Agenda item

In response to a question at the previous meeting, Peter Gilpin, CEO of LED Community Leisure provided a summary of the relationship between LED and the Ocean family entertainment centre on Queen’s Drive.  The following points were highlighted:

·        LED is in its sixth year of a 25 year lease of the Ocean building and is a commercial tenant of East Devon District Council

·        The lease of the Ocean building is entirely separate from LED’s leisure centre operations for EDDC and is therefore accounted for separately

·        None of the management fee paid to LED for the management of EDDC’s public leisure services is used to support Ocean

·        Prior to the first Covid-19 lockdown in March 2020, Ocean was generating an operating surplus

·        Ocean was closed for three months due to the first lockdown and EDDC granted a rent deferral for this period, to be repaid in 2021 with no further deferrals being either requested or granted for subsequent lockdowns

·        LED is a Community Benefit Society registered with the Financial Conduct Authority (FCA)

·        Its subsidiary trading company, LED Enterprises Ltd deals with the non-charitable income which must be accounted for separately.  This income is derived from soft play, events and the sale of food and beverages at Ocean and The Pavilion, with any surplus transferred to the parent Trust

·        As a limited company, LED Enterprises Ltd is registered at Companies House and submits financial accounts which show the commercial, non-charitable activities

·        Figures for LED Enterprises Ltd profit before tax for the last 3 years were set out in Peter Gilpin’s accompanying report

·        Profit before tax for 2020 would show a loss due to four months of closure due to Covid-19 and it is expected that this will be recouped when trading returns to pre-Covid-19 levels

·        Group accounts are produced by LED Leisure Management Ltd and show a total figure for income and expenditure from both the sports and leisure activities and the non-charitable income from the trading subsidiary LED Enterprises Ltd

·        Ocean has a turnover of £2 million per annum, employs approximately 75 local people and purchases mostly from local suppliers, which together generates an estimated £1.5 million for the local economy.

The Chair thanked Peter Gilpin for LED’s work during the difficult circumstances of the pandemic.

During discussion, the following points were noted:

·        It is not possible to show financial accounts for Ocean as the income has to be split due to the reporting requirements for the FCA and Companies House, as outlined in the report

·        Members would welcome clarity regarding the accounts for Ocean and The Pavilion as separate entities

·        Accounts for The Pavilion are provided to EDDC under LED’s leisure management contract

·        Peter Gilpin advised that the top floor of the Ocean building was viable and busy during more normal times, with bookings for weddings and conferences.  As this is a commercial operation, concern was expressed that the Delivery Group does not seek to micro-manage Ocean.  EDDC could assist with the promotion of the top floor space at Ocean

·        Simon Davey advised that EDDC receives detailed management accounts from LED and that the EDDC subsidy for leisure and culture was transparent.  There could be a concern over the potential for cross allocation of staff overheads, but information relating to accounts for Ocean and The Pavilion was clear and could be made available to members on a confidential basis

·        Concern was expressed that there should be no overlap between the work of the Queen’s Drive Delivery Group and the LED Monitoring Forum

The Chair thanked Peter Gilpin for his report which was noted.