A Kenilworth councillor has questioned the decision not to audit a £600,000 reduction in a bill due from the company that manages the council's sports centres.

In July 2021 Warwick District Council's cabinet agreed to waive the £1.25 million concession fee due from Everyone Active for the 2021/22 financial year.

Instead, the council agreed to enter an open book arrangement with the company because "we were in the middle of the Covid pandemic and the leisure centres had been closed for large sections of the period".

WDC - which also approved a £189,000 grant for Everyone Active at the same time - said its decision was in line with guidance from the Local Government Association.

But now the council's accounts for the 2021/22 financial year are being audited, Cllr Richard Dickson questioned why the arrangement was not being put under further scrutiny by the council's auditor Grant Thornton.

Speaking at the February full council meeting Cllr Dickson asked: "Whether they [Grant Thornton] had audited the open book arrangements that existed between the council and Everyone Active in the financial year ended March 2022?"

Deputy leader Cllr Richard Hales replied: "No. This is not a specific area of material risk from our point of view, so it would only be considered [by the auditors] if it was sampled."

The district council also told Nub News the deficit from the year would not be recouped and that Everyone Active would also pay a lesser fee for the 2022/23 financial year.

Speaking to Nub News following the meeting, Cllr Dickson added: "The open book arrangement reflected the exceptional times as we emerged from lockdown. 

"This situation had not been foreseen when the income-sharing arrangement was first agreed. 

"However, full transparency and trust were essential to justify the reduction of more than 50 per cent against the planned figure."

He added: "Compared to the total income of the council, a difference of £640,000 in income received from Everyone Active against the original plan was deemed immaterial in audit terms. 

"I can understand that residents may think the difference to be significant and they would have been reassured if the arrangement had been audited.

"My concerns in asking questions have been about the process and good governance as much as about the sums involved."

Meanwhile the accounts for Sports and Leisure Management Ltd - the company behind Everyone Active - show that in the financial year ending March 2022, some £11,876,741 was sat in a pot earmarked for profit and loss reserves.

The company runs over 200 leisure centres nationwide including St Nicholas Park Leisure Centre in Warwick and the sports centres in Kenilworth.

(Image by Stuart Shepherd via geograph.org.uk)