- Silence from council offices
- Red flags invisible to councillors
- Five years of failures go undetected
- What will happen next?
We are all fully aware of the devastating news last week regarding Sevenoaks Leisure Limited, who traded as Sencio Community Leisure, who ran Sevenoaks Leisure Centre, Edenbridge Leisure Centre and Lullingstone Park Golf Course on behalf of Sevenoaks District Council (SDC).
The closure of these facilities has hit the local community extremely hard and it’s time that SDC owned up to their failings inline with the incompetent performance of the leisure operator themselves.
At this time, six days since the announcement of Sencio’s liquidation, there has been no formal announcement from the council, nor it’s councillors, it’s Chief Executive, or it’s local MP Laura Trott. Up until now, they have all appeared to hide behind this shameful episode, however it has been announced that their Cabinet will hold a specially convened meeting to propose the next steps on Thursday 23rd March at 5pm.
The accusation is that SDC has failed to strip Sencio of their operators licence even though they knew the organisation was failing back in 2018. We take a look back at the timeline that has brought about this catastrophic failure of the much loved facilities:
Operator announces deficit of half a million pounds
The last time Sencio Community Leisure filed it’s Annual Return and Accounts was in 2018, where it clearly stated that it had a deficit of £556,071, rising to £3,705,071 to include their pension fund deficit1.
They also stated in this document as a going concern, and most serious consequence to their business: a significant breach of their contract; failure to successfully recruit and retain customers and members and most importantly and of the utmost concern, non-compliance of health and safety2. Red flag number one!
How these declarations went unnoticed by SDC is quite simply unbelievable and indeed questionable. Any privately run business owner would have been running the streets ringing bells in an attempt to reverse the legal contract they had with these lemmings. Instead, SDC were happy to flip the coin and help promote their £1 million investment in new gym equipment.
With no more data on the leisure operators financial situation since 2018, we entered the pandemic of 2020 and the severe issues faced all over the country by so many. The UK leisure sector was shutdown immediately through no fault of their own and in June of that year Sencio declared that without adequate support, its financial position was dire and unsustainable3.
The impact of the pandemic
The sporting community of the Sevenoaks district then sent an open letter to SDC raising concerns over the future of the districts leisure centres. In the letter it references the obesity ‘timebomb’ facing the UK, incidents of depression and anxiety which continue to rise and the ‘tsunami’ of mental health issues caused in part by the global pandemic, stating that the cost of those social challenges to the public purse is incalculable, and should SDC fail to adequately support the provision of the not-for-profit leisure services, it would be hugely disappointing.
Unfortunately for Sencio and the local communities, SDC refused the requested loan of £120,000, stating that they did not think Sencio’s back-to-business plan was sufficient for the dispersal of public money.
SDC went on to say at a cabinet meeting that documents put together by Sencio failed to give the council proof that they could make a success of the leisure centres and declined the loan request. Red flag number two!
However, in December 2020, the Council’s Cabinet agreed to give Sencio further funding of £300,000 to help deal with the current financial impact of Coronavirus, on the condition that the leisure centres reopen at the beginning of January. This was on top of a year’s repayment holiday on an existing £600,000 loan.
Council makes plans should leisure trust fold
Fast forward to July 2021 and the moment SDC crossed the line of no return. An independent report found financial and management problems with the operator, and the council said that they had taken the difficult decision to make urgent plans to provide leisure services should Sencio become insolvent4.
They also stated: “The Council has been in regular dialogue with Sencio over the past year, and there has been an ongoing concern over how it can finance itself moving forward. And in light of the operators precarious situation, were recommended to consider alternative management options to ensure the best value for the community.“
At the time Cllr Lesley Dyball, the Council’s Cabinet Member for People and Places, added: “We have taken the difficult decision to make arrangements for another company to take over from Sencio should they go into liquidation. It is only right that we should do everything possible to reopen our leisure centres and golf course as soon as is practicable should the Trust go out of business.” Red flag number three!
The Cabinet then agreed to start the process of appointing a contractor to take over the running of the Council’s leisure facilities should Sencio hand back the contract. This was the last word until January 2023.
Scrutiny committee fails proper examination
In January this year, SDC’s Scrutiny Committee, led by Cllr. Margot McArthur and Cllr. Matthew Dickins, interviewed Jane Parish, Sencio Community Leisure’s Chief Executive, where she apparently gave categorical assurances that they [Sencio] had weathered the impact of the pandemic, and seen a positive recovery in leisure5.
Additional information provided by Cllr. Laurence Ball on March 23rd: “The meeting of the Scrutiny Committee in January was chaired by Cllr Cameron Brown, who, I believe, is an advocate. Cllrs Dickins and McArthur are not on this Committee.
“When Ms Parish was questioned by the Committee it became clear that Audited Financials had not been provided for the last three years. It also emerged that the Sencio Board had told their CEO NOT to provide financial information to Scrutiny at this meeting. Ms Parish was requested to appear at the Meeting on 21 March with a detailed explanation for this. All of this information is a matter of public record.
“Several years ago a sub-committee of Scrutiny concluded that the Sevenoaks District Council was not getting value for money from Sencio. This is also a matter of public record.“
However, after more than five years of scrutinising the operator, it is utterly embarrassing that SDC and their Scrutiny Committee were unable to examine Parish and her team and their ever increasing web of misinformation properly. (We’re running out of red flags! Ed.)
Because just eight weeks later, Sencio secretly appointed Evelyn Partners to assist in their insolvency process. And here lies the problem that we now all face. With centres closed to the public, and an insolvency practitioner with the keys to the buildings, over 300 members of staff made redundant and a lack of a sport and leisure strategy from the council, it could be some time before the doors are open again.
We will be keeping you up to date on this story as it progresses, including comments made at the specially convened Cabinet meeting on Thursday 23rd March at 5pm.
If you would like to join the discussions, please head to our public Facebook group at https://www.facebook.com/groups/1338056143435327.
References:
- mutuals.fca.org.uk/Search/Society/4966
- localsportsnews.co.uk/wp-content/uploads/2023/03/Annual-Return-and-Accounts.pdf
- https://www.localsportsnews.co.uk/are-the-ongoings-between-sdc-and-sencio-really-as-transparent-as-weve-been-told/
- sevenoaks.gov.uk/news/article/255/council_makes_plans_should_leisure_trust_fold
- cds.sevenoaks.gov.uk/documents/s51999/xx%20-%20Work%20Plan.pdf?J=4
- localsportsnews.co.uk/breaking-sevenoaks-leisure-limited-operating-as-sencio-community-leisure-has-ceased-trading/
