In response to an article published by the Liverpool Echo on 24 January 2022 entitled “Council’s £2m bailout to stop its leisure company going bust”, please find below the facts.
What is Volair?
Volair Limited is the company which provides leisure facilities across the Borough. The company is wholly owned by Knowsley Council, and operates leisure centres in Halewood, Huyton, Kirkby, Prescot, and Stockbridge Village.
The Council transferred its Leisure Services to Volair in April 2016. The aim was to reduce the costs of operating the leisure services by operating a more tax efficient model. Volair operates independently as a company in accordance with its own Memorandum and Articles of Association and its governance is conducted by a Board, which comprises four Council nominees, two independent representatives, and the company’s Managing Director. Other than the Managing Director who is employed by the Company, none of the other six Directors receives any pay for carrying out these roles.
The company operates the five leisure centres across the Borough, and has attracted significant investment to fund gym refurbishments and the provision of 3G all-weather football pitches.
The establishment of Volair has been a very positive step forward. In the four years leading up to the COVID-19 pandemic, the Council had saved in excess of 50% of its leisure management costs through the new arrangement with Volair. This meant that all five leisure centres could be kept open at a time when the Council was cutting budgets elsewhere.
What impact has the COVID-19 pandemic has on Volair, and indeed leisure facilities generally?
Despite having encouraged the use of such business models and despite their assurances that they would provide financial support for local authority leisure facilities during the pandemic, the Government decided that they would not provide support for the particular model of service provision used in respect of Volair – this means that Knowsley Council has not received the financial support for local leisure services which the majority of other local authorities received.
As Volair operates as a wholly-owned Council company, the only funding available from the Government during the pandemic was through the National Leisure Recovery Fund. Volair was given support totalling £374,000, but this was nowhere near enough to deal with the financial impact of the COVID-19 and therefore protect public leisure services in the Borough.
Volair’s viability to provide these services was not in question prior to the pandemic, and this situation has purely arisen as a result of nationally imposed periods of lockdown and the closure of leisure facilities.
The reopening of leisure facilities after the first lockdown was essential in addressing a number of issues, including the impact of the pandemic on people’s mental health and wellbeing. It was therefore essential that all of the Volair leisure centres were able to open and provide such much-needed services at a particularly challenging time for local people.
Unlike other areas of the country, the Government did not provide enough funding in Knowsley for this to happen. Knowsley Council had a choice between allowing the Volair business to go bust (meaning that the leisure centres would not reopen), or stepping in to balance the books and enable the centres to reopen. The Council decided to invest £1.903m to ensure leisure services across the Borough could continue.
The Council has asked the Government on many occasions to provide fair and equivalent funding for lost leisure services income, but all of these requests have been rejected.
What governance and scrutiny arrangements are in place for Volair?
As the sole owner of the company, the Council has nominated one of its Executive Directors to act as its representative in terms of the liaison with the company’s management. This liaison occurs on a regular basis and has been particularly important over the past two years.
The company runs its business independently, and in accordance with a governance framework established in 2016. The company’s governance is not bound by the same provisions as Council decision-making (e.g. publication of papers etc) due to its commercial nature. However, there is no “secrecy” or lack of transparency in respect of Volair – all of the Council’s decisions are well publicised, and Volair publishes its accounts exactly like any other such business.
The Council’s Health and Adult Social Care Scrutiny Committee takes responsibility for scrutinising the provision of leisure services in Knowsley (as provided by Volair).
It should be noted that, during the COVID-19 pandemic, Knowsley’s Sustainable Borough Scrutiny Committee was also asked to oversee the Council’s broad response to the pandemic. The Committee’s work in this respect included a number of meetings during 2020/21, at which the Council’s Chief Executive and several Cabinet Members attended to answer questions about related issues.
There are plans for another gym operator to open in Kirkby. Isn’t this competition for Volair in Kirkby?
Kirkby has a population of 42,000. Having two gyms in the town centre is not in any way a level of competition which either gym should not be able to deal with. As well as a gym, Volair in Kirkby also offers a swimming pool, a sports hall, a spa, a variety of classes, a sauna, and football pitches. The leisure offer in Kirkby has something for everyone and is by no means “too much” for the population of the town.
Will any of the Volair centres be closing?
The reason the Council stepped in was to ensure ALL five Volair sites could remain open. There are currently no plans for any sites to close.