Thanet councillors are likely to agree plans to give financial help to Your Leisure as it struggles amid covid restrictions.
Your Leisure operates Margate Winter Gardens, Theatre Royal, Margate and Ramsgate leisure centres, Northdown House and manages beach huts along the Thanet coastline.
But income began to fall in February last year as the pandemic started to unfold and since the national lockdown in March both theatres have remained closed and leisure centres had limited operations in the periods when the toughest restrictions had been lifted.
The leisure trust now faces serious financial struggle with trading income down by £1.28million in 2020 compared to 2019 and outstanding liabilities in the region of £8m in terms of loans for Hartsdown and Ramsgate leisure centres.
Thanet council is to discuss options to help keep the company afloat including approving a loan to Your Leisure of between £700k-£1.5m; providing additional funding of £230k plus VAT to the Winter Gardens to ensure that it can reopen and operate from October 2021 by being able to replace and relocate the boilers; and explore with Your Leisure the potential to refinance, through council prudential borrowing, the existing loans in respect of the leisure centres.
The council is also expected to agree to extend the current agreement for the leisure trust to manage the Theatre Royal until April 28, 2022. Funding for both the Winter Gardens and Theatre Royal has also been applied for under the Margate Town Deal.
A report to Cabinet members, who will discuss the issue on Thursday, says: “The financial impact of Covid on YL is evident. The facilities and services they provide have been forced to close for ten months now, and despite the partial reopening of the leisure centres there is substantially reduced income through meeting social distancing guidelines.
“Whilst substantial effort and actions were and continue to be taken to mitigate the impact, YL faces an uncertain future and the possibility of insolvency and liquidation. In turn the council faces the prospect of facilities and services not reopening in the future and having to seek alternative arrangements to provide the services currently delivered by YL. The current climate will create challenges in finding a replacement operator particularly with the existing loan and pension liabilities.”
The council, as guarantor for the leisure centre loans, could also face extra penalties if the loans are redeemed early. Your Leisure currently repays around £600,000 per annum.
The report adds: “Over and above these loans there is also a liability attached to pensions of between £2m and £5m as well as various other liabilities should Your Leisure cease trading.”
Efforts to survive
Your Leisure has worked to contain the financial impact with use of the Coronavirus Job Retention Scheme (CJRS). It also gained £200,000 in grants from the Coronavirus Retail, Hospitality and Leisure Grant Fund and secured short-term financial support from its bankers with an £800,000 loan via the Coronavirus Business Interruption Loan Scheme (CBILS).
The leisure trust has taken advantage of the deferral of the March 2020 VAT liability which is now due to be paid in March 2021 and negotiated an instalment arrangement with HM Revenue & Customs for the payment of PAYE liabilities.
The trust has also negotiated payment holidays on rent, loan and utility liabilities and secured additional and advanced funding from local authority partners.
An application for £930,000 grant funding through the Cultural Recovery Fund was submitted although the amount granted was £332,000 and a crowd-funding page for Margate Winter Gardens and the Theatre Royal was also launched.
Several of Your Leisure’s hospitality staff were also made redundant last year.
The leisure trust had a cash balance of £806,529 as of January 12.
Leader of Thanet District Council, Cllr Rick Everitt, said: “As the report rightly states, the financial impact of Covid-19 on the leisure and entertainment industry has been profound. If the council doesn’t act now we could be faced with the prospect of many local services having to cease operation. This could have far reaching long-term effects given the health inequalities we see within our district.
“There would be significant financial implications for the council, whether we took services in-house, were able to identify an alternative provider or allowed them to cease altogether. There is no risk-free option here.
“Whilst we welcome the recent Government financial support to the leisure sector it doesn’t go nearly far enough and only applies from 2 December 2020. This doesn’t address many months of financial loss before that, given the first national restrictions were imposed in March 2020.
“At this point all of Your Leisure’s facilities and services were required to close and consequently their customer income ceased. Whilst some services have reopened, customer confidence remains low and there is significant uncertainty around when the latest national restrictions will lift.
“The council has worked closely with Your Leisure throughout the pandemic to understand the challenges they have been facing and has confidence in the management’s approach.
