Vivacity terminates contract with Peterborough council, citing £8m COVID-19 loss

Leisure trust Vivacity, which terminated its contract with Peterborough City Council council last week, has confirmed it's lost £8m as a result of the COVID-19 pandemic.

Vivacity manages eight leisure centres with gyms, 10 libraries, a theatre and a museum – all owned by the council.

The trust was launched in 2010 and a recent independent study calculated that it contributes £60m of social value to the city every year.

A 90-day transition period has now been triggered, during which Vivacity will work with the council to transfer back the services. The council is expected to make a decision later this year on future delivery models.

The decision to terminate the contract was also partly due to Vivacity anticipating a "slow return to previous volumes of gym usage" within its centres.

"Gym usage drives the bulk of the income to support our range of services," Vivacity said in a statement.

"The leisure/fitness sector is widely predicting customer volume and revenue will be down by as much as 50 per cent, with recovery taking up to 18 months from the lifting of lockdown restrictions."

Stewart Francis, chair of Vivacity trustees, added: “This has been an extremely difficult and painful decision to make. We are devastated.

“Vivacity has been caught in a perfect financial storm. COVID-19 has switched off our revenues for 13 weeks already.

"There would be significant costs of re-opening and we are predicting a major loss of income as we implement social distancing and reduced capacities.

"This immediate shock comes alongside the well-publicised budget pressures of the council that have resulted in continued reductions in its contributions to Vivacity.

“Regrettably, given this combination of financial pressures, the Trustees cannot see a viable future that allows Vivacity to continue to deliver its charitable objectives to promote health and wellbeing and arts and culture in the city.

"We have concluded that the only option for Peterborough and for the charity’s employees is to give the notice to terminate the contract with the Council as of 18 June 2020.

“We will now work closely with the Council to support our employees as far as possible."

The decision comes just as the industry is about to hear news of a reopening date and a possible reduction on social distancing measures from 2m to 1m. The news is likely to come a week too late for Vivacity.