Sector leaders call for urgent action on energy costs

CIMSPA, ukactive, the Local Government Association, the Chief Cultural and Leisure Officers Association, Swim England, and Community Leisure UK, sent a letter on Monday to Michael Gove and Nadine Dorries – the Secretaries of State for the Department for Levelling Up, Housing and Communities and the Department for Digital, Culture, Media and Sport respectively.

In the letter, the organisations issue a stark warning about the consequences if facilities do not receive urgent relief from the Government, in the face of a rise in energy costs of up to 150% on last year.

In a survey* of ukactive members, public leisure operators were asked about the impact on their facilities if there is no financial support to mitigate against the increases and projected increases to energy costs over the coming months.

Up to 79% of public leisure facilities say that without support they are ‘likely’ or ‘extremely likely’ to cease operations within the next six months**.

It means that hundreds, potentially thousands, of leisure centres, gyms and swimming pools may be lost as a result of huge rises in energy costs, which are estimated to have risen from a sector total of £500m in 2019 to between £1.0bn and £1.2bn in 2022.

Energy bills have increased by 150% compared to last year, and in 2023 are forecast to rise by 185% compared to 2021.

Other findings showed that over the next six months:
  • 85% of facilities surveyed stated that they are likely or extremely likely to reduce services.
  • 63% of facilities surveyed stated that they are likely or extremely likely to reduce staffing levels.
  • 78% of facilities surveyed stated that they are likely or extremely likely to increase customer pricing.

All operators said they would be ‘likely’ or ‘extremely likely’ to increase customer pricing within the next 12 months, and all said they would cease operating within 18 months if no support is provided.

It means thousands of essential facilities are at risk and consumers are facing rising costs for health and fitness services during the cost-of-living crisis, along with the risk of significant job losses.

Tara Dillon, CEO of CIMSPA, said: "These are alarming statistics and it is imperative the government acts quickly to support these facilities, which so many people rely on for their physical and mental wellbeing. We are especially concerned that around 75% of any job losses that result from closures will be among young people aged 16-24; a group already struggling with higher levels of unemployment than older cohorts."

In the letter, the coalition of organisations says: “We are writing to request your commitment to being part of urgent talks with local government leaders and industry groups to address the impact of the energy crisis on the fitness and leisure sector, and that these discussions begin in the coming days.

“Whilst we appreciate this is a crisis that is impacting all aspects of our economy and society, the projected figures we set out in this letter forecast the collapse of parts of the sport and physical activity infrastructure in this country over the coming months – at a time when the nation will be taking inspiration from the Commonwealth Games in Birmingham.

“They document the extreme pressure elements of the sector are under right now, especially operators of swimming pools with high energy dependency.

“The implications of these very important services ceasing to operate, especially given some provide statutory services, will not only be business failure and job losses, but the restriction of vital health and wellbeing services for millions of people of all ages and all backgrounds that are a core part of levelling up the UK. “We hope the scale of this situation is fully understood, and that you will join us in bringing our collective energy, urgency, and focus to bear on this issue which will impact communities across the UK.”

The letter ends with a call to begin urgent discussions over the coming days to review all possible options open to the Government, including offsetting the growing financial pressures using the following measures:

  • An in-year grant with an increase to the local government settlement from 2023/24 to ring-fence and protect public leisure facilities.
  • An immediate review of sector taxation and regulation, that minimises other outgoing costs, with longer-term business tax reform to collectively support the sustainability and growth of the sector.
  • Support for a move to non-carbon intensive heating methods.

Huw Edwards, CEO of ukactive, said: “Many of our members have told us that rising energy bills have put them at real risk of closure. We need the Government to act, or these essential facilities will start to disappear from our communities very quickly, just as the UK prepares to host the Commonwealth Games this summer.”

The annual contribution of sport and physical activity to the economy is £13bn and it provides 400,000 jobs, while also delivering £450m annual savings to healthcare, by preventing 30 million additional GP visits, according to research by Sport England and Sheffield Hallam University.

In addition to this, facilities deliver essential support for frontline healthcare, with 66% of cancer prehab and rehab services provided by leisure centres, for example. And Swim England figures show that two million children receive swimming lessons provided by the sector every year.

Physical inactivity is the fourth largest cause of death and disability in the UK, but the latest Active Lives Survey from Sport England shows there were 1.3 million more inactive adults between November 2020 and November 2021 than in the pre-pandemic Active Lives Survey which covered November 2018 to November 2019. The drop in activity levels was almost four times greater in the most deprived areas (4.4%) compared to the least deprived areas (1.2%).

*The ukactive survey was completed by a range of public leisure operators representing approximately 800 facilities across the UK, which equates to approximately 30% of the UK’s total public leisure stock.

**Operators were asked at an overall level about the likelihood of operational cessation (closures) of 'some or all' of their sites, within each specific timeframe. The percentages of likely/extremely likely operational cessations (closures) have been calculated based on the total number of sites of each operator, with the 'up to' reflecting the fact that an operator could have answered 'likely' or 'extremely' likely based on either ‘some or all’ of their sites.

Or download below:

Document Letter to the Secretaries of State department for Levelling Up, Housing and Communities and DCMS 2 June 2022

Incorporated by Royal Charter Charity registration number 1144545

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