Concerns have been raised over ‘high-risk’ additional costs for the multi-million pound project to revamp leisure centres in Leamington and Warwick.
Warwick District Council is planning to add an extra £1 million from its reserves to the £14.5 million bill to improve the St Nicholas Park and Newbold Comyn Leisure Centres in order to pay a contracted third party operator to lease equipment.
It will also give a further £900,000 over the next two years to help cover the operator’s up-front costs.
Labour says this is a 45 per cent rise in total in the 18 months since the project was first budgeted at £12m.
The council says it will get a better rate for leasing the equipment than the operator and the money it will recoup during the ten-year contract will far exceed the extra expenses.
But Labour councillors, who have been following the project closely and have already expressed concerns over the possibility of rising gym membership fees, have questioned whether the money could be better spent elsewhere.
Cllr Colin Quinney (Lab, Leam), said: “There is little guarantee that we will get the money back and the risks are high.
“If the money in reserve is burning a hole in the administration’s pocket, why not build or buy some houses for local residents on our waiting list? Is this sensible financial management from the Conservative administration?”
The council has been in negotiations with, and is close to announcing, an external operator to manage the leisure centres.
Cllr Peter Whiting (Con, Arden) portfolio holder for finance, said: “Following negotiations it is clear to senior officers and councillors that insisting on a constant annual payment from the operator is unlikely to produce the best outcome for local taxpayers.
“Instead, paying an initial management fee to the operator in return for guaranteed, index-linked fees in subsequent years is likely to maximise the revenue to the council over the ten years of the leisure centre contract.”