Lewes council leaders are set to consider proposals to give financial support to the organisation which runs its leisure centres.

At a cabinet meeting later this month, Lewes District Council leaders are to consider proposals to loan up to £500,000 to the Wave Leisure Trust, in an effort to help the business weather the impacts of Covid-19. 

Like others in the sector, Wave was told to close its leisure centres between March 20 and July 25 as part of the coronavirus lockdown, having a major impact on its main source of income.

While its leisure centres are now open in a limited way, council papers say Wave will face a “non-recoverable deficit” of £1.5m by the end of March 2021, largely as a result of lost income.

In a report to cabinet, a council officer said: “The council could, taking into account the impact of Covid-19 on its own financial situation, decide against supporting Wave with aid. 

“However, this would leave Wave unable to continue to operate facilities in the district; the community and financial costs of this in the short to medium term would be significant.

“Failure for Wave to continue to provide leisure services locally would impact adversely on the health and wellbeing of the community.

“Other leisure operators are facing similar financial hardship and there is therefore unlikely to be a reasonable alternative operator at this time. 

“Holding costs for sites owned by the council (business rates, security, maintenance and site management) would be a significant additional direct cost that is not able to be met through existing allocated budgets should Wave fail.”

According to council papers, Wave is in a particularly difficult position because it falls through the gaps of many of the government’s business support packages.

For example, its status as a trust prevents it from gaining assistance under the Business Interruption Scheme, while its high value buildings (i.e. the leisure centres) makes it ineligible for business support grants.

However, council papers say the business has produced a three-year financial model which sees it move from a £1.5m loss in 2020/21 to a £130k surplus by the end of 2022/23. 

This assumes a rebuilding period in 2021/22 where the leisure trust brings in around half of its previous membership income, due in part to continued social distancing measures.

Council papers say it is unlikely that Wave will be able to provide work for all its employees going into the future and it may have to make redundancies. 

Wave also provides leisure services in partnership with Eastbourne Borough Council and East Sussex County Council as well as others, including East Sussex Public Health and the NHS. 

Lewes District Council is the only one of these organisations not to pay Wave a service fee, however.

A decision on the loan agreement is set to be made at a cabinet meeting on September 24. But before that, the proposals are set to be considered by the council’s recently-formed performance and policy advisory committee next Tuesday (September 15).