Issue - meetings

Report number:     CAB/WS/20/072

Portfolio holders: Councillors Jo Rayner and Sarah Broughton

Lead officer: Jill Korwin

Resolved:

That:

1.           The final principles of the terms and conditions of the £1,000,000 loan facility for Abbeycroft Leisure agreed by Cabinet on 21 July 2020 (Report Number CAB/WS/20/051), as set out in Section 2 of Report Number CAB/WS/20/072, be funded through usable capital receipts; and

2.           Delegated authority be given to the Council’s Section 151 Officer, in consultation with the Portfolio Holders for Resources and Performance and for Leisure, Culture and Community Hubs, and the Director, to agree the final details of the loan based on the principles as agreed above and enter into a loan agreement(s) with Abbeycroft Leisure.

(Report Number: CAB/WS/20/072)

The Cabinet received this report which explained that on 20 March 2020, Abbeycroft closed its leisure centres, in line with Government guidance and all its income ceased (other than the management fee the Council paid and some Council grant funding).  Closure of centres and then re-opening in a COVID safe way has had a huge impact on the viability of leisure service and operators across the country.

Councillor Joanna Rayner, Portfolio  Holder for Leisure, Culture and Community Hubs, referred to Section 2 of the report and explained that on 21 July 2020, the Cabinet had approved the creation of a £1,000,000 loan facility that Abbeycroft Leisure could access to support its cash flow position, having regard to the very significant impact COVID had had on its operations. This was set out in Report Number CAB/WS/20/051. 

However, since that report, Abbeycroft had taken further advice on the sectors’ recovery projections and around its own short to medium term financial performance. Abbeycroft’s cash flow position and balance sheet position meant that it had to consider very carefully taking on any external debt at this time, including the agreed loan facility from the Council. This report and its exempt Appendix provided the final terms of that loan agreement which were deemed acceptable to both the Council and Abbeycroft’s Board of Trustees.

It was also reported that £100m of funding had been announced from the Government that would be available to support leisure trusts running Council facilities.  However, the Council was still awaiting full details of how that funding would be allocated and which organisations would qualify.

During the discussions, the Cabinet voted to move into private session to be able to discuss the detailed financial issues contained within the exempt Appendix and other matters (see Minute Numbers 191. and 192. below).

When returning back to the public session, Councillor Rayner explained that the Cabinet had also discussed the following specific areas and were confident that these had been satisfactorily addressed:

-      Risks of repayment and the security of the loan.

-      The Council being able to continue to deliver a leisure service to its residents.

-      Whether the loan provided adequate support for Abbeycroft’s recovery.

-      Whether it was a good use of public funds.

-      The rates within the loan agreement.

-      Compliance with State Aid.

Resolved:

That:

1.           The final principles of the terms and conditions of the £1,000,000 loan facility for Abbeycroft Leisure agreed by Cabinet on 21 July 2020 (Report Number CAB/WS/20/051), as set out in Section 2 of Report Number CAB/WS/20/072, be funded through usable capital receipts; and

2.           Delegated authority be given to the Council’s Section 151 Officer, in consultation with the Portfolio Holders for Resources and Performance and for Leisure, Culture and Community Hubs, and the Director, to agree the final details of the loan based on the principles as agreed above and enter into a loan agreement(s) with Abbeycroft Leisure.