Agenda item

The Committee considered the report presented by the Health Improvement & Community Relations Manager which provided an update on the performance of Active4Today (the Company) for the financial year ending 31 March 2021.

An overview of the Company’s Final Accounts and Performance Update was contained in Appendix A and the Directors’ Report and Financial Statements Report for 2020-21 was attached at Appendix B to the report.  Performance overall had been decimated through the period due to lockdown requirements as directed by Government and the limited periods of restricted opening between the dates of 25 July 2020 to 4 November 2020 and 3 December 2020 to 31 December 2020 which offered little opportunity for the Company to make any serious inroads into the recovery process due to the stop start nature of the pandemic and its relationship with its customer membership base.  Whilst exceptional efforts were made by the Company to maintain the relationship with its Activo and Xperience members and users generally the operating model of a predominantly monthly direct debit membership base of customers had resulted in a significant downturn in income levels due to suspension of and in some instances cancellations of memberships. This was a direct consequence of the uncertainty of when restrictions would be lifted and business could return to something resembling the pre-covid leisure offer.  Despite the covid challenges the Company had done an excellent job in retaining approximately 70% of its membership base, (which was higher than the industry predictions, which ranged between 40% and 60%).  However, the 30% loss was higher than initially anticipated, due to issues of confidence within certain groups which were identified as being at higher risk to return to the centres, such as the 60 plus market, GP referrals and users with disabilities.  In addition, the impact of clubs not returning also had a negative effect, due to adult group participation restrictions driven by Government and the Sports National Governing Body’s (NGB) guidelines.  Pay and play income had also been lower than expected during the periods of opening, in comparison to previous years and this was mainly due to the initial restrictions from NGB’s impacting on club block bookings. 

Covid impacts reduced memberships from 11,991 compared with the corresponding period in the previous year down to 7,784 (A4T 5,169 and SLC 2,615) at year end.  In terms of usage the figures reported were even more dramatic with visits reducing to 262,324 across all sites compared to the previous year’s outturn of 1,189,899, a net reduction of 78% in total.  However, this position would not have been achieved without the work that the Company did around recovery plans to support members and users through the various re-openings and the need to have in place robust covid-secure safe systems of work to ensure returning customers were safe.

During the period 1 April 2020 to 31 March 2021, the financial statements at Appendix B to the report showed that the Company recorded a net trading deficit of £197,261 for the year, however, this figure reduced to net zero or a neutral position in effect following an equivalent transfer of funds from the Company’s reserves as previously reported to Leisure and Environment Committee.   Details of the financial outturn were covered in Section 3 of Appendix A to the report, however, in effect the trading position had been affected by a number of factors which included management fee payments made to the Company, savings achieved through reductions in operational expenditure, grant payments received through the furlough scheme, Covid Additional Restrictions Grants (ARG), Business Rates support grants, DCMS and Sport England’s National Leisure Recovery Fund (NLRF) grant and re-modelling of the staffing structure and resource allocation to return the break-even outturn.

Due to the transfer of funds from reserves the Company’s earmarked usable reserves, as at 31 March 2021 stood at £199,558 down from £396,819 on the balances held at 31 March 2020, a decrease of £197,261 as highlighted in paragraph 3.9 of the report.

A Member sought clarification regarding the number of furloughed staff.  It was confirmed that a skeleton team of core officers was retained for maintenance duties within the leisure centres and a staffing re-structure had been undertaken.  A written answer providing numbers of staff furloughed during the pandemic and staff that had left the company would be circulated to Members of the Committee.

AGREED      that:

(a)     the outturn performance of Active4Today in 2020/21, be noted;

(b)          the ongoing impacts of Covid on the Company’s performance be closely monitored and proposals to support the Company through the pandemic be brought to future meetings of the Committee;

(c)          the proposed Key Performance Indicators for Membership and Usage for 2020/21 and targets for 2021/22 (Appendix C) be noted; and

(d)          a written answer providing numbers of staff furloughed during the pandemic and had left the company would be circulated to Members of the Committee.