Wednesday 24 July 2024
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Finances of Ice Centre and Motorpoint Arena to be discussed after council props it up with more than £7m of loans

The financial future of the council-owned National Ice Centre and Motorpoint Arena is to be discussed after the Labour-run authority propped it up with more than £7m of loans.

The National Ice Centre and Motorpoint Arena will be discussed by Nottingham City councillors on Tuesday, July 19 at Loxley House.

Parts of the meeting will be held behind closed doors.

However, a report and presentation published ahead of the meeting shows the company had a balance sheet deficit of £5.8m up to March 2022 and is dealing with ‘a massive backlog of maintenance’. It has also struggled to recruit some staff.

The financial pressure relates to the pandemic, including show and event cancellations.

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But the company says it has bounced back with sell-out shows by Sam Fender, Stormzy, and Craig David and crowds at 29 Nottingham Panthers matches.

Between August and March this year it brought in 350,000 arena customers, with the ‘busiest ever’ February, March, April, and May for arena events.

The report states that net loss from the Covid pandemic was £5.1m, after the company accepted grant funding of £1.5m.

The company’s balance sheet deficit is therefore £5.8m up to March 2022, compared to £6m the year before.

Further records at Companies House show the company carried out extensive redundancies of more than 100 permanent and 1,000 casual staff in late 2020.

However, new staff have been recruited but some posts such as technical, event crew and cleaners are proving difficult to fill.

The company says one risk is the “significant backlog of maintenance, repairs and capital projects”.

However, 42 capital and major maintenance projects are under way, including flooring, CCTV and an emergency generator overhaul. The cost for this has not been published.

Risks to the venue include ‘event tickets likely to rise’ and that ice sports are ‘relatively expensive’, therefore consumer income could be squeezed. Inflation is also noted as a risk.

Opportunities include ‘a new premium seating offer’ at the arena and a chance to capitalise on the arena’s 25th anniversary.

In a statement of accounts on Companies House for the year ending March 2021, the then director Richard Stevenson said: “The company’s business model is almost entirely dependent upon the arena events creating sufficient profits in order to meet the high fixed costs of a complex ice facility, which has a rebuild value of £120m.

“The closure of the arena for 18 months has resulted in significant losses in 2020/2021 and the first half of 2021/22 which have resulted in a significant debt burden for the company.”

The report says the council has confirmed its willingness to financially support the company for a minimum of 12 months and provided “a loan facility of £7.4m” with repayment over a 15-year period which will commence in 2023.

The provision of a further £1.5m has also been confirmed should it be required.

The council has also acknowledged its contractual obligations with Sports England to provide “sufficient financial support” to the company arising from any deficits incurred from operating activities.

Cllr Andrew Rule, opposition leader of the Conservative Group, said with the pressures of running statutory services, decisions need to be made on whether owning the Ice Centre is feasible.

He said: “I think prior to Covid it has been one of their most successful ventures but at the end of the day the financial position of the council as a whole is we are not in the position where we can financially support group entities to any great level.

“With Robin Hood Energy, we put all our eggs in that basket, we dropped that basket and now we have no money to put into these other companies. We have also got the pressure of delivering statutory services. These are legacy issues that have come home to roost.”

Nottingham City Council is reviewing all the companies it owns after the demise of Robin Hood Energy cost taxpayers an anticipated £38m.

The council energy company collapsed in January 2020 and a government-appointed improvement board was set up to monitor and scrutinise the way the Labour-run authority operates.

A transformation programme is under way, which includes changing the ‘legacy culture’ of the authority, reducing its debt and spending, and a review of the companies it currently owns.

The council is also waiting on news from the Government on whether it will finalise a decision to bring in commissioners to intervene in its operation following ongoing concern from Whitehall over the authority’s finances.

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