To receive from Members, declarations of the existence of any disclosable pecuniary, or non-pecuniary, interests and the nature of those interests in relation to any agenda item. Please see Agenda Notes.
Minutes:
38.1 There were no declarations of interest.
38.2 Councillor Gravells proposed to suspend standing orders in accordance with paragraph 26.01 of the City Council Constitution to allow the Chair of the Board of Trustees for Aspire Sports and Cultural Trust to address Council. The motion was put to the vote and was carried.
38.3 Mr Bown, Chair of the Board of Trustees for Aspire Sports and Cultural Trust addressed the Council and explained why the facilities had to close:
· Two years prior to the closure, Aspire had accrued a debt of £500,000 owed to the City Council and, to ensure that the charity could survive the Covid-19 pandemic, was encouraged not to repay the debt at that time.
· In September 2021, Aspire was informed that any repayment of the debt would be in the context of the charity's recovery and its ability to accrue a surplus over time.
· In October 2021, Co-op bank informed Aspire that they would honour the arrangement agreed upon in regard to the pension bond but were considering whether they would take it beyond September 2023.
· On 4 January 2022, Aspire was informed of the cyber incident experienced by the City Council and the resulting impact on both the City Council and Aspire’s IT systems. Aspire lost access to their key software and had to take bookings over the phone.
· In January 2022, the Board asked the Council to write off the £500k debt and received assurances that repayment would not be pursued at that time.
· In April 2022, there was a positive report to Cabinet on Aspire’s operations and in that same month, the Council sought certainty on Aspire’s position regarding a contract extension to provide the Council with additional time to go out to tender for a new leisure services provider.
· In July 2022, Aspire received correspondence from the Co-op bank, which highlighted concerns about the charity’s status as a going concern and the Board asked the Council to write off the £500k debt to resolve the financial concerns. The Co-op bank stated again that they would be unlikely to offer a new or extended pension bond past September 2023.
· In March 2023, the Board confirmed that, if solutions were not achieved, the charity would go into insolvency.
· In April 2023, there was an email exchange between Aspire and the City Council disputing an £18,000 invoice, which was due to the loss of income owing to unsafe fire alarm systems.
· In July 2023, the Board verballed advised that they may agree to a 12-month contract extension. However, in August 2023, an updated performance plan containing extensive conditions that had not been discussed previously was received by the Board, making it difficult for the Trust to agree to the extension.
· On 26 September 2023, the Board received a letter of support from the Council, however, it failed to provide the assurances required as it did not confirm going concern status up to September 2024.
· At this stage, Aspire had three legal challenges: (1) First, there was no adequate going concern statement, which meant the accounts could not be audited; (2) there were no pension bond arrangements in place beyond September 2023, and (3) the £500k debt remained on the balance sheet, making it difficult to trade.
· The Council had agreed to pay the management fee as part of the delivery plan; however, this would have covered expenses only and resulted in no profit. While the Board was minded to agree to the arrangement in order to continue providing leisure services to the people of Gloucester, they had to make the difficult decision that, legally, they could not continue to operate for the duration of the extension.