A sector on the financial brink

Published on: March 17th 2022

Leisure and Culture services in the UK are teetering on the financial brink as soaring energy costs hit.

A survey of our members conducted earlier this month revealed an average energy bill of £3.2M per organisation in 2022, representing a 113% increase compared to the average cost in 2019 of £1.5M.

Energy forecasts suggest a further rise to £3.3M in 2023.  It paints a bleak picture for the sector; especially for operators of large facilities, including swimming pools, ice rinks, theatres and events spaces.

Swimming has been highlighted as an area of particular pressure due to pools’ high energy consumption with the research showing that for every pool there will be at least a £5 per visit subsidy needed based on 2022 figures including gas prices from 1st April.

Chairman of Community Leisure UK, Phil Rumbelow said: “The ongoing rise in prices is unsustainable without further financial support. 

“As a result of the rising prices and volatility of the energy market our members are having to consider how to best mitigate these costs and make incredibly tough decisions. Considerations include increasing pricing, partial or full closure of facilities and activities, reducing the number of pools and less reinvestment back into services and charitable activities.

“If the situation does not improve, and there is no financial support, there is a risk of job losses as facilities close and ultimately the viability of leisure and culture trusts is under serious threat.”

Community Leisure UK points out that some local authorities are providing additional assistance to their Charitable Trust partners, though this is not always possible as local authorities are also feeling the impact of the increased costs. 

Furthermore, a number of their members do not have any local authority relationship, notably smaller single site operators, and are having to face the brunt of the impact on their own.

The energy pressures faced are on top of an already precarious situation with Leisure and Culture Trusts witnessing, and projecting, significant income reductions as a result of reduced customers due to Covid and an ongoing employment crisis within the sector.

Mr Rumbelow added: “This energy crisis is happening at a point when the landscape for our members is already very fragile. There are limited, if any, reserves to provide a financial safety net for members, with local authorities also facing significant budget pressures.

“The wider landscape continues to be challenging for members, with increasing salary costs through National Living Wage increases and the increase to National Insurance, along with increased costs across almost all aspects of the business, including suppliers. 

“There is ongoing pressure due to reduced staffing and difficulties to recruit new staff, and new pressures around supply chain issues, specifically impacting pool chemicals and hospitality goods.”  

“We urgently call for support from both local and national governments to mitigate the impact and ensure the sustainability of our leisure and culture services in the long-term.”