“Supporting a Thanet business, which employs many local people and in turn protects the health and wellbeing of so many of our residents, who really value the services provided, has to be a priority and this will be considered when the Cabinet meets on Thursday.”
The Cabinet meeting takes place online on Thursday (January 28) at 5.30pm.
Even pre-Covid, Your Leisure were in trouble. An annual loss of approaching £250,000 in the year ending March 2020. Get the feeling this will be a business that TDC are propping up for years to come.
It’s worth propping up imo, but I should point out that many shows at both Margate theatres are sell-outs in normal times (I usually attend at least half a dozen per year myself).
Yes the status quo is of endless propping up ,
I beg the question why is a haemorrhaging operator seen as beneficiary of the public’s money.
Have them out and welcome a new era , with switched on proactive operators seizing the premises lease and breathing life into the venue ,
Failure and haemorrhaging millions isn’t a victory for the people of Thanet, have them out and seize the festival culture with fresh investment, the gardens themselves are an embarrassment.
Why oh why is endless sympathy poured on a failure .
Private sector operators are queuing up out of the capital for such a location, operated by lively events amidst exposure to national operators taking sub leases on the terrace .
The opportunity is clear , inviting involving national companies from the private sector to rise the gardens out of the deprivation it’s so obviously reduced to .
Millions in endless bail outs , is an insult to the intelligence of the electorate of Thanet.
Regional plus national private sector operators could and are capable of seizing the day and end this calamity, of public money propping up a failure,
The decades of Margate’s decline had ended you know, why is it that the old attitude is in place when all around is abundantly obvious that sustainable development is totally visible
Peter – my wife will attend 20+ shows per year at Marlowe Theatre Canterbury. Her visits to London shows are very much declined due to her mobility problems. Therein lies a major problem for her and with attending shows at Winter Gardens. The whole place is great great need of a major overall, seating is awful and uncomfortable, and, parking for disabled a nightmare. Perhaps the best course of action would be to sell it for development and invest in a new Theatre perhaps in Westwood area where parking will not be an issue. A 1200/1500 seat venue would open up a new world for theatre goers and attract quality of shows seen at Marlowe. That in turn creates much needed long term viable employment opportunities and attracts other investment with restaurants etc. It needs a bold vision and propping up failed enterprises with a limited appeal does not seem progressive to me. Is a Labour controlled Council able to embrace such idea? I doubt this unfortunately and the same old ways will continue.
Agreed, 100% , exactly what you said , YL can’t even comply with access situations , failing completely pre covid
Totally agree, customer confidence doesn’t exist, wether precovid or post , the third sector operators are capable of operating swimming leisure centres.
It’s glaring and obvious that a private sector operator can be easily found for the winter gardens particularly.
Your leisure are unable to maintain the gardens itself and are in the wider public opinion, it’s time for the caretaker role to cease .
Welcoming in a switched on capable enthusiastic private sector operator to breathe new life into a significant south east coast venue .
It’s time to have them out and welcome in a new sustainable environment for the winter gardens for the benefit of all.
Your leisure have done us proud in keeping the lights on through the dark decades, yet it’s time for a new operator to take the Winter Gardens out of endless haemorrhage of public money with new direction at the helm .
Your leisure operations are satisfactory at swimming pools,
A private sector lease holder liable is so blatantly obvious
Whilst every handout going, appears to have been taken by YL, where has it gone? The only reason a further lifeline can be needed, is if YL expenses remain excessive, and opaque so that we cannot see the real beneficiaries of such fruitless public support.
Completely wholeheartedly understand and agree. Are the public monitor in a tired endless disposition of being scared to raise the bar on the role of public monitor.
This in unacceptable, they are failing decade after decade with no reasonable debate at local authority.
As if local authority here in East Kent are conditioned to accept the situation, I for one am not scared to demand the elected representatives take a position of responsibility in representing the electorate and challenge this haemorrhaging failure of embarrassment incapable of maintaining the landscape architecture.
How on gods earth are the public expected to accept YL are therefore able to operate the WG , in the interest of the public, electorate, festival attendees, multiple generations.
Evidently indoctrinated into accepting this echo of the dark ages is unreasonably ok in post TC Margate in modernity.
Reiterating it’s an insult to the intelligence, given one simple fact Turner Contemporary trapping WG via comparison is next door a stones throw.
