Cash-strapped London councils stumped up several thousands of pounds in extra funding for a struggling leisure centre firm.
Croydon, Lambeth and Merton councils all confirmed they provided GLL – which runs Better leisure centres on behalf of local councils – with additional funding during the ongoing Covid-19 pandemic, raising concerns around the sustainability of outsourcing models.
The news comes a month after The Guardian revealed the pandemic cost GLL £170m in lost revenue, forcing it to spend £20m in reserves, cut more than 500 jobs and raise questions over the future of its 50 most “inefficient” centres.
In January, Croydon Cabinet Member for Culture and Regeneration Councillor Oliver Lewis told SW Londoner it loaned £279,204 to GLL for maintenance and unavoidable losses between March and July 24, 2020, when the Government closed leisure centres.
Croydon declared itself effectively bankrupt at the end of last year, which means it may be unable to deliver on some major projects in the borough while it props up its day-to-day spending.
Lambeth Council confirmed it was providing GLL with financial support, while Merton provided GLL with about £622,000 in relief funding throughout the whole of 2020.
Campaign group We Own It, which would like to see an end to private contracts for public services, called the spending a “farce” in local government.
Campaigner Johnbosco Nwogbo said: “In the good times, private companies let the profits roll in.
“In the bad times, the local or national government has to step in and bail them out with taxpayer cash.
“Risks are nationalised, while profits are privatised.
“Meanwhile, outsourced services have consistently been shown to perform far worse than services that are in public hands.”
GLL is a not-for-profit social enterprise, formed in 1993 to run Greenwich Council’s leisure facilities.
It now runs centres throughout the country.
A spokesperson for GLL defended its position by saying its method of running public services has been tried-and-tested for over 25 years.
They said: “Outsourcing to a not-for-profit social enterprise such as GLL remains an excellent way for local authorities to provide leisure services to their residents.
“Once a clear roadmap for reopening has been provided by Central Government, we will work with our council partners to review the viability of individual facilities, but ultimately the final decision to reopen or not will be made by the relevant council.
“We are currently lobbying to ensure that we are allowed to reopen at the earliest opportunity.”
Permanent pool and leisure centre closures are not currently planned in Merton and Lambeth, while Cllr Lewis in Croydon said that if a GLL-run centre in Croydon were to close, the building would be returned to the council.
“It would be much more costly for the council to run these centres in-house without the expertise and economies of scale of a national operator like GLL” he said.
“Our leisure centres have been run outside the council for many years now and our partnership with GLL will allow them to be run without subsidy.
“We will continue to work with our operators GLL so that residents across the borough can access a wide range of sports and leisure activities in good quality, modern facilities.”
He added Croydon Council also applied for a £700,000 grant from not-for-profit industry supporter Ukactive for sports and leisure, while they ran a consultation to ask residents how they thought it could save costs, which closed in January.
Meanwhile, a spokesperson for Lambeth Council said the contract with GLL runs out in March 2022, at which point the council will consider “all possible options for the future of our leisure centre services”.
A Merton Council spokesperson said throughout GLL’s long-term contract with the council, profits are reinvested into healthy living and community schemes.
GLL also runs centres in Hammersmith & Fulham, which declined to comment.