Memorandum submitted by the Fitness Industry Association (FIA) (BRS 06)

 

1.1 The FIA is the non-profit making trade association for the UK health and fitness industry and represents over 2,400 leisure centres and health and fitness clubs, including a majority of health club operators in London. Membership includes the full spectrum of the industry from multi-site to single-site facilities in both the public and private sectors. Its key aim is to improve the health and well-being of the UK population.

 

1.2 The FIA has developed a number of community programmes aimed at helping people of all ages to get fitter, allowing them to experience the cumulative social and emotional advantages that accompany improved health and physical fitness. In recent years we have also become a strong public health delivery partner for government at all levels, which has funded our programmes and capitalised on our organisational capacity to deliver results.

 

1.3 We are grateful for the opportunity to provide written evidence to the Business Rate Supplements Bill Committee in order to highlight the key issues of importance to the fitness sector, and the health and fitness of the nation, contained in this Bill.

 

Summary of the FIA position

 

2.1 With the UK currently experiencing record obesity rates and a deepening recession, the FIA cannot support a proposal to grant top-tier local authorities the power to levy Business Rate Supplements (BRS) without an exemption for organisations that facilitate opportunities to be physically active (i.e. sports clubs, health clubs and leisure centres). The FIA is concerned that failure to include such an exemption could jeopardise current health campaigns and undermine the Government's stated public health objectives in the lead up to the 2012 Olympic Games and the promised health legacy thereafter. The FIA believes that other partners in the physical activity sector, such as those that represent sports clubs, would support such an amendment.

 

2.2 BRS, coupled with the expected rise in the Uniform Business Rate (UBR), has the potential to inflict a significant and negative impact on public and private health and fitness facilities and to impede Government and community efforts to bring about a healthier, more active population.

 

2.3 The FIA believes that a BRS has the potential to significantly raise the operating costs of health and fitness providers without generating the comparable benefits used to justify the implementation of a BRS. The cost-benefit analysis, both in terms of bottom lines of fitness providers and the health objectives of the Government's physical activity PSA targets, would not suggest a sufficient return on investment to justify imposing a BRS on the health and fitness sector.

 

 

Effect on Government Public Health Objectives

 

3.1 According to Government figures, the UK is currently experiencing an alarming increase in national obesity rates. The Government's Foresight Report, released in October 2007, indicates that if current social trends and lifestyle habits remain unchanged the UK will experience a virtual 'obesity bomb' in which 60% of adult men, 50% of adult woman and 25% of all children will be, not simply overweight, but obese by 2050. This is clearly an unacceptable outcome and it is one that governments, communities and families have a generational duty to reverse.

 

3.2 The Government has set various cross-departmental PSA targets aimed at increasing adult and child participation rates in sport and physical activity, as well as targets to halt, and eventually reverse, rising obesity rates. These include:

§ Department of Health (DH) commitments to:

- 'Promote better health and well-being for all'

- 'Reduce the proportion of overweight and obese children to 2000 levels by 2020 in the context of tackling obesity across the population. Over the 2007-2011 CSR period the Government aims to reduce the rate of increase in obesity in children under 11 years old and will monitor progress in the context of the long term target. The national target will be assessed when obesity data becomes available in December each year. (joint target with DCMS and DCSF)'

§ Department of Culture Media and Sport (DCMS) targets:

- National Indicator 8: to increase 'the percentage of the adult population in a local area who participate in sport and active recreation, at moderate intensity, for at least 30 minutes on at least 12 days out of the last 4 weeks (equivalent to 30 minutes on 3 or more days a week).'

- 'Increase the take-up of cultural and sporting opportunities by 16 and above from priority groups by 2008'

 

§ A Department of Children Schools and Families (DCSF) target to:

- 'Increase participation of children and young people in positive activities.'

§ A Department of Work and Pensions (DWP) commitment to:

- 'Ensure that people in employment are healthier and that fewer people fall out of work onto benefits, with resultant poorer health outcomes.'

 

3.3 To achieve these and other worthy public health objectives, the Department of Health has recently kicked-off its £75 million Change4Life campaign, (of which the FIA is a committed delivery partner), to encourage people in England to 'eat better and move more.'

 

3.4 The FIA is concerned that by allowing a mechanism whereby top-tier local authorities can levy a BRS on public and private sport and fitness facilities, which have the infrastructure and expert capacity needed to increase participation rates, the Government risks jeopardising the success of Change4Life and inadvertently undermines the achievability of its stated public health objectives.

 

3.5 In the interest of avoiding a situation whereby the needs of local authorities are pitted against national goals for reducing obesity and improving public health, the FIA strongly recommends amending the BRS bill to include an exemption for organisations (i.e. sports clubs, health clubs and leisure centres) that facilitate opportunities to be physically active, and in many cases carry-out government funded programmes to change habits and attitudes with regards to diet and exercise.

 

The Economy and the Health and Fitness Sector

 

4.1 Current national and global statistics indicate that the UK is experiencing a deepening, multi-sector recession with no immediate end in sight. Our members - public and private, big and small - are not immune to the potential affects of this situation. In the context of the current economic climate, the FIA and its members are acutely concerned about the additional financial burdens a BRS would place on this already vulnerable sector.

 

4.2 Because of the way business rates are calculated, and the large and expensive spaces fitness facilities require, the fitness sector is likely to see a disproportionately high rate increase when compared to the potential economic benefits that are supposed to justify the levying of a BRS in the first place. For example, if a 2p BRS were implemented in London, a typical single or multi-site private facility would pay anywhere between an estimated £1000-£13,000 more in business rates per club per year, depending on its location and size. That, on top of an expected 2p UBS rate increase, would be a cost that would have to be passed on to existing fitness centre users at a time when clubs/leisure centres are already trying to increase participation levels amongst hard to reach communities. Given these rate increases, it is hard to see what local authority project could generate a sufficient return on investment to off-set the imposition of a BRS on fitness facilities.

 

January 2009