Investigation reveals bosses had enough cash to keep gym open for three more years

23rd January 2017

Major questions over the financial management of a local charity have been asked after contradictory accounts were discovered by a Southport’s Champion newspaper investigation.

The report revealed that bosses at YMCA Sefton were sitting on a healthy £1million in unrestricted funds just nine months before its shock closure, according to a financial report to Companies House.

The report from the board last March even stated that bosses at the YMCA centre in Hoghton Street, Southport expected the centre to ‘continue operations for the next two to three years.’

In the event, just nine months later, they shut down the centre with just one day’s notice to staff and customers – lurching from a seemingly healthy financial position to unexpected financial troubles.

The ownership of YMCA Sefton has since been transferred to YMCA Liverpool, along with all the remaining funds.

A spokesperson for the board of trustees said that the controversial decision to close the Southport operation was made as part of a takeover bid by YMCA Liverpool, who have now enveloped Sefton YMCA into their day to day business.

They said a review of their funds suggested there was no longer any financial viability to running the gym but refused to go into further detail.

It is unknown if the leftover funding will be put to use in Sefton or transfer to Liverpool.

Yet this was despite clear claims by YMCA Sefton that there was enough money to keep going for three years.

A spokesperson for the trustees told our reporter: “YMCA Sefton reviewed its financial position as part of the due diligence exercise during its transfer of ownership to YMCA Liverpool, as is normal in any such process.

“It was decided in that period that certain aspects of the organisation were not financially viable  in the long-term and should be ceased with immediate effect. Our statement published on the 3rd January 2017 in relation to our Health & Wellbeing Centre explained our decision in more detail.”

The senior management team in charge of running the YMCA centre made the shock announcement that staff would be made redundant and their gym and wellbeing centre would close at the start of January, citing rival competition as the reason why they could no longer afford to run it.

However, an investigation by the Champion has revealed that between March 2015 and March 2016 bosses still took home between them £88,818 in remuneration figures and an annual report submitted at the end of 2016 declared total net funds for the Sefton Trust as being over £1 million.

The reporter took these accounts to a fully qualified accountant who reviewed the figures, stating that all seemed in perfect working order for a healthy company.

As a result there are serious questions now being asked over how effectively the trust has been run in the nine months following to see them experience such a huge and damning change of fortunes.

Despite even a huge increase in expenditure, Sefton YMCA still declared that they would carry forward £1,070,808 into 2017 and confidently expected to operate as normal for the next three years.

The report directly states: “Despite the substantial unrestricted operating loss of £211,265 incurred during the year (2015-2016) these accounts have been prepared on the going concern basis as the sale of the investment properties has released sufficient cash resources to ensure normal continued operations over the next two to three years.”

In the report, published by Companies House, the board of trustees lamented a lack of funding saying that in the last year they had lost £104,000 in income and saw fewer people coming through the door of their Hoghton Street gym.

Yet they were clearly positive that they could still continue to run their operations for three more years.

So nine months later, why was there such a change of heart?

Town Centre councillor Tony Dawson said: “Under the Financial Review, it says ‘the charity had a loss of £250,000  versus a loss of £52,000 in the previous year.

“There is a fall in income of £104,000 – yet an increase in expenditure of £76,000!

“Where has the extra expenditure gone?

“I am dismayed to see this huge loss in a local charity after what I presume were many, many years of steady growth and careful control of services, costs and expenditure by the past trustees of the charity.

“Surely, the funds of Southport YMCA have been donated and looked after by the people of Southport for over 100 years?

“So the investment should remain in Southport. I am seeking assurances that the building will not be asset-stripped with hundreds of thousands of pounds of capital potentially disappearing over the horizon.”

In their original statement regarding the closure, a spokesperson for the YMCA Sefton Board of Trustees blamed the opening of rival gyms for its downfall.

They stated: “Unfortunately, as providers in the local fitness and leisure industry have grown around us, with cutting-edge facilities and cheaper prices – a considerable amount of our business has been lost and we can no longer afford to compete.

“We haven’t taken this decision lightly and have worked tirelessly over the last couple of years to improve our offer to you; but we now realise it is no longer viable to run our Health & Wellbeing Centre.

“As Trustees of YMCA Sefton, it is our duty to do the right thing to protect the charity’s long-term interests for the benefit of children and young people in the Borough of Sefton.

“As a result, we have made the very difficult decision that we can no longer afford to subsidise the running of our community health and wellbeing services.”

They promised to keep the nursery and early years provision open – however we understands that at the end of the upcoming ‘early years provision’ year, the service will also be scrapped.

 

Submit News Contact us with your community, business or sport news. Phone 07581350321

Email ots@otsnews.co.uk

Facebook https://www.facebook.com/Otsnews-Southport-1575528676012039/

Twitter  www.twitter.com/onthespot_news

Breaking local news as it happens, searchable archives with photographs, the ability to instantly comment on news articles – there are so many advantages to OTS (Onthespot) News.

If you want your news read locally online then send it to ots@otsnews.co.uk – relying only on the newspaper is to restrict yourself to an ever reducing audience.