Sheffield leisure trust look to future after big losses in funding

Andrew Snelling, chief executive of SIV, Stuart Ridley, head of marketing, and their team are working to keep up standards as the main provider of leisure facilities among increasing cuts to funding and competition with gyms.

The trust, formed in 1987, looks after 17 facilities through its wholly-owned subsidiary SIV, including FlyDSA Arena, Ponds Forge, Hillsborough Leisure Centre and the City Hall.

The group’s finances were put under the spotlight earlier this year when they received an ‘special urgency’ £1 million from the council, who then launched an independent review into their spends and funds.

Mr Snelling said: “Obviously this summer we got ourselves into a position where there was quite a lot of work we wanted to do… So we spoke to the council about having a loan in order to get through the summer period and finance the things we wanted to do – but that is a loan, it’s not part of our ongoing funding arrangement with the council.”

According to their accounts, in just the past year Sheffield City Trust lost 200,000 attendances across venues, cut 6,000 fitness classes and had 2,000 less children on their Learn to Swim programme.

They also lost more than £2.5 million in 2018 and £722,000 the year before. The latest report for this year has not yet been published.

Trustees raised concerns in the latest accounts about the ‘uncertain’ financial future of SCT.

Mr Snelling said: “The temptation is to say ‘let’s just do the stuff that makes money’…but we’d be missing out on all sorts of stuff that as an organisation, and a city, needs to be done.”

When asked what sites they would consider closing to better profits, Mr Snelling said: “We have a central cost of running the organisation but there are venues that are more expensive to run and we have to make the decision that that’s what we want to do. One of those is Sheffield City Hall. Part of our arrangement with Sheffield Council is that we put on the international concert season. It’s something I think we should do but if lots of people think it loses lots of money but it doesn’t, it pretty much breaks even.

“But a hall of that size, scale, age, list of building, inefficiencies in terms of heating and inability to generate significant secondary income – because circulation spaces are very small – all of those things amount to a very difficult trading model if you want to do tea dancers and flower arranging and choirs and community groups, which we think is important. But even if we cut all of those things out we would still struggle to not make the City Hall something that didn’t need subsidising.

“We agree that’s a venue we should continue to operate but it’s also incumbent upon us to look at every possible way to make it as efficient as possible and the whole organisation.”

Mr Ridley added: “The city is awash with gyms and that’s great that there’s so much choice but what that does is to the consumer it says ‘I can get that much cheaper over there’, which they may but they haven’t got the buildings we’ve got or the facilities we have to have.

“We might seem a bit more expensive but what we do is offer value for money so it’s about getting that across and then saying ‘you’re supporting all this other stuff as well’. We could just say we’re only going to run profitable stuff but that’s not what we’re about and we hope that’s not what we want as a city.

“We’d love to knock some of our own buildings down and rebuild them but that’s £15 to £20 million we don’t have and we know the council can’t have so we just have to make do with what we’ve got. That’s difficult when you’ve got new, shiny buildings opening up across the road.”

This summer they trialled a new offer of six sessions for families at any of their facilities for £50. Which worked out at less than £10 a week for a whole family to do something every day.

Mr Ridley said this lead to a 15 percent increase in new memberships.

They said they were also looking at improving their marketing including making their organisation simpler for people to understand by clearly combining SIV and Sheffield City Trust together and scrapping 7 Hills Leisure, which they said would make no change to operation.

The amount of funding they receive from Sheffield Council, Scarborough Borough Council and Derby Council – where they also look after venues – has been cut by £3,732,000 between 2018 and 2016.

Sheffield Council, who are referred to as their ‘main funder’, also confirmed revenue grant funding would cease in March 2019 but sent a ‘non binding letter’ indicating they may provide additional short term cash. Just months after this stopped the trust requested an ‘urgent’ £1 million loan from the council which was given.

Over the past decade the council has lost £490 million of its funding from central government, which councillors say has cut ‘to the bone’.

In their latest report the trustees also point to less disposable incomes as a reason for a loss in footfall.

Mr Snelling said they would be in a different place now had councils have been able to maintain the same level of funding.

He added the funds from Sheffield Council had reduced by around 10 percent of their income.

He said: “We have to make sure we are as efficient as possible so we have taken cost out but we also have to recognise if 90 percent of our income is earned, then we need to make sure people receiving that service understand it.

“We believe there is a standard we have to maintain which involves the people we employ and the buildings we work in.

“So we continue to invest in the people we employ in terms of personal development, training and communications. And we need to invest in our buildings, and that has been increasingly difficult in recent years because the buildings get older and older and as funding reduces that’s the challenge for us.

“The important thing is we keep constant dialogue with the council, we absolutely don’t take any risk with the buildings and their safety.”

They said they were working with the council to try and access grants and said the council’s desire was to get down to zero revenue subsidy as soon as possible.

Mr Ridley said: “If we do really well that’s great for us but it’s also great for Sheffield. Regardless of where the money goes it stays in Sheffield.”

Mr Snelling added: “We are of Sheffield for Sheffield, we are wholly based here and most of our employees are, certainly, from Sheffield City Region if not Sheffield itself. So that idea of contributing back to the city runs through everything.”