Published: 15:45, 10 July 2020
| Updated: 16:36, 10 July 2020
A cash-strapped leisure trust faces significant job losses after a Kent council's cabinet refused to approve an emergency bailout loan of £120,000.
Sencio, which runs three leisure centres and a golf centre in Sevenoaks, faces further financial strain following a crunch council meeting last night. It came just hours after the Government said gyms and pools could reopen on July 25.
More than 100 people, including Olympian Thomas Bosworth and Team GB swimmer Jakob Goodman, signed an open letter to Sevenoaks District Council's (SDC) cabinet urging it to offer the cash aid just hours before it met yesterday.
But the seven councillors unanimously declined to do so.
Sencio chiefs have described the decision as "truly devastating" as they will have to consider job cuts, with the majority of its 343-strong workforce furloughed, ahead of its planned reopening on Monday, August 3.
A Sencio spokesman, who is seeking alternative forms of funding as a result, said: "Our priority must now be to our staff whose livelihoods have been put at risk by this decision.”
However, Sevenoaks council's leader Cllr Peter Fleming (Con) defended the decision. His colleagues said Sencio were "indebted" to the council and owed it £546,000 for a loan used to pay for a refurbishment of one of the trust's leisure centres. It also had not seen a "robust" economic recovery plan.
The cabinet also said it remained unconvinced that further loans would be repaid and feared it could leave a bigger hole in the council's £4.6m deficit from Covid.
One cabinet member, Cllr Lesley Dyball (Con), said: "Councils have a limited ability to offer emergency support because of the significant budget shortfalls they are experiencing as a result of the pandemic."
Upon lockdown closure on March 20, Sencio was forced to suspend all memberships at its main sites, including Sevenoaks and Edenbridge leisure centres, Swanley's White Oak and Lullingstone golf course near Eynsford.
The trust has lost nearly £1m of income over the last three months but is still liable for payments of £160,000-a-month, including utilities costs and salaries for non-furloughed staff. No government grants are available to date.
Consequently, Sencio, which has a 25-year lease for providing Sevenoaks leisure services, applied for an emergency bailout loan of £120,000 from SDC, the landlord, last month.
A final decision rested in the hands of the district council's seven-person cabinet during a virtual public meeting yesterday.
Sevenoaks council's deputy leader and finance portfolio holder, Cllr Matthew Dickins (Con) said: "Sencio is already an indebted organisation, one which is seeking to defer outstanding debt and take on additional debt."
His colleague, Cllr Julia Thornton (Con), also a cabinet member, said: "I'm struggling to see why we should throw additional money at them when they are already not in a position to be paying us back at the moment."
Angered opposition councillors, who also attended last night's meeting, said they feared the leisure trust would go into administration, which would mean that SDC would lose any hope of reclaiming its original £546k loan.
Sevenoaks council's main opposition leader, Cllr Elizabeth Purves (Lib Dem), said: "We are now in a situation where, through no fault of their own, Sencio is in dire financial straits.
"For the last four months they have had no income coming in and they have been given over two months of closure."
Tonbridge and Malling Borough Council, a neighbouring authority, last month agreed to set up an £1m emergency fund to their leisure provider, tmactive. This is almost 10 times higher than the amount asked for by Sencio.
Sevenoaks deputy opposition leader, Cllr Dr. Merilyn Canet (Lib Dem), who believes there will a surge of interest in gym membership registrations, said: "It's a small loan, given the size of the operation."
However, Cllr Fleming said: "With respect Cllr Canet, £100,000 is 1% on the district's council tax, so that is the reality of the loan."
A key vote was held and the cabinet agreed to offer a payment holiday on the £546k debt for an additional three months until September 2021, but rejected the loan proposal.
Culture secretary Oliver Dowden announced plans to reopen the leisure centres on July 25. The news has been "welcomed" by Sencio but they face a delayed opening as changes are put in place to adhere to government rules.
Sencio said it "welcomed" the news that leisure centres would reopen on July 25, but its opening may be delayed until Monday, August 3, as changes are put in place amid strict Government and social distancing guidelines.
These will include moving equipment from fitness suites to sports halls to increase spacing between users, limiting numbers that can attend exercise classes and keeping changing rooms closed.
A Sencio spokesman said: "It is important to understand it isn’t as easy as saying open the doors on a certain day.
"The procedures, systems and practicalities required to do so are complex and challenging for every leisure centre and gym operator.
"We are ready to reopen and our plan is to do so on Monday August 3 subject, of course, to any changes in advice and guidance from government.”
More by this authorCiaran Duggan, local democracy reporter
This website and its associated newspaper are members of the Independent Press Standards Organisation (IPSO)