Decision Maker:

Outcome:

Is Key Decision?: Yes

Is Callable In?: Yes

Date of Decision: December 9, 2025

Purpose:

Content: Salford City Council - Record of Decision (Cabinet) I Paul Dennett, City Mayor, in exercise of the powers contained within the City Council Constitution do hereby approve: 1.    To note the contents of the report presented to Cabinet. 2.    Approve the payment of £500,000 to Salford Community Leisure. 3.    Approve the use of earmarked reserves as detailed in Appendix 1 of the report presented to Cabinet. The Reasons are:   Over the past decade, the impact of austerity has significantly restricted the Council’s ability to invest in Salford Community Leisure (SCL) services. Despite these constraints, there has been a continued expectation for SCL to expand and enhance its offer to residents, often without any corresponding increase in budget. This has placed considerable pressure on the organisation, particularly as inflation and rising costs—such as pay awards and maintenance—have consistently outpaced available funding. While SCL has achieved strong post-pandemic income growth and has implemented a range of efficiency measures, the combination of static external funding, capacity constraints, and the erosion of grant values by inflation has left the service facing persistent deficits. Without additional investment, SCL’s ability to maintain and develop its services for the community is at risk, as evidenced by the forecasted deficit position and the need for one-off support from Council reserves. Alongside these challenges, both SCL and Salford City Council have continued to undertake capital investment to support and improve the operation of leisure assets. This ongoing investment has been vital in enabling service enhancements and income growth, but it also places further demands on limited resources, highlighting the need for a sustainable long-term funding solution.   ·         For the financial year 2024/25, SCL is reporting a deficit of £317k (subject to final audit), a significant improvement from the £1.4m deficit in 2023/24. ·         Reserves are expected to stand at £512k by year-end. This improvement is attributed to increased customer income, notably an additional £500k from fitness services, and £1.6m in health-related project grants. ·         However, staffing costs have risen by £800k due to a 5% pay award. The Clarendon insurance claim of £250k remains unresolved. ·         For 2025/26, a projected deficit of £813k would deplete all reserves, resulting in a £301k funding gap and potential insolvency without intervention. Options considered and rejected were: This was the only option available.   Assessment of Risk:  Medium   The source of funding is:  Earmarked reserves. Legal Advice obtained: Provided by Tony Hatton – Solicitor – Shared Legal Service Local authorities frequently fund third-party (often third sector/charity) organisations to deliver services, and the risk of these partners failing is a recognised issue. This is part of a broader, complex landscape where councils themselves face significant financial pressures and funding uncertainties.  The Council relies on funding SCL to ensure service delivery, local needs and competitiveness in the market, but it seems clear that SCL faces significant financial pressures going forward and the additional funding is required as a short to medium-term measure to mitigate service disruption pending the Council making decisions on efficiencies, savings and establish longer-term stability to rebuild reserves, so robust monitoring and evaluation of SCL should continue during the delivery of the services undertaken by SCL. The additional fees are recommended as being desirable and necessary to bridge the short-term funding gap, which is still within a level of tolerance permitted by the Public Contracts Regulations (PCR) which permit through regulation 72, a number of “safe harbours” when contracting authorities need to modify existing contracts in a way which does not require a fresh procurement. The Council constitution confirms that “the City Mayor may apply reserves in-year by use of reserves (in addition to the use of reserves planned in the budget calculations), provided that such use of reserves does not exceed £1 million (£1,000,000) in aggregate in a financial year and the Chief Finance Officer has certified in writing that such use of reserves would not cause the Council’s overall reserves to fall below a prudent level….and …Any such use of reserves shall be reported to the next meeting of Council.”   Financial Advice obtained: Provided by David R Mills – Strategic Head of Finance and as shown in the body of the report presented to Cabinet.   Procurement advice obtained: Not applicable   HR Advice obtained: Not applicable.   Climate Change Advice: Not applicable. The following documents have been used to assist the decision process: ·         Briefing to Deputy City Mayor and Lead Member for Finance, Support Services and Regeneration ·         Briefing to the Lead Member for Culture, Heritage, Equalities, Sports and Leisure. Contact Officer: David R Mills – Strategic Head of Finance                                 Telephone number: 0161 793 2858   The appropriate scrutiny to call-in the decision is the Community and Neighbourhoods Scrutiny Panel.             Signed: Paul Dennett _____________                        Dated: 10th December 2025             City Mayor   For Democratic Services use only   This decision was published on 10.12.25                                            This decision will come in force at 4.00 p.m. on 17.12.25                                                   unless it is called-in in accordance with the Decision Making Process Rules.