Southwark Council is set to cut ties with a private leisure firm it bailed out to the tune of £1.2 million during the pandemic.
The local authority is set to bring services in-house from June 2023, closely following Lambeth Council which plans to do the same in April 2023.
Everyone Active, the authority’s leisure provider of five years, said it was “obviously disappointed” with the news.
Council bosses approved the move on September 14.
A report that went before councillors said that the leisure contract with Everyone Active was “performing well operationally” before the Covid-19 pandemic but “not achieving the expected income levels”.
The firm said the rise “of low-cost ‘budget’ gyms in Southwark and the significant success of the council’s free swim and gym scheme [were] major factors causing the financial under performance”.
The council approved a £1.2 million bailout for Everyone Active in July 2020 to cover its four-month closure from the start of the pandemic.
Cllr Alice MacDonald, cabinet member for leisure said the move was “exciting and bold”.
She said: “The Covid-19 pandemic has had a huge impact on the leisure sector in general and on the operation of the council’s leisure facilities.
“As we look towards the recovery we have the opportunity to think innovatively about how we deliver leisure services for our residents.
“This is an exciting and bold move to deliver leisure services through an in-house team and is in line with our preference for in-house services which helps ensure we put residents at the heart of everything we do.”
Mark Basker, Everyone Active’s regional contract manager, said the company was “obviously disappointed” by the news as it is a “pleasure working in partnership with the council”.
But he said: “We respect any decision they make. We are incredibly proud of what we’ve achieved in Southwark over the past five years, including the redesign and refurbishment of the fitness provisions at both Peckham and Camberwell Leisure Centres in 2017.
“A number of leisure centres in Southwark were the first local authority-owned facilities in the country to have successfully achieved the ‘Fit for Business’ accreditation in 2020.
“The certificate recognises the high-quality services provided to ensure Covid-19 risk management and prevention and was awarded by nationwide Quest auditors, Right Directions.
“Prior to this latest achievement, Everyone Active has previously received recognition for its outstanding services by Sport England’s leading national quality scheme, Quest.”
He added: “The operation of the centres will remain the same until the end of our partnership and we will of course keep our customers and colleagues informed of further details regarding the management of the centres thereafter.”