Knowlsey Council gave leisure firm £2m to prevent insolvency

Volair runs a number of health clubs and a football centre in the Knowsley Council area

A council gave almost £2m in 2021 to a firm it set up to cut the cost of running leisure services to stop it "becoming insolvent".

Volair, which was launched in 2015 to cut Knowsley Council's annual £2m leisure spend, runs clubs in Halewood, Huyton, Kirkby and Stockbridge Village and a Prescot football centre.

The firm said it had seen "significant shortfalls" due to Covid-19's impact.

The council said it stepped in to ensure the services stayed open.

The Local Democracy Reporting Service said accounts filed in December showed the council gave the firm, which is run by councillors and council officers, £1.903m in 2021.

'Material uncertainty'

A report produced as part of the company's accounts said Volair had "an extremely challenging year with significant shortfalls in all income streams".

"The year ended with an in-year deficit... which was funded by [Knowsley Council] to prevent the company from becoming insolvent," it said.

It added that without "significant financial support" from the council, there would be "material uncertainty regarding the ability of the company to remain fluid and therefore continue to trade".

A business case brought before the council's cabinet in 2015 proposed the firm to manage the borough's leisure services with an aim to eliminate a dependence on council funding by the end of its fifth year.

However, that has now been changed to seven years and the council has also agreed to commission a management consultancy company to carry out an appraisal of Volair, with its report due later in the year.

Labour-run Knowsley Council said in a statement Volair "had been a very positive step forward".

However, it said the government's allocation during the pandemic of £374,000 to such operating business models "failed to provide anything like an adequate level of support".

The authority said it chose to "step in to ensure the continued provision of leisure services in the borough" rather than close the centres and requests for "fair and equivalent funding" for lost leisure services income had all been rejected by the government.

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