Leisure Centre Heating Bill Causing Huge Deficit
Overspend at Lampton Leisure could reach £2 million this year
The waterslide at Fountain Leisure Centre
December 16, 2022
Hounslow pools are costing so much to heat that they could force the company that runs the borough’s leisure centres nearly £1m over budget this year. To breakeven, the company has said it will recover costs from subsidiaries to balance the budget at the end of the year.
Lampton Leisure, part of the Lampton Group which is wholly owned by the council, took over leisure centres including the Fountain Leisure Centre and New Chiswick Pool from Fusion Lifestyle during the pandemic. A budget report, submitted to Hounslow Council’s cabinet on Tuesday, 13 December, showed the Lampton Group is forecast to overspend by £2 million this year.
Councillor Guy Lambert, cabinet member for environment, highways and operational services, said the leisure service was facing three main problems. Those included more members than originally budgeted for, fewer organisations renting out halls, and heating the borough’s swimming pools.
According to the report, membership numbers have grown and ‘pay-as-you-go’ users are higher than expected, but customers are purchasing cheaper items. That, alongside fewer room bookings, has meant they are £700,000 short of expected earnings.
Utilities, which include heating swimming pools, are leading to a £900,000 overspend. Cllr Lambert said, “We’ve got a lot of swimming pools, and swimming pools need to be heated and heating pools is always expensive but now it is a lot more expensive despite the efforts we are making with energy-saving activities.”
Staffing costs and maintenance expenses are expected to be £400,000 over budget. Cllr Lambert added, “The state of the leisure centres when we took them back into our management were in some cases very poor state however we have a new company, very enthusiastic, and people being paid the London wage rather than the starvation wage which a lot of them were being paid before.”
According to the report, Lampton Group will recover costs from subsidiaries in full for the year and will therefore breakeven. Clive Palfreyman, executive director of finance and resources for Hounslow Council said, “While there is strong financial performance reported across the group the pressures emerging in relation to Lampton Leisure Ltd are significant and are likely to require the council to provide support in some form in the second half of the year.
“The forecast loss of £2.0m represents a significant financial challenge for the company and senior officers from the Council and Lampton Group are exploring a range of options to identify a sustainable future model and actions to address the immediate pressures.
“The Council has extended a working capital loan of £4.5m to Lampton Leisure Ltd which supported the business through the period of covid restrictions, the suitability of this financing model is at risk with the current performance and will be reviewed as part of work to identify a sustainable future operating model.”
Megan Stanley - Local Democracy Reporter