Edinburgh Leisure facing estimated £10 million black hole

The coronavirus crisis has punched an estimated £10 million black hole into Edinburgh Leisure, which needs to be filled urgently if city residents are going to enjoy the same level of services available to them pre-lockdown, insiders have warned.

Edinburgh Leisure, an arm’s length external organisation (ALEO) of Edinburgh City Council, runs the Capital’s 10 municipal pools, 14 gyms, two tennis courts and six golf courses on behalf of the taxpayer.

On September 14 just four of Edinburgh Leisure’s indoor facilities will reopen its doors, joining the organisation’s golf courses and tennis courts.

But only now, as the capital struggles back to its feet, is the true state of Edinburgh Leisure’s “huge” financial difficulty becoming apparent.

Since closing all of its facilities on March 18 this year, Edinburgh Leisure has lost an estimated £10 million in customer income.

Based on last year’s figures around two million visitors who would have used the organisation’s facilities have been unable to do so.

While Edinburgh Leisure is presently able to incrementally reopen facilities, how long these venues can stay financially viable is a different question.

If social distancing restrictions remain in place for a long time and visitor numbers are low, urgent funding will be required to keep the organisation running at its pre-lockdown scale and standards.

In this instance, should funding not be secured, services will be forced to dramatically change. Facilities may have to close down and the scope of activities on offer will narrow.

Edinburgh Leisure is in discussions with the council about its long-term survival strategy and representations have been made to the UK and Scottish Government for financial support.

Both governments have not yet agreed to any extra funding packages.

Meanwhile, the council has dished out a total of £31 million to support its ALEOs, which include Edinburgh Leisure, Lothian Buses, Edinburgh Trams, the Edinburgh International Conference Centre and Capital Theatres.

Across the UK’s public leisure sector almost 7,000 jobs are at risk and a further 6,000 roles confirmed for redundancy.

Current reserves across the sector have dropped to 64 per cent compared with pre-covid levels, and with only 10 per cent of reserves expected to remain by the end of this financial year, most leisure trusts will have insufficient funds to operate.

Many trusts are unlikely to survive a second lockdown should one be announced, and those that do survive will have little or no financial reserves to rebuild their businesses.

A council spokesperson said: “The pandemic has undoubtedly affected many of our partner organisations and we’re in ongoing discussions with all of our ALEOs to understand the extent of income lost during lockdown.

“As part of our Adaptation and Renewal strategy we’re making every effort to mitigate issues where we can – acknowledging that our own resources have also been impacted by Covid-19 and are limited. We’re having positive conversations with the Scottish Government about the additional support Edinburgh needs.”

A spokesperson for Edinburgh Leisure said: “Edinburgh Leisure is committed to ‘building back better’ to a sustainable Edinburgh Leisure and to continue making a positive impact to the citizens of Edinburgh’s health and wellbeing – as we have done for the last 22 years.”

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