21 Mar 2022
UK Active renews calls for VAT cuts to offset increases in energy costs
BY Tom Walker
Lobbying is gearing up in advance of the Spring Budget this week, with UK Active calling on the government to support the sector in tackling increases in energy bills.
In a letter to the Chancellor, CEO, Huw Edwards, warned that without support, many operators could be forced to increase prices, reduce services or – in the worst scenario, temporarily close facilities.
To help lessen the impact, the industry body is calling on the government to provide support in two key areas.
The first is to provide the sector with a VAT exemption – support that was provided to other sectors such as hospitality and tourism earlier in the pandemic, but which has so far eluded the activity sector.
The second is for local and central governments to work with public sector leisure operators to address the short-term financial pressures they face – exacerbated by running swimming pools – and come up with a long-term strategy to keep them open.
Edwards said: “The government should be extremely concerned about both the health and economic impact of the energy crisis on fitness and leisure operators.
“Rising energy costs will disproportionately impact our sector – particularly larger, energy-intensive gyms and leisure centres with swimming pools – which are now at risk.
“Our members will want to avoid passing on these cost pressures to their customers, especially given the rise in the cost of living, but this might become unavoidable."
UK Active estimates that combined gas and electricity costs for 2022 could increase by up to 100 per cent when compared to bills paid three years ago in 2019 – the last full operating year, pre-pandemic – a hike that could threaten services and Levelling Up ambitions said Edwards.
This estimate is based on evidence gathered from operators across the public and private sectors.
In a separate survey of its public leisure trust members, Community Leisure UK revealed an expected average energy bill of £3.2m per organisation in 2022, which would represent a 113 per cent increase over the last three years if compared to an average cost in 2019 of £1.5m.
CLUK also found that due to the high energy consumption of swimming pools, there would need to be a subsidy of £5 per visit in order to meet rising operating costs for 2022-23.
UK Active said the energy crisis has hit the fitness and leisure sector at a time when facilities are still recovering from major losses incurred during forced closures and reduced footfall caused by the pandemic.
Edwards also flagged up the upcoming Commonwealth Games, saying “We don’t want to see a situation where vital community facilities continue to struggle to operate while we prepare to host the Commonwealth Games this summer.
"Such a situation would no doubt cast a shadow over the Games, raising difficult questions with regards the legacy value of hosting such an event.”
Liz Terry, editor of HCM said: "This sudden increase in the price of oil and gas must drive an absolute commitment right across the sector to investing in non-carbon generating energy sources.
"We want to see the industry lobbying for funding to convert gas guzzling leisure centres into sustainable facilities through the use of things such as groundsource and airsource heat pumps, locally generated energy and through a reduction in energy need through the use of better building management systems.
"I fervently hope this global energy crisis will inspire everyone in the sector to start pushing in the right direction at a much more rapid pace so that even if financial support of some kind is needed in the short term, in the medium term we become self-sufficient for power.
"It's time for the sector to really galvanise and go sustainable and we look to industry leadership right across the sector to make this happen with all possible haste."
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