Live Borders solution will cost up to £50,000

by OUR LOCAL GOVERNMENT EDITOR

Scottish Borders Council is being advised to commission 'external support' costing up to £50,000 as it considers a way forward for cash-strapped Live Borders, the Trust which delivers leisure and cultural services on behalf of the local authority.

It is now expected that councillors will plump for one of four options at a meeting in late June by which time consultants will have examined the pros and cons of each of the choices.

The list of options set down by council officials is: (a) continuation of the current trust model; (b) alternative trust models; (c) some services returning to SBC to deliver; (d) all services coming back in-house. A full council meeting to be held next week will decide whether to sanction expenditure to pay consultants.

That meeting will be told in a report from Avril Marriott, SBC Programme Manager, that in line with other sports and culture organisations, Live Borders has experienced significant financial challenges since the COVID pandemic in 2020/21. 

Ms Marriott states: "The Council supported Live Borders during that period through continuing to pay the full agreed management fee when services were not being delivered. Along with furlough of their staff, this allowed Live Borders to build up significant reserves which they have now fully used. During 2022/23 and 2023/24 the Council has provided additional funding to Live Borders, over and above the management fee, of £2.5m." 

In March officers met with the Chair and acting Chief Executive of Live Borders when it became clear that the Trust had a budget gap in 2024/25 of £2.5m. This was partly as a result of the commitment the Live Borders board had made to pay the Real Living Wage in 2024/25 along with a 3% pay increase for all other staff. 

"Given their reserves had been used across 2022/23 and 2023/24, a request was made to the Council for the additional shortfall. Currently Live Borders have a Letter of Comfort from the Council which runs to December 2024", explains Ms Marriott.

Since the beginning of March no fewer than seven directors of Live Borders have left the organisation which had an average of 354 employees in 2023, up from 298 in 2022.

As the report points out, the high number of resignations by directors means there is an increased risk that the Board may not remain quorate, negatively impacting on its decision taking responsibilities.

And, Ms Marriott warns: "Carrying out an options appraisal in relation to the future delivery of these services will be very unsettling for Live Borders staff and there is an increased risk of staff leaving the organisation."

The report claims it is crucial that key pieces of work outlined in the transformation programme continue, as any decisions which councillors wish to take in June will not, on their own, resolve the £2.5 million financial challenge that Live Borders currently faces, with the key cost elements being pay, energy costs and an aged property estate. 

The report reminds elected members that achieving charitable status was a key consideration when the Trust was set up in 2003, primarily as it enables it to secure relief on non-domestic rates, but also because as a charitable organisation it can access external funding sources not available to the Council.

 The current non-domestic rates (NDR) relief which Live Borders is entitled to as a charity amounts to £1.4 million. This will no longer be available to the Council if a decision is made to bring all the current services back in-house. 

"The budgetary implications of the future options outlined require to be very carefully considered, particularly from a tax perspective given the nondomestic rates relief position and VAT implications. Given the 2024/25 pressure of £2.5 million which Live Borders have reported it should be noted that there are significant financial implications for the Council whether it supports Live Borders in its current form as a Trust going forward or whether it determines that another model of delivery for sport, leisure and cultural services should be pursued."