LEISURE: Multi-million bail out for Sheffield’s major attractions
The organisation which runs Sheffield’s major attractions and leisure centres was “haemorrhaging cash” prompting a multi-million-pound bailout by the council.
Councillors have questioned why Sheffield City Trust, also known as Sheffield International Venues, didn’t give any advance warning of its financial problems.
The council gave an emergency £1m earlier this year, will subside it by £2.8m annually and will also put another £3m towards health and safety costs and maintenance at facilities.
Council officers said the trust had problems managing and reporting cash flow and finances.
Coun Neale Gibson, who is the council’s representative on the SIV board, is also a member of the economic scrutiny meeting which discussed the issue. He sent his apologies and was not present at the scrutiny meeting.
Ryan Keyworth, director of finance and commercial services, told the meeting: “Sheffield City Trust has been in place for quite a long time and there is a long and complex relationship between the trust and the council.
“Over the last ten years austerity and financial challenges faced by the council have also been faced by the trust so we have started reducing subsidies from historically around £5m a year.”
The trust planned to get to zero subsidy by next year but this wasn’t possible and officers say during that time, a backlog of maintenance built up on the facilities the trust looks after.
“A couple of years ago they were haemorrhaging cash at that point,” Mr Keyworth said.
“The cashflow issues emerged and were made known to us in June with an ask to lend £1m to keep the trust solvent, keep it trading and keep facilities open to the public.
“We are recommending financial support is provided of £2.8m a year. In addition, some short-term investment is required to keep facilities operational.
“We’re looking at a figure of £3m over the next 18 months to achieve that and they are urgent works to literally keep facilities available to the public.
“It’s a short-term investment to keep facilities open. In some cases we have obsolete plant and equipment where if it goes wrong, it would close the facility potentially for several months.
“We are trying to keep the trust stable while a longer-term strategy is put in place and ensure facilities stay available for the people of Sheffield.”
Coun Mohammed Mahroof said the forecast seemed bleak.
“If it is struggling from this moment, in five or ten years time it’s not going to get any better because from the forecasting the subsidy will just keep increasing.
“The facilities are needed and are very valuable but maintenance and repairs will become an issue in the future. Subsidising it further just makes the problem a lot worse and creates debt after debt.”
Mr Keyworth replied: “The complex nature of the original agreements means we need to act together to minimise the risk of facilities closing.
“Having to put millions of pounds into these facilities is not an ideal situation but what we are proposing is something that will keep the facilities open and keep the trust operational until we can decide what the best course of action is longer term.”