Â£2.6m Active bailout approved
Councillors in Northumberland have agreed to plug a Â£2.6million hole in the finances of the charity running leisure services, but disagreed over who was to blame.
At Wednesday’s full meeting of Northumberland County Council, members approved using taxpayers’ cash to provide additional funding of up to £2.635million to meet Active Northumberland’s 2017/18 deficit.
A report to councillors explained that decisions made by the previous Labour administration have had a ‘significant detrimental impact’ on the charitable trust’s financial position, which the arm’s-length organisation could not control.
Coun Nick Oliver, the cabinet member for corporate resources, said that ‘it was a shame it’s come to this’, but that without the cash injection, Active Northumberland ‘cannot be considered a going concern’. He said it was caused by historic problems, such as ‘inadequate and unrealistic budgets’.
Labour leader Grant Davey seconded the proposal to provide the £2.6million as he ‘wholeheartedly supports the continuation’ of Active, but he disputed some of the claims made by Coun Oliver as to where the blame lies.
He added that he was ‘very, very disappointed’ with the comments of the Active board, which included references to a number of changes of which they were not given notice or made aware and a lack of consultation.
But Coun Davey said decisions were made by the Active board, not the council. The breakdown of communications seems to have been between the board and the management of Active, he added.
However, council and Conservative leader Peter Jackson said Coun Davey ‘seemed to be living in a parallel universe’, saying that the situation is so serious that wages probably wouldn’t be able to be paid next week without the one-year rescue package ‘and that’s the mess that you and your administration has left us with’.
He added that ‘we can’t find a proper service level agreement between this council and the charitable organisation Active Northumberland’ and that there’s been ‘persistent and systemic mismanagement over a number of years’.
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Coun Davey in turn hit back, saying that services had been brought back into the council on the Conservative administration’s watch, while Coun Anne Dale, an independent, said that the financial burden had simply been shifted onto council budgets by transferring services back in-house.
The Active budget for the 2017/18 financial year was based on the previous year, when it received a £4.7million management fee from the council plus a £1million charitable donation from Arch.
However, during 2017/18, a number of services, such as libraries and tourist information centres, were brought back in-house by the council, reducing the management fee to just over £1million.
A series of other pressures, including an unforeseen rates bill of £294,000, an imposed savings target of £500,000 and additional pressures ‘also agreed under the previous administration’, means that despite some savings – mostly achieved from significant staff redundancies and reductions in services, according to the report – there is this major shortfall.
In February, it was revealed that a review into the charity had produced a scathing report, which was also critical of the council’s involvement, although it praised staff for their ‘extreme resilience’ despite the ‘unethical and negative organisational culture’.
It said that the review ‘identified significant failings of governance and numerous gaps in the expected level of strategic and operational capability and capacity in Active Northumberland’.
The charitable trust now has a new board and recently appointed a new chief executive.
Ben O'Connell , Local Democracy Reporting Service