Council continues to bail out leisure trust

Council chiefs have penned a letter to auditors giving assurances that they will continue to financially prop-up East Renfrewshire Culture and Leisure Trust (ERCLT).

Earlier this year, the local authority bailed out the Trust by handing over £225,000 to cover a huge overspend.

And the council’s cabinet members were forced to write a‘letter of comfort’to ensure the trust was able to continue operating.

On Thursday, however, high ranking councillors will be asked to promise more financial backing as part of a major review of the rust’s accounts. A report by East Renfrewshire Council’s head of accountancy, Margaret McCrossan said: “As part of the external audit of ERCLT’s accounts for 2017/18 the council is required to confirm its ongoing financial support for the Trust as a going concern.

“It is not unusual for auditors to seek such assurances from councils and it is entirely reasonable for the council to confirm its ongoing financial support for the trust to continue to provide and develop services in line with existing plans in the coming year.

“ERCLT operated within budget from its establishment in July 2015 until March 31, 2017, however, during 2017/18 it forecast a projected overspend of some £277,000, after utilisation of reserves, at 31 March, 2018.

“Management action was taken by the Trust to address this and the outturn position for the year was substantially improved with the additional council contribution reduced to £225,000 and the trust maintaining a general reserve of one per cent of budget.

“An independent review of the trust’s financial arrangements was also carried out and an action plan agreed and implemented.”

The letter is expected to be agreed despite having already been sent by Ms McCrossan to the auditors.

She insists that it was necessary to send the letter prior to approval by the council in order that the trust’s accounts could be signed-off. Ms McCrossan added:“As in previous years, we will continue to monitor the trust’s financial position throughout the year. The issue of the letter does not change the council’s budget plans for 2018/19 or beyond.

“In view of the trust’s timescales for finalising the audit of the 2017/18 accounts it was necessary to issue a letter of support prior to obtaining cabinet approval and so homologation of this action is now required.”