DENBIGHSHIRE County Council’s cabinet has agreed to hand its leisure company an extra £571,000 amidst mounting cost pressures.
Denbighshire Leisure Ltd (DLL) says that “since its creation” the company “has absorbed inflationary pressures for pay and other running costs” without “receiving an uplift” in the council contribution.
DLL claims the costs for 2020/21 to 2024/25 have increased by £3.1m, insisting it has met this need “by growing its business in a commercial manner as was intended in the original business case”.
The council currently pays in the region of £2.3m per annum to the company for leisure services.
But DLL says it is reaching its “operational ceiling” based on current cost and income streams, with its ability to grow “restricted” by complying with the council’s employee terms and conditions.
The company initially submitted a subsidy submission to the council for £1.15m for the financial year 2025/26, but the sum has been revised following a negotiation with senior leadership teams.
The initial request was made before the budget was set and the pay award for council staff, which included DLL workers, was reduced from an anticipated 5% to 3.2%, which also took into account National Insurance payments.
The report states: “The decision to award additional funding in year (2025/26) rests with cabinet, and this can be funded from in-year underspends.
“This funding will need to recur into at least 2026/27, and therefore a pressure of equivalent amount will need including in the 2026/27 budget.”
Chief executive Graham Boase said there was financial considerations for DLL that even extended to how weather affected how leisure services were used.
Cllr Barry Mellor pointed to the DLL takeover that fell through earlier this year.
The planned £1.5m buyout by River Capital, a subsidiary of the Merseyside Special investment fund (MSFI), collapsed when some councillors raised concerns after a behind-closed-doors vote for the deal.
This led to Cllr Gwyneth Ellis resigning from the cabinet in protest at the move after some councillors raised questions about the buyout of a council asset.
“This is just a prime example. When the deal fell through after this full council approved the deal, it was so unfortunate that it didn’t go through because we wouldn’t be here today,” said Cllr Mellor.
“Hopefully DLL would have been spreading its wings and bringing more profit in, but we are where we are.”
DLL runs eight leisure centres, the SC2 Water Park in Rhyl, the 1891 Restaurant and Bar at Rhyl’s theatre, Rhyl Pavilion Theatre, Rhyl Town Hall, North Wales Bowls Centre, Nova in Prestatyn, and Ruthin Craft Centre and its Cafe R eatery, employing well over 500 members of staff. The cabinet vote was unanimous.
