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UNITING THE WORLD OF FITNESS
Health Club Management

Health Club Management

features

ukactive update: Budget Cuts

David Stalker, CEO of ukactive, reports on how the latest round of spending cuts will impact the physical activity sector

By David Stalker, ukactive | Published in Health Club Management 2013 issue 8

With the UK economy recovering slower than originally expected, Chancellor of the Exchequer George Osborne announced another set of budgetary changes in the 2013 Spending Review of 26 June. In it, he set the target of a further £11.5bn of savings from current spending, laying out spending plans across 17 government departments during the financial year 2015–2016, with details of the direct impact this latest round of cuts will have on public services.

In total, government expenditure for 2015–16 is expected to be £745bn – a bid to meet the government’s commitment to pay off Britain’s budget deficit within five years. Some departments may have fared better than others, such as the NHS and overseas aid, but the majority received average cuts of between 8 and 10 per cent.

DCMS & local government
The impact on the physical activity sector will be a mixed one. The department of Culture, Media and Sport (DCMS) has had its resource budget cut by 7 per cent, with community sport in particular receiving a 5 per cent cut. In comparison to the cuts other departments are expected to make, those of DCMS are quite limited, but it will still result in the direct loss of several million pounds from Sport England’s core budget. However, since the organisation mainly funds its projects through National Lottery funds, the proceeds of which continue to be healthy, the decrease in budget will have a limited impact on its activity.  

More significantly, the cut in local authorities’ budgets will have an indirect but deeper effect on local services such as leisure. The Department for Communities and Local Government took one of the biggest hits in this year’s Spending Review. Local government has to make a 10 per cent cut – a huge decrease. As a result, all local budgets across the country will be tighter, which in turn will restrict local investment and put at risk the development and maintenance of local facilities and sport programmes. It will also force tough decisions regarding the mix of facilities provided by local authorities, and the approach taken to their management.

Positive news
However, there are other reforms taking place in parliament that will benefit the physical activity sector in the long term, the most significant of which are education measures targeting the employability of young people. The government recently announced a series of actions aimed at developing further apprenticeship and traineeship programmes.

Traineeships, which currently target young people aged 16–19 years, will be extended to 19- to 24-year-olds to help the transition from education into work. In addition, the Department of Business, Innovation and Skills will run a consultation this summer to review apprenticeship funding, which aims to place purchasing power directly in the hands of employers as suggested in the Richard Review, which was published back in November 2012. The consultation will consider the possibility of making payments to employers.

These announcements are good news for employers in the fitness sector, as it will help upgrade and diversify the workforce by making possible the development of new training and qualification opportunities for young people entering the activity sector.

Olympic legacy
Finally, the budget for elite Olympic and Paralympic sport has been ring-fenced, ensuring £355m of investment in the organisation UK Sport over the four years up to 2016. The government will also invest, again through UK Sport, over £70m of Exchequer and Lottery funding in Paralympic sports, to promote equality and social mobility in the run-up to Rio 2016. These steps may not have a direct impact on our sector, but it demonstrates willingness on behalf of the government to pursue the Olympic legacy, the baseline of which was to get more people active.

Opportunities remain
Public funding for sport may have been cut nationally and locally, and this may not be the final word in the government’s plan to reduce the deficit. However, investment in the NHS, the training of young people and commitment to an Olympic legacy does mean that there are still plenty of opportunities for the health, fitness and physical activity sector to have a positive impact on public health.

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https://www.leisureopportunities.co.uk/images/HCM2013_8UKactive.gif
ukactive CEO David Stalker reports on how the latest round of spending cuts are likely to affect the physical activity sector
David Stalker, CEO of ukactive,,David Stalker, CEO of ukactive,
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features

ukactive update: Budget Cuts

David Stalker, CEO of ukactive, reports on how the latest round of spending cuts will impact the physical activity sector

By David Stalker, ukactive | Published in Health Club Management 2013 issue 8

With the UK economy recovering slower than originally expected, Chancellor of the Exchequer George Osborne announced another set of budgetary changes in the 2013 Spending Review of 26 June. In it, he set the target of a further £11.5bn of savings from current spending, laying out spending plans across 17 government departments during the financial year 2015–2016, with details of the direct impact this latest round of cuts will have on public services.

In total, government expenditure for 2015–16 is expected to be £745bn – a bid to meet the government’s commitment to pay off Britain’s budget deficit within five years. Some departments may have fared better than others, such as the NHS and overseas aid, but the majority received average cuts of between 8 and 10 per cent.

DCMS & local government
The impact on the physical activity sector will be a mixed one. The department of Culture, Media and Sport (DCMS) has had its resource budget cut by 7 per cent, with community sport in particular receiving a 5 per cent cut. In comparison to the cuts other departments are expected to make, those of DCMS are quite limited, but it will still result in the direct loss of several million pounds from Sport England’s core budget. However, since the organisation mainly funds its projects through National Lottery funds, the proceeds of which continue to be healthy, the decrease in budget will have a limited impact on its activity.  

More significantly, the cut in local authorities’ budgets will have an indirect but deeper effect on local services such as leisure. The Department for Communities and Local Government took one of the biggest hits in this year’s Spending Review. Local government has to make a 10 per cent cut – a huge decrease. As a result, all local budgets across the country will be tighter, which in turn will restrict local investment and put at risk the development and maintenance of local facilities and sport programmes. It will also force tough decisions regarding the mix of facilities provided by local authorities, and the approach taken to their management.

Positive news
However, there are other reforms taking place in parliament that will benefit the physical activity sector in the long term, the most significant of which are education measures targeting the employability of young people. The government recently announced a series of actions aimed at developing further apprenticeship and traineeship programmes.

Traineeships, which currently target young people aged 16–19 years, will be extended to 19- to 24-year-olds to help the transition from education into work. In addition, the Department of Business, Innovation and Skills will run a consultation this summer to review apprenticeship funding, which aims to place purchasing power directly in the hands of employers as suggested in the Richard Review, which was published back in November 2012. The consultation will consider the possibility of making payments to employers.

These announcements are good news for employers in the fitness sector, as it will help upgrade and diversify the workforce by making possible the development of new training and qualification opportunities for young people entering the activity sector.

Olympic legacy
Finally, the budget for elite Olympic and Paralympic sport has been ring-fenced, ensuring £355m of investment in the organisation UK Sport over the four years up to 2016. The government will also invest, again through UK Sport, over £70m of Exchequer and Lottery funding in Paralympic sports, to promote equality and social mobility in the run-up to Rio 2016. These steps may not have a direct impact on our sector, but it demonstrates willingness on behalf of the government to pursue the Olympic legacy, the baseline of which was to get more people active.

Opportunities remain
Public funding for sport may have been cut nationally and locally, and this may not be the final word in the government’s plan to reduce the deficit. However, investment in the NHS, the training of young people and commitment to an Olympic legacy does mean that there are still plenty of opportunities for the health, fitness and physical activity sector to have a positive impact on public health.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
https://www.leisureopportunities.co.uk/images/HCM2013_8UKactive.gif
ukactive CEO David Stalker reports on how the latest round of spending cuts are likely to affect the physical activity sector
David Stalker, CEO of ukactive,,David Stalker, CEO of ukactive,
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Featured supplier news: Fitness industry to gather at Sibec Europe-UK in Portugal this September
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Featured operator news: Everyone Active to launch new exercise classes to reduce gender gap
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