeable in the south of the borough.
“The uptake has been somewhat slower than anticipated as it coincided with both summer holidays and some very good weather which has prolonged the emphasis on people continuing with outdoor recreation in their parks.”
GLL furloughed most of its 200 Islington workers and as part of the scheme, claimed 80 per cent of their wages from the government up to £2,500 a month.
It has committed to topping up the remaining 20pc of their wages until the end of April next year, after which it has asked the council to step in and make up the difference.
In July, GLL offered all permanent members of staff the chance of an “unpaid career break” until the end of April as an “initiative to minimise redundancies”.
The current financial model assumes a full staff return in October - however, that came before stricter national Covid restrictions announced by the government on Tuesday (September 22) .
Mr Bedford said: “GLL have been clear that there will be a need to review their staffing structures and model at that point as the furlough scheme ends.
“It will depend on what they have been able to reopen and what programmes and activities they are able to run. They may have to look at redeployment and redundancy options at this point.”
Islington Council has nine years left on its 15-year deal with GLL which runs to March 2029, and says the contract “yields a significant revenue contribution”.
A spokesperson from GLL said the offer for employees to take six months unpaid leave is “a positive and proactive move to help mitigate the uniquely challenging environment brought about by Covid-19”.
They added: “The entire leisure industry, whether managed ‘in house’ by local authorities, by not-for-profit social enterprises like ourselves or private operators, is facing the same issues.
“If there are changes to staffing requirements in Islington these will stem from the need to keep the operation viable while observing customer capacity restrictions mandated by government.
Research from Community Leisure UK research indicates 48pc all public leisure facilities are at risk of permanent closure.
“GLL is working hard to try and keep as many public leisure facilities open as possible and to secure as many jobs as possible.
“We are working to rebuild our business and we hope the situation will change over the coming months. Our intent is to maintain a public leisure service for the benefit of Islington residents because we know that these are vital in supporting heath and wellbeing in the fight against Covid.
“We continue to lobby government for a £1bn rescue package for the UK leisure sector similar to that afforded to the arts and hospitality sectors.”
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