COUNCILLORS ARE being asked to approve additional funding of £65,000 per month to liveArgyll until Helensburgh Leisure Centre can reopen.
A report to Argyll and Bute Council has shown that the leisure trust, which operates leisure services on the authority’s behalf, needs to confirm further funding after auditors flagged a risk.
The leisure centre has been closed through roof damage since Storm Eowyn on Friday, January 24, with the council recently forecasting it could be closed until as late as March 2026.
It has also been proposed that the council set aside £1.3M of funding across the region for repairs following the storm.
The details feature in a report which will go before the full council at its last meeting before summer recess on Thursday, June 26.
Over the past few months a voluntary redundancy process has been underway at liveArgyll and last week this newspaper reported that Dunoon’s main swimming pool will close for two months later this year, so that ‘essential work’ can be carried out.
Executive director Kirsty Flanagan said: “A letter has been received from liveArgyll in respect of their financial position, directly because of Storm Eowyn.
“Prior to the closure of Helensburgh Leisure Centre following the storm, the facility was generating approximately £125,000 income per month which was income that formed part of Live Argyll’s core budget.
“The Live Argyll board took immediate steps to provide alternative gym and fitness provision and were able to recover circa £30k lost income per month.
“As this left a significant gap, the board reluctantly agreed to a cost reduction plan, exploring every opportunity to reduce cost to deal with the loss of income as much as the company can across their operations.
“This was necessary due to the estimated timeline for repairs and reopening of the leisure centre. However, the ongoing shortfall of income presents a significant risk to the ongoing solvency of the company.
“Some of the options to reduce expenditure identified by Live Argyll may require consideration by the council and a further report will be brought forward to members in this regard in early course.
“Live Argyll’s external auditors have, for the first time, flagged an audit risk and have indicated that they will be seeking assurances from Live Argyll directors as to the longer-term financial viability of the company.”
Ms Flanagan added: “Live Argyll holds a reserve balance of approximately £740,000 after adjusting for the 2024/25 outturn deficit. Prudent financial management and their reserves policy mean they should retain a balance of £200,000 as a minimum.
“This would free up circa £540,000 to manage any funding shortfall and cost pressures. The income gap is estimated to be circa £90,000 per month, reducing to £70,000 in July and £65,000 per month from August once the cost reduction plan measures are fully implemented.
“The reserves would be fully exhausted by the end of October at which point Live Argyll would be seeking a service payment of circa £65,000 per month from the council until the leisure centre fully-reopens and returns to normal level of service.
“It is recommended that the council provide a commitment to an additional service payment of £65k per month from November through to when the leisure centre reopens with up to £65,000 per month for a further two months to allow the facility the breathing space to have normal level of service and income restored.
“If the leisure centre opens no later than the end of the first quarter of 2026 then this would result in a worst-case scenario payment of £455,000.
“It is further recommended that the council agree that Live Argyll, in these circumstances, can access the council’s redundancy earmarked reserve for the cost of any staff redundancies as required by their cost reduction plan.
“It is estimated that these will cost no more than £100,000.”
