Agenda item

The report details the feasibility and financial considerations for capital borrowing to fund a two-storey extension to Two Riversmeet Leisure Centre (2RM) to address the identified need for dedicated studio space in Christchurch. The investment aims to enhance the centres health and fitness offer, increase membership and income whilst supporting community wellbeing and aligning with the Councils corporate strategy.

The Audit and Governance Committee is asked to consider and recommend to Council the approval of an increase in the authorised borrowing limit of the Council to accommodate the £1.8m financing for the extension at Two Riversmeet Leisure Centre proposal.

NOTE: In relation to this item of business, the Committee is asked to consider the following resolution in relation to any discussion on the exempt appendix 2 to the report:

“That under Section 100(A)(4) of the Local Government Act 1972, the public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Paragraph 3 of Schedule 12A of the Act and that the public interest in withholding the information outweighs such interest in disclosing the information.”

The Portfolio Holder for Destination, Leisure & Commercial Operations presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'E' to these Minutes in the Minute Book.

The report detailed the feasibility and financial considerations for capital borrowing to fund a two-storey extension to Two Riversmeet Leisure Centre (2RM) to address the identified need for dedicated studio space in Christchurch. The investment aimed to enhance 2RM’s health and fitness offer, respond to growth in the leisure industry, increase membership and income whilst supporting community wellbeing and aligning with the Council’s corporate strategy. The Portfolio Holder explained in more detail the reasons for providing these facilities and why this should be on site rather than in a separate location. Cabinet on 14 January 2026 had recommended to Council to agree the recommendations in the report including approval of option 2, subject to planning permission.

The Assistant Chief Financial Officer clarified that the proposal sought to take out borrowing against the Council’s set limit rather than exceed it. He advised that the word ‘limit’ be deleted from recommendation d. of the report. The Committee was asked to consider whether the information provided gave sufficient assurance about the project and the ability to pay back the borrowing in order to recommend to Council that the increasein the authorised borrowing be approved.

The Portfolio Holder and the Head of Leisure and Events responded to questions and comments on the following key lines of inquiry:

What were the risks associated with borrowing?

Risks included not achieving the anticipated membership sales uplift and the income needed to repay the borrowing. This should be balanced against the risks of doing nothing which included losing members by not responding to the demand.

What other options had been considered?

Remodelling/repurposing the existing space and the use of separate location had been looked at but discounted for various reasons including structural constraints, operational challenges and disproportionate costs.

Why was 2RM being taken forward now rather than holistically as part of the forthcoming leisure centres transformation?

The option of including 2RM in the wider review had been considered. However, there was a need for targeted investment in facilities now, a need to apply for planning permission and to avoid ever-rising costs.

Were there other methods of delivery which provide more options and funding streams, such as BH Live or community partnerships?

The Portfolio Holder acknowledged that there were different governance models for leisure centres, these were not risk free either. He commented on the various complexities involved in dealing with BH Live, the difficulties around grant funding as a local authority and the Government’s view that leisure centres were commercial operations.

How was the borrowing figure of £1.8million agreed and how was the 18% uplift in membership arrived at when sector growth was 6.1%?

There had been input from the Facilities Management and Project Management teams in the costings and these had been reviewed at every stage with the Finance team. The 6.1% was a national annual growth figure without factoring in any investment. It did not discern between facilities with or without studio space. There was confidence in the 18% figure. Membership forecasts and income streams had been analysed, noting the importance which members placed on swimming pools and studio space.

Whether all eventualities relating to Planning been considered?

The potential for the planning process to raise additional issues/costs had been factored in. Preplanning advice had been sought and the project steering group would robustly monitor risks and mitigation. Plans would be checked to ensure they were fully compliant with all requirements and it had been noted that there were forthcoming changes in building regulations.

The Portfolio Holder also confirmed that there was a business case for the proposal and that the income was intended to pay the interest.

Some Members were concerned at a lack of information included with the report to provide assurance that there had been a sufficient assessment of options, finance and risk. This did not necessarily mean that there was a lack of support for the proposal in principle, rather that it was at this early stage that the most rigorous scrutiny was required. Members commented on the need for more detail around the robustness of the projected income figures, how the proposal correlated with other leisure centres and whether the proposal was value for money in terms of the cost/benefit of this scheme compared to other projects which may miss out as a result

RESOLVED to defer this item until the Audit and Governance Committee has been presented with more information including the business case, opportunity cost, options appraisal and sensitivity analysis.

Voting: For – 4, Against – 3, Abstain – 1