Your leisure, thank you for keeping the lights on during the dark ages, please admit defeat and allow generations of Margate future to observe how the private sector can easily demonstrate director ability and management excellence.
Leadership of a enthusiastic staff, anyone who has endured the experience.Undoubtedly shares equally the mockery of operating such a amazing venue,
Come on, the shows over.
Oh look, another shambolic decision taken by the Labour run council to waste tax payers money.
We can’t afford to bail them out, but you’ve just managed to pull £1,000,000 out from, where exactly?
There is bad management and expenditure at YL for many years, and you continue to plough money into it? I thought the turner contemporary and management was bad, but it seems it now has competition.
Who’s benefiting from it? Because it certainly isn’t Thanet residents. It’s time for a new operator to take charge, maybe take it in-house, and look to employ some of the Thanet residents that have lost their job due to the pandemic, to run the different venues.
Whats the betting that the money will come from the sale of dreamland and the carpark? Apparently YL are no longer going to have any catering but rather than make the staff involved redundant now are going to keep them on until a later date, all very well but does it represent best value? Or will the tax payer just be bankrolling non jobs? Yes harsh for those involved but its a business enterprise teetering on the edge and survival would you think be more important.
It’s at least time to explore diplomatically other options, – unreasonable to expect elected representatives to represent the comments here ?
At least exploring other options- a study including full report at other coastal towns and areas .
Where haemorrhaging millions doesn’t happen?
Invitation to private sector operators to offer options.
Not suggesting spending millions on consultation companies.
Officers do a good job, at least a professional opinion on other options.
Why cant Your Leasure go to the bank for a loan ? Why use my taxes ? Why not use some of the millions given to the shed just down the road ?
Self explanatory in just a few words:
Shambolic Labour run TDC.
This is a case of throwing good money after bad but, if you look at the figures, TDC are completely exposed financially if Your Leisure fold. They guarantee all the loans and will be left holding the baby for the millions of pounds of pension liabilities.
Looks to be a classic case of the Gamblers’ Fallacy where TDC are the equivalent of the bloke in the pub shovelling more and more money in the fruit machine in the belief that their bad luck run has got to end sometime, surely? Rick Everitt and the Labour Magic Money Tree gang are more than happy to play along with taxpayers’ money.
Couldn’t have said it better, Thanetian. Labour have many magic money trees and love wasting the electorates hard earned money. Luckily Labour are becoming a party of the past, going by the last GE results, they will soon be consigned to history.
Unfortunately certain Labour loving snowflakes like Martha and Andrew just don’t understand. And it’s people like them, that is precisely why that party is failing.
Yes , that’s it 100%.
They haven’t the initiative to grasp , any other options.
The appearance is this is normal, this is what council do , YL click their fingers and TDC , sit and beg .
Is the tail wagging the dog here .?!’
Have them out-invitation to the private sector.
The Conservatives started it they sell off things that do not belong to them but belong to the taxpayers like council houses sold off at less than half price robbing the taxpayers of billions of pounds and Labour spend taxpayers money propping up those who are unable to balance their book.
Surely the WG site is suitable for development to incorporate a concert/exhibition site on the scale of current set up, but also use its seafront position for restuarant/bars open all year–and a medium size hotel. Its a big site, but surely not beyond the great and the good to bring the site up to modern day standard of facilities. The town needs a year round facility. Plenty of artists appearing in pre Covid days, and at £30 a ticket x lets say 1000, even after paying the band or comedian, thats a lot of cash twice a month, without the various festivals and the Xmas party season.
Without doubt it could be a fantastic venue, but its been allowed to rot and fall into disrepair for so many years that it now needs huge amounts to repair and improve it to a modern standard. You could probably throw 10-20 million at it and see no change.
Its got to the state that in reality it needs selling off to a,private company that will do the right thing. In the absence of TDC getting a massive sum from central gov. Thanet is’nt going to do it up. A sad state to let a terrific building deteriorate so badly.
Yes ,what you said 100% totally agree.
You said it in a nut shell John.
Opportunity surrounding the building-like motorway services once did ?
Stop doing it badly- invite operators who know what they doing serving drinks such as coffee- plus developing the redundant areas of the buildings.