Ever since the Pyramids Centre was saved from closure the debate has raged over what to do with it.
In its search for a viable business model, Portsmouth City Council has considered turning the landmark into an ice rink, allowing a church to use it and opening a Tesco store in part of the building.
Since a successful community campaign helped reverse the decision to close it in 2008, three organisations have tried to make the leisure complex sustainable.
And after private companies DC Leisure and Parkwood were unsuccessful, the council opted for the not-for-profit social enterprise Southsea Community Leisure Limited (SCLL).
But since then the controversy has continued over whether or not taxpayers are getting good value for money from the deal.
The new chairwoman of SCLL Judith Smyth insists that all the money it has been loaned by the council will eventually be repaid.
‘This is not going to be a drain on the public purse,’ she said.
‘I’m confident that by 2014 we will be making a surplus, I don’t think that is too ambitious as a goal.
‘But it takes time to build a social enterprise and we are very grateful for the council’s support.
‘We have started to make progress already. We have 1,400 members and everything is going in the right direction.
‘This isn’t something that you can do overnight.’
The council also argues that in the last year in which a private firm was running it, the complex it cost more than it does now.
But Conservative culture, leisure and sport spokesman Cllr Luke Stubbs said because the last private company to run the centre knew it was set to be replaced it had no incentive to keep costs down.
He said: ‘When they came along the council opted for Southsea Community Leisure Limited because they promised they could run it for free.
‘But they have ended up costing at least as much as the private operators.
‘And we knew swimming pools never make money, but it was a mistake not to have a council representative on the board of directors from the beginning.’
One of the conditions of the funding extension until September SCLL has now received is that a council observer be appointed to the board.
Cllr Stubbs added: ‘This company has proved to be very expensive and we really need to think about what we are doing.
‘We need a long-term solution for this. We can’t just continue to go from meeting to meeting – we need to plan what we are going to do if the losses continue.
‘We also need to know what sort of losses we will need to cover in the future.
‘At the moment we hold all the cards because they are coming to us for money. We need a report on other options, such as splitting the business, to look at some serious long-term possibilities.’
Following business plans in April 2010, December 2010 and December 2011, in which SCLL overestimated its financial performance, officers have little confidence that the latest prediction – to be making a surplus by 2014 – is realistic.
But former Lord Mayor and Lib Dem cabinet member for health, Cllr Leo Madden, said experience with other community ventures shows they need to be given time to become successful.
He said: ‘This issue is in danger of getting more items in the agenda than we had on the Spinnaker Tower in my day.
‘But I have to say I have some sympathy with the trust. We subsidise other facilities in the city which are run by other people.
‘It’s an iconic building and while there is still money in the kitty we should let them come back and see if they can find new ways of doing things.’
Portsmouth Labour party chairman Cllr John Ferrett was more sceptical. He said: ‘It is costly at the moment, but I don’t find the argument that we have to give them more money, or that it will cost us more money, to be very helpful.
‘I have no problem with extending the deadline until September, but I’m not sure what is going to change between now and then.’
Feedback to the council from SCLL since taking over the centre is that swimming has been very popular and the gym is successful, but use of the spa and health suite has been lower than expected, while the income from events and food and drink has been significantly lower than expected.
But culture, leisure and sport cabinet member Lee Hunt said it was vital to keep the Pyramids open and not give in to ‘spitefulness’ from critics of the trust.
He said: ‘We need to understand that these people are working hard to make the Pyramids a success.
‘This is about the offer on the seafront and we should be grateful for the efforts the volunteers from Southsea Community Leisure have put in.’
February 20, 2007: The council decided to close the Pyramids by March 31, 2008.
This was because of its very high maintenance and management costs, declining usage and increasing subsidy per head compared to other centres.
March 25, 2008: The council changed its mind in the face of a successful campaign to save the centre organised by local people.
Between 2007 and 2010: the Pyramids Centre had two private operators which were subsidised by the city council:
2007/08 – DC Leisure, cost: £660,000
2008/09 – Parkwood, cost: £432,000
2009/10 – Parkwood, cost: £882,000
March 30, 2010: The city council agreed a 25-year lease for The Pyramids Centre site with not-for-profit enterprise Southsea Community Leisure Limited (SCLL), which took over running it from April 30.
2010: SCLL started carrying out refurbishment and enhancement works at the centre valued at £2,069,304.
It needed to borrow money to afford this and the city council agreed to guarantee its loan repayments in case the business plan put forward by SCLL didn’t create the predicted income.
December 29, 2010: The council had to step in and make a £28,389 financing payment because of cash flow problems at SCLL.
January 25, 2011: The city council voted to provide £1.3m of further financial support to SCLL with the aim of getting the trust being able to make a surplus by June 30, 2012.
As of the end of June £1,143,510 of the £1,330,000 financial support had been used.
June 2012: A new SCLL business plan presented asked the council to extend its financial support until March 31, 2014, by which time it expects to start repaying the council’s money. But a report prepared by officers described this as ‘unlikely’, predicting a deficit of almost £300,000 to arise by March next year.
WHAT HAPPENS NEXT?
When the council disposed of the Pyramids by providing a lease to SCLL, it was not required to go through a competitive tendering process.
But now it may have to, because EU procurement laws require councils not to provide long-term support without it.
This leaves four options:
· The council could put the contract out to tender and test the amount of subsidy needed and the kind of services and facilities provided in the future.
· It could take over the running of the leisure centre.
· It could close the Pyramids Centre, demolish the building and offer the seafront site for future development.
· It could dispose of the centre by granting a long lease, but not necessarily as a leisure facility.
SOUTHSEA Community Leisure Limited has set about revamping the appearance and facilities of the Pyramids Centre in the hope of attracting more customers.
Visitor numbers rose last year to more than 200,000 from around 140,000 in 2009 and, despite the pool’s closure earlier this year, SCLL predicts another increase by the end of 2012.
There are also plans to open a ‘Pop Up Guestaurant’ in the centre, where local groups can apply to run a temporary restaurant which could become permanent if they are successful.
Visit pyramids.co.uk for more information.