Content

Salford City Council - Record of Decision
(Cabinet)
I
Paul Dennett, City Mayor, in exercise of the powers contained
within the City Council Constitution do hereby approve:

1.   
To note the contents of the report presented to Cabinet.

2.   
Approve the payment of £500,000 to Salford Community
Leisure.

3.   
Approve the use of earmarked reserves as detailed in Appendix 1 of
the report presented to Cabinet.
The Reasons are:
 

Over the
past decade, the impact of austerity has significantly restricted
the Council’s ability to invest in Salford Community Leisure
(SCL) services. Despite these constraints, there has been a
continued expectation for SCL to expand and enhance its offer to
residents, often without any corresponding increase in budget. This
has placed considerable pressure on the organisation, particularly
as inflation and rising costs—such as pay awards and
maintenance—have consistently outpaced available funding.
While SCL has achieved strong post-pandemic income growth and has
implemented a range of efficiency measures, the combination of
static external funding, capacity constraints, and the erosion of
grant values by inflation has left the service facing persistent
deficits. Without additional investment, SCL’s ability to
maintain and develop its services for the community is at risk, as
evidenced by the forecasted deficit position and the need for
one-off support from Council reserves. Alongside these challenges,
both SCL and Salford City Council have continued to undertake
capital investment to support and improve the operation of leisure
assets. This ongoing investment has been vital in enabling service
enhancements and income growth, but it also places further demands
on limited resources, highlighting the need for a sustainable
long-term funding solution.

 
·        
For the financial year 2024/25, SCL is reporting a
deficit of £317k (subject to final audit), a significant
improvement from the £1.4m deficit in 2023/24.
·        
Reserves are expected to stand at £512k by
year-end. This improvement is attributed to increased customer
income, notably an additional £500k from fitness services,
and £1.6m in health-related project grants.
·        
However, staffing costs have risen by £800k
due to a 5% pay award. The Clarendon insurance claim of £250k
remains unresolved.
·        
For 2025/26, a projected deficit of £813k
would deplete all reserves, resulting in a £301k funding gap
and potential insolvency without intervention.
Options considered and rejected were:

This was the only option available.
 
Assessment of Risk:  Medium
 
The source of
funding is: 
Earmarked reserves.
Legal Advice obtained:
Provided by Tony Hatton –
Solicitor – Shared Legal Service
Local authorities frequently fund third-party
(often third sector/charity) organisations to deliver
services, and the risk of these partners failing is a recognised
issue. This is part of a broader, complex landscape where councils
themselves face significant financial pressures and funding
uncertainties. 
The Council relies on funding SCL to ensure
service delivery, local needs and competitiveness in the market,
but it seems clear that SCL faces significant financial pressures
going forward and the additional funding is required as a short to
medium-term measure to mitigate service disruption pending the
Council making decisions on efficiencies, savings and establish
longer-term stability to rebuild reserves, so robust monitoring and
evaluation of SCL should continue during the delivery of the
services undertaken by SCL.
The additional fees are recommended as being
desirable and necessary to bridge the short-term funding gap, which
is still within a level of tolerance permitted by the Public
Contracts Regulations (PCR) which permit through regulation 72, a
number of “safe harbours” when contracting authorities
need to modify existing contracts in a way which does not require a
fresh procurement.
The Council constitution confirms that
“the City Mayor may apply reserves in-year by use of reserves
(in addition to the use of reserves planned in the budget
calculations), provided that such use of reserves does not exceed
£1 million (£1,000,000) in aggregate in a financial
year and the Chief Finance Officer has certified in writing that
such use of reserves would not cause the Council’s overall
reserves to fall below a prudent level….and …Any such
use of reserves shall be reported to the next meeting of
Council.”
 
Financial Advice obtained: Provided by David R Mills – Strategic Head of Finance and
as shown in the body of the report presented to Cabinet.
 
Procurement advice obtained: Not applicable
 
HR Advice
obtained: Not applicable.
 
Climate Change Advice: Not
applicable.
The following documents have been used
to assist the decision process:

·        
Briefing to Deputy City Mayor and Lead Member for
Finance, Support Services and Regeneration

·        
Briefing to the Lead Member for Culture, Heritage,
Equalities, Sports and

Leisure.
Contact Officer:
David
R Mills – Strategic Head of Finance                                
Telephone number: 0161 793 2858
 
The appropriate
scrutiny to call-in the decision is the Community and Neighbourhoods Scrutiny Panel.        

 

 

Signed: Paul Dennett
_____________            
          
Dated: 10th December 2025
           
City Mayor
 

For Democratic
Services use only

 

This decision was
published on 10.12.25                                           

This decision will
come in force at 4.00 p.m. on 17.12.25                   
                              
unless it is called-in in
accordance with the Decision Making Process Rules.