Joe FitzPatrick MSP
Minister for Public Health, Sport and Wellbeing
28 July 2020
Dear Mr FitzPatrick
I am writing on behalf of the Sport Social Enterprise Network to raise some issues and concerns raised by its members. Senscot is a national intermediary which has, with others, helped to develop a support infrastructure for Social Enterprise over the last 20 years. A key part of our work is to support Social Enterprise Networks (SENs) – geographic and thematic – across Scotland.
One of these thematic SENs is the Sport SEN. It comprises of more than 100 organisations delivering sport and physical activity within local communities across Scotland. The Sport SEN seeks to facilitate peer support, networking and learning & development opportunities for organisations that are seeking to be both financially sustainable as well as using sport as the tool to address an identified social need. This approach is in line with the global Sport for Development approach where sport is used intentionally to bring about positive social change and the ‘Changing Lives Through Sport and Physical Activity’ programme of funding and support in Scotland.
Supporting Scotland’s Covid-19 response
The Sport SEN has been very active throughout the Covid-19 pandemic delivering vital support in our communities. We have been supporting and connecting our members, helping them to navigate the landscape of external guidance and support which has been gratefully received during this time. Whilst we have welcomed announcements to work through the route map, and the gradual re-commencement of sport and physical activity in a way which prioritises public health and safely, many of our member social enterprises have conveyed their deep concern in regard to the delay in re-opening many elements of the sport sector, in particular indoor sports facilities, gyms and community swimming pools.
Current challenges faced by Sport Social Enterprises
Recognising that this has been a challenging time for everyone, there are specific causes of anxiety for sport social enterprises. We have outlined these below.
Funding & loss of trading income
- Social enterprises are trading businesses – selling goods and services – whose primary objective is to achieve social and/or environmental goals. They have been unable to generate income but have often fallen through the cracks in terms of funding support due to eligibility criteria which appears to penalise organisations who are striving to operate in a self-sustaining and responsible way.
- Organisations with reserves have been expected to use these to meet ongoing costs. There have been instances where funders have perceived monies as ‘reserves’ however they have been restricted for other projects, or for future maintenance and repair of facilities. These have been exhausted for many, but there is now limited funding available from programmes such as the Third Sector Resilience Fund. For organisations who cannot yet generate any income, funding to ease immediate cashflow pressures is still required and concerns have been raised around the lack of communications about future funding support.
- In relation to the above point about funding for other projects, several social enterprises are in the middle of capital facility development projects which were vital to their business plans in terms of future revenue generation and the essential services they can deliver within their communities. These projects are currently on hold, which has resulted in immediate cost implications, and concerns about the future availability of grants to fully fund projects. It’s considered imperative that both capital and revenue funding will be available to support organisations moving forward.
- Some Local Authorities have already indicated to service providers that Service Level Agreements (SLA’s) will be reviewed in January 2021. Whilst the honouring of SLAs has been greatly appreciated to date, the consequences to some organisations will be detrimental if they lose these contracts. This highlights a longer-term concern – and collectively, the sport social enterprises have voiced concerns around the lack of long-term planning and feel that to date, decisions and support have been short-term fixes but now a longer-term focus is required in order to support organisations through the next 6-12 months.
- Although the sector is partially open, there are many providers of sport and physical activity who cannot yet open their doors, notably indoor sports centres, swimming pools and gyms. There has been no additional support offered to organisations within the sport sector who are not yet allowed to re-open and begin to generate income. Arts and Culture have received a sector specific funding boost, yet there has been no announcement of similar funding to support the sport sector.
- It is anticipated that many indoor sports centres will only re-open for their own individual members and that Local Authority/ALEO indoor facilities such as studios and halls will not be available for booking by other clubs and organisations who rely on these spaces to deliver their services to generate income. Therefore, although sports centres may re-open, many organisations will continue to be unable to trade as they have no access to space in which to do so.
- The same applies to school halls. It is unlikely that organisations, clubs and individuals will have access to school facilities, where these have previously been widely used for the delivery of sport and physical activity outside of school hours and are vital to not only the survival of many organisations but the wellbeing of users.
Costs incurred to prepare for re-opening
- Due to physical distancing measures, even when restrictions begin to be eased, opportunities for revenue generation and capacity to deliver will be greatly reduced. Many of the main income generating activities which often subsidise not only access to other parts of a facility, but programmes for vulnerable and disadvantaged groups – those who will potentially be most at need as we move out of lockdown – will still not be able to re-start. Pubic concern over returning to sports facilities will also likely lead to reduced footfall and organisations report that they are already losing members. In some instances, additional staffing resource will be needed to safely deliver activities, carry out extensive cleaning protocols and manage customers, however at reduced capacity this may not be feasible. Therefore, the financial viability of re-opening facilities remains a concern and perhaps, some of these sports facilities will simply be unable to open.
- Considerable upfront costs have been incurred in order to install necessary physical measures at facilities, complete comprehensive risk assessments and various HSE testing requirements, and change service design from face-to face to online (often free of charge) back to face to face but with physical distancing in place. Not for profit organisations, like social enterprises, are meeting these costs despite having no revenue and no indication of when/if they will even open their doors again. Costs of up to £5,000 have been quoted by some members to date and funding to help with these costs would be well received.
- Decisions are currently being taken with limited, confusing or changing guidance and timescales. It is recognised and understood that responding to a pandemic of this nature is unique and that it is impossible to set specific timescales. It should be noted however that it is affecting the ability of organisations to develop and implement business continuity plans. Multi-sport centres have voiced concerns about the varying recommendations from Governing Bodies across different sports which they will have to review, understand and adhere to. In regard to the procurement of essential health and safety equipment, in many instances, organisations are being advised of long lead in times to receive delivery, so they need to make these decisions now despite a lack of communication around timescales for re-opening.
- Similarly, organisations need to make decisions now about bringing staff back from furlough, despite not knowing what, if any, financial support will be available or what level of service they can deliver and when. Difficult decisions about redundancies are being taken and some organisations have started restructuring and redundancy processes.
- Peak seasons vary for organisations delivering sport and physical activity. Many have already lost income from their peak season and are unlikely to deliver services until April next year. Many are worried that their upcoming peak season will be significantly affected, especially if a second wave of the virus hits over the next few months. One operator has advised of a loss of £70,000 since lockdown commenced and another predicts a loss of 50-75% of their income for the year, assuming some level of service returns soon.
- Social enterprises by their very nature are delivering programmes to address local community need and create positive social impact. Sport social enterprises are working with some of the most vulnerable and disadvantaged groups, tackling a variety of social issues, including community safety, mental and physical health and wellbeing, loneliness and isolation. These are issues which have been repeatedly highlighted as significant concerns throughout this pandemic, however many of the social enterprises who were delivering effective programmes to address these issues are unable to re-open. Without satisfactory support, these organisations may be forced to close their doors, leaving a substantial gap in existing service provision which would have helped to tackle the social issues facing the country as we recover from this pandemic.
Thank you for taking the time to consider the points outlined above. We would welcome the chance to discuss further with you some of the ongoing challenges facing sport social enterprises. We would also welcome an opportunity to offer some constructive solutions in terms of designing a package of support to help ensure that sport social enterprises will be able to continue to deliver vital community services into the future, despite this prolonged period of closure.
Sport SEN Coordinator (Senscot)