West Lothian Council supports struggling Xcite leisure trust
West Lothian Council has agreed to guarantee the future of its struggling Xcite leisure trust to the end of the financial year.
Financial chiefs won approval to issue a “letter of comfort” to auditors promising to support West Lothian Leisure until April 2022.
The council’s Executive has already agreed core revenue funding of £2.312 million and a one-off capital payment of £370,000 for 2021/22.
In addition, the council’s approved 2021/22 to 2022/23 Revenue Budget includes an additional £3m to help WLL cope with the continuing demands of Covid-19.
The council’s head of Finance, Donald Forrest, told the Executive: “Azure, the WLL external auditors, have asked for a similar ‘letter of comfort’ to 2020/21 to be provided by the council to WLL stating that the council will undertake cash flow management with WLL to allow them to remain in credit at all times, thus allowing them to proceed as a going concern and meet their everyday cash liabilities’ over the financial year.”
SNP Depute leader Councillor Frank Anderson who has called for arms-length organisation management to be brought back into the council, questioned the wording of the letter and its specific references “everyday cash”.
He told the meeting: “The phraseology has changed.”
Mr Forrest replied: “The letter is more or less the same as in previous years.”
A report to the Executive added that the letter incorporates the wording suggested by the auditors, Azure.
The Xcite centres provide gyms and swimming pools across West Lothian. West Lothian Leisure runs 20 sites in the county and lost more than £8m because of Covid.
It has quit its tenancy of the Low Port outdoor activity centre in Linlithgow in an attempt to trim expenses and has worked with the council on producing a recovery plan.
The council has also re-profiled loans to help the trust keep going.
Meanwhile, councillors were told this week that a “perfect storm” of Covid and Brexit has added almost £1m to the costs of building new homes for some of the most vulnerable local people.
Paul Kettrick, the council’s estates manager, told the council’s Executive that the planned complex care housing in Pumpherston had been delayed by three months.
Costs of the project have risen £800,000 over the initial £3.74 million budget for the new homes which will provide supported living in the community for vulnerable people with learning difficulties. The plan was initially agreed in late 2018 when a site in Cawburn Road was identified.
Mr Kettrick told councillors: “The main causes for the increases in cost impacts are associated with construction price inflation, the availability of contractors and and the implementation of Covid secure working practices.”
Mr Kettrick said Brexit and Covid had ‘joined forces’ in January “to create a perfect storm in the construction industry in the early part of this year.”
The cost of raw materials such as timber has surged world wide – up 15 to 20 per cent within three months. There is also an industry-wide shortage of skilled trades such as bricklayers and electricians.
Mr Kettrick said that pre-pandemic he would have expected six or seven tenders for such a building project. This project received only three tenders from potential builders, of which the one for £4.5m was the lowest .
A report to committee added: “The project supports the discharge of West Lothian residents from inpatient hospital settings back to West Lothian. The care and support needs of these individuals is complex and transitional planning is essential and this has commenced in anticipation of the planned move.
“Delay in the delivery of this project has the potential to create anxiety for individuals and their families.”
Councillor leader Lawrence Fitzpatrick, chairing the meeting said: “This is a very important project for those who desperately need this complex care housing.”