Lowestoft leisure centre was saved from financial brink

Waterlane Leisure centre, Lowestoft.

Waterlane Leisure centre, Lowestoft. - Credit: Archant © 2012

Waveney's flagship sports centre is looking forward to a bright future after being rescued from the brink of financial disaster.

Just over six months ago the Waterlane Leisure Centre in Lowestoft was saved by a £300,000 injection of public money in a move that saw Waveney District Council step in to oversee a recovery plan.

Since then Sentinel Leisure Trust, which runs the centre, has all but wiped out projected debts of £1.2m.

The true extent of its cashflow problems became clear for the first time – as senior managers admitted that the trust was 'just 24 hours' from insolvency.

Details of the problems that faced the centre in October last year were spelled out as representatives from the council and Sentinel hailed a 'remarkable' turnaround in its fortunes. This has seen the £300,000 repaid and the trust is now presenting a projected profit of more than £300,000 for 2013-14.

Stephen Ardley, Waveney's deputy leader and cabinet member for green environment and operational partnerships, said: 'This is an absolutely stunning achievement. Last year, when we became aware of a number of financial issues, the council took immediate action to secure the future of the trust who in return completed a root and branch review and entirely overhauled its financial and business model.

'The fact that we are here today talking about turning a profit so soon after is nothing short of remarkable.'

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Responsibility for the management of the council-owned centre was passed to Sentinel in 2010 under a contract to run a range of public leisure services across Waveney.

The centre reopened in January last year after an £8m refurbishment which saw its facilities modernised and expanded, but behind the scenes all was not well.

In October Sentinel's chief executive, Victoria Beck, resigned and councillors agreed to support the trust with an investment of 'up to £300,000', with 'strategic and operational support' provided by the authority's senior managers David Gallagher and Stuart Everett.

A risk assessment completed in November last year highlighted a number of areas for concern. As well as the projected loss, income was down in key areas and staff costs were escalating. The new trust board agreed a recovery plan with the aim of mitigating these risks.

Mr Gallagher said: 'We sat down with (Sentinel chairman) Andy Wilson-Sutter and said 'okay, where is it going wrong?' We needed to start the model again. Now we've paid back all the debt.'

Despite the extent of the trust's financial problems in October, there has been only one redundancy in its 150-strong workforce and a staff restructuring has brought savings of more than £250,000, with a monthly improvement in income of more than £16,000.

Meanwhile, Pulse Fitness, the council's leisure development partner, has worked alongside the trust and invested a further £300,000 in Bungay Pool and Gym, improving gym equipment, changing rooms and other facilities.

With footfall increasing and memberships also up at WaterLane, Mr Everett said: 'The public have been great, but we still have an awful lot of work to do.

'Looking at where we have come from, the business was within 24 hours of insolvency. Now, with a good recovery plan in place, we've paid back the £300,000 and have started the process of recruiting vacancies.'

Mr Wilson-Sutter added: 'The staff here have been nothing short of amazing. The financial problems we faced created huge uncertainty and contract renegotiations, with salary reductions, were simply unavoidable.

'However, everyone has continued to work extremely hard and it is clear that they understand why we had to take these steps. They are a credit to the organisation.

'I could not be more pleased with what we have achieved in partnership with Waveney District Council and would also like to thank my fellow trustees for their hard work and commitment. Although we are still in recovery mode, the projections for Sentinel are now excellent.'

As part of the review of operations, Sentinel and Waveney confirmed that Costa Coffee products would now be served at WaterLane as part of a new franchise agreement with Churchill Catering, based in Diss.

On June 3, a confidential progress report on the trust's recovery plan will be presented to the council's overview and scrutiny committee.