Swansea Council could spend up to £210,000 this year subsidising energy costs for Swansea Arena in a move questioned by the leader of the opposition. Cllr Chris Holley said he understood the rationale for the Labour-run council providing energy relief for leisure centres and the Wales National Pool, Sketty, but that he wasn't convinced about large-scale support for a venue run by a private company, Ambassador Theatre Group (ATG).
Addressing a cabinet meeting, the Liberal Democrat councillor said: "The reason I ask that is there are lots of businesses in Swansea that have gone bust. There's lots of restaurants, there's lots of public houses and there's lots of clubs which are all suffering." Cllr Holley acknowledged that the council had backed local businesses financially in recent years, but said that, in his view, the level of support offered for ATG "seems to be proportionately larger than many others".
At that point of the meeting cabinet hadn't approved the energy relief, but a report said the energy bill for Swansea Arena - which ATG runs on behalf of the council - was £694,429 in 2022-23, way more than the £177,338 initially forecast in a business plan. This was due to the unprecedented spike in energy costs fuelled by the war in Ukraine. You can get more Swansea news and other story updates straight to your inbox by subscribing to our newsletters here.
The report said: "Strong income thorough commercial activity, energy-saving measures through initial investment and good housekeeping have mitigated this figure but it is a reality that the wholesale cost of energy is significantly higher than originally budgeted."
Energy costs are now finally starting to fall, but ATG's estimated bill this financial year for the LED-clad arena is £402,813, which is considerably more than an initial business plan forecast of £167,196. The report said that, although a small proportion of the shortfall could be deducted, it would still leave ATG with a bill £208,347 higher than anticipated.
It added: "In order to support ATG through this challenging period whilst the venue continues to grow its business through commercial activity and further establishes itself during the early years to reach its full potential in the mature years, it is requested that the council fund the predicted increase in energy costs in year 2023-24, of up to £210,000."
The report also recommended that the council provided up to £1,020,570 to subsidise energy costs for the LC and six other leisure venues which are run on behalf of the council by an organisation called Freedom Leisure. Another recommendation was £200,000 of energy support costs for the Wales National Pool.
Responding to Cllr Holley, council leader Rob Stewart said the authority had taken significant steps to support businesses and arm's length organisations like Freedom Leisure and wanted to ensure that the popular venues they ran remained open, which some other councils weren't able to do.
The council has set up an energy relief fund of up to £15 million in 2023-24 for schools, council departments and "strategic partners" such as leisure centres and care homes. Cllr Stewart said this was necessary due what he said was a lack of UK Government funding.
He said ATG, which rented the arena from the council as part of a 30-year lease, was performing ahead of its business plan but that it nevertheless faced energy cost challenges.
"In addition to that, it is a facility that we would not want to see any interruptions or closures (to) while getting to the maturity of its business case," said Cllr Stewart. "So it is justified in terms of the arrangements, and it's there to help make sure that this peak and spike in energy prices is something that those important institutions can ride out."
Cllr Stewart added that a further £6.2 million of grants were in the process of being distributed to businesses in the county and that significant support had been provided to Swansea Market traders. Cabinet went on to approve the provision of up to £210,000 for arena energy costs and the £1,020,570 and £200,000 sums for leisure centres and the Wales National Pool.
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