MANAGEMENT of both the Scarborough Spa and Whitby Pavilion could be placed into the hands of an outside operator in an effort to plug a budget deficit.
The move will be discussed at Tuesday’s meeting of Scarborough Council’s Audit Committee at the Town Hall tomorrow.
Senior councillors also hope that the £500,000 budget deficit at the Spa Complex, following its £6.5 million pound refurbishment, will be met by an anticipated increase in conference bookings.
In a report by Brian Bennett, the council’s head of tourism, he said: “The market testing of the management and development of the Spa and Pavilion is progressing. The Council has received and assessed the outline proposals from the bidders and will now be entering into further dialogue prior to inviting detailed bids.
“It is planned that the outcome will be reported to members in December 2011 with a recommendation on how to proceed. It is anticipated that if the Council does outsource the service it can be achieved prior to the start of the next financial year.
“Either way it is expected that the solution for the former Long Bar area will be resolved and at the very latest it will be operational before the start of the next summer season.”
Mr Bennett faced some tough questions from members of the Cabinet amid claims that the Spa was losing money and holding back the more profitable Whitby Pavilion.
The Grade II listed Spa Complex recently underwent the refurbishment scheme and a delay in the official reopening was blamed for a loss in revenue.
Cllr David Jeffels, the portfolio holder for tourism, said it was a challenging report but he was hopeful that the improvements made to the venue would help it to generate more income.
He added: “We are seeing an increase in bookings already in conferences –they tend to book two or three years ahead so we won’t see the benefits for some time.”
It is understood that several organisations – including the National Union of Teachers and the Union of Construction, Allied Trades and Technicians – are considering future bookings at the Spa.
Cllr Penny Marsden said that if the two venues were separated it would be easier to identify unprofitable areas in the businesses. She added: “It would bring a much clearer picture to us as to where the money had gone. It doesn’t really tell us which Spa has been successful.”
And Cllr Jane Kenyon said that funding for the loss would have to come from other public areas and it was not fair for them to lose out. She said: “The Whitby Pavilion is doing very well. The staff are working very hard and for the first time in many years I am getting compliments about it. But it’s getting dragged down by the Spa. There are a lot of excuses and unanswered questions.”
Mr Bennett said that there was no intention to bring detailed budgets to the Cabinet and the matter would be looked at in more detail at next week’s meeting of the Audit Committee.
He added that the anticipated £500,000 shortfall was due to a combination one-off costs and the current economic down turn. He said: “In reality we were five months behind where we thought we should be and most of the savings are after the completion of the work.”
The Spa re-opened in May with a performance by the Bolshoi Symphony Orchestra but the refurbishment was thrown into turmoil after Yorkshire Forward had its funding drastically reduced.
In a controversial move the council staked its entire capital reserve to keep the project on schedule and in January the authority managed to claw back the £800,000 cut from the budget.
Tomorrow’s meeting is due to begin at 2pm.