Left In The Dark
– The Need For Greater Energy Support For Sports Facilities

By Kay Desai, Legal Director at Gowling WLG.

The UK Government scaled back its energy support scheme from April 2023 to focus on heavy energy-using sectors. However, this does not currently include the leisure sector which could suffer severe effects from this, including stadiums and sports venues, which have already faced a challenging period during the pandemic.

With current pressures on the NHS, sports centres can play a role in reducing this by supporting a healthy lifestyle for the public so fewer people are admitted to hospitals and health facilities. Therefore, the industry must start taking the necessary precautions to enhance their energy efficiency, such as installing smart utility metres to help limit their energy usage and save money. This article will discuss what actions stadiums and sports venues can take and what support would minimise the risk they are facing.

Under the new Energy Bills Discount Scheme, businesses will get a discount on wholesale prices rather than costs being capped, as under the current one. However, sports facilities and venues will not be able to receive this discount due to the government not classifying any facilities in the leisure industry as energy intensive, putting them under even greater financial pressure and potentially causing closures.

There have been serious warning signs for sports facilities since the COVID-19 pandemic when venues were forced to close for months and footfalls nosedived, with business in the sector losing vital revenue but still with overheads to pay. Unfortunately, matters have not improved. Although restrictions implemented during the pandemic have been lifted and some sense of normality in day-to-day life has resumed, global events have caused energy prices to spike significantly.

In response to the new Energy Bills Discount Scheme, leading organisations from the leisure sector and local government have come together to ask for more support for grassroots sport and physical activity, submitting a letter to Prime Minister Rishi Sunak. Along with top athletes, the Rugby Football Union (RFU), England and Wales Cricket Board (ECB), British Cycling, Swim England and the British Paralympic Association have all signed the letter.

UKactive, a not-for-profit health body for the physical activity sector, has stated that even under the The Energy Bill Relief Scheme 74% of council areas were already classified as “unsecure”, increasing the risk of closing leisure centres or reducing their services before March 2024. Additionally, over 300 leisure centre owners have already attempted to mitigate against higher bills, including reducing their hours, increasing their fees or lowering pool temperatures to ease financial burden.

A survey of public leisure trusts from Community Leisure UK (CLUK) supports UKactive's fears for the sector which revealed an average energy bill of £3.2m per organisation in 2022, a 113 per cent increase compared to an average cost in 2019 of £1.5m.

UKactive has called on the Government to provide two key areas of support that are in its control to help the sector. Firstly, a VAT exemption which has been provided to other sectors during the COVID-19 pandemic, finally extended to sports facilities to help ease some of the costs, including a resolution to commercial rent arrears, that sees a fair ‘sharing of the burden’ between commercial tenants and landlords. Secondly, for local and Central Government to work with public leisure operators to not only address the short-term financial pressures they face but to also come up with a long-term strategy for the sector.

The year ahead will be concerning for operators of sports venues and stadiums as overheads continue to rise and little support is offered to alleviate increased financial outgoings. They will be hoping that the Government introduces additional support measures to help them but it may take some innovative thinking if they are to avoid dropping the ball. Already some venues, such as the Tottenham Hotspur Stadium, are looking at expanding the number of concerts they can hold in a year to increase their revenues, and it's likely we will be seeing others follow suit with varying ideas to diversify their income and stay ahead of the game.