Council had to give a £2m bail out to company set up to cut costs

Volair Ltd was incorporated in 2015 to run Knowsley borough’s health and fitness clubs.

A council owned company set up to cut the cost of running Knowsley’s leisure centres received a £2 million bailout out last year to stop it going bust.

The company, Volair Ltd, was set up in 2015 to run the borough’s health and fitness clubs in Huyton, Kirkby, Stockbridge Village and Halewood and in 2019 also took over the running of a football centre in Prescot.

Sign up to our LiverpoolWorld Today newsletter

The aim of the company, according to a report produced by Knowsley Council back in 2015, was to save the council from spending £2 million a year on leisure provision.

However, according to recent accounts filed with Companies House in December 2021, Knowsley Council, which owns and runs the company, gave it just short of £2m last year to stop the company from running out of money.

Council support finances

The council also pays a management fee to Volair to run the services, with the company also receiving income from local residents making use of the facilities, some of which have seen increased charges in recent years.

The report said: “The impact of the COVID-19 pandemic was felt throughout the year, with several enforced closures and restrictions in place upon reopening.

“As a result of the pandemic, Volair has had an extremely challenging year with significant shortfalls in all income streams.

“The year ended with an in-year deficit of £1.903 million which was funded by KMBC (the owner) to prevent the company from becoming insolvent.”

On the future of the company, the report also stated that without significant financial support it would not be able to continue to trade.

Volair’s yearly losses

Volair Ltd was incorporated in December 2015 at Companies House.

A business plan for the company was brought to cabinet in early 2016, although the details and plans contained in it were not made publicly available for “commercial sensitivity” reasons.

By 2017, the company had filed its initial set of accounts, giving the first public glimpse into the financial situation for Volair Limited.

In that first year, the company made a loss of £801,000, largely due to the transfer of over £1 million of pension liability for employers at the centres from the council to the company.

In 2018, Volair Ltd made a loss of £171,000. By 2019, this loss had increased to £473,000.

In 2020, that figure had reduced slightly to £426,000 with the most recent accounts, filed in December 2021 showing a loss of £313,000.

Volair Ltd is now under review, with the council agreeing a £26,000 commission for Strategic Leisure Ltd to carry out an appraisal of Volair Ltd, and which is due to report back this year.

Knowsley Council were asked for a comment about the financial challenges Volair Ltd is facing. Despite several requests, the council has yet to provide a response.