An East Lancashire local authority has agreed to release a £490,000 subsidy to its borough leisure trust after a warning that the organisation could go bust without the grant.

Conservative-run Hyndburn Council's cabinet last month agreed to provide the cash to Hyndburn Leisure Trust to cover soaring energy costs, the impact of Covid-19 on revenues and a higher than anticipated pay settlement.

But Labour councillor Scott Brerton 'called in' the decision for review by a special meeting of the authority's Resources Overview and Scrutiny Committee on Tuesday before any payment was made.

After the council's deputy leader Cllr Peter Britcliffe and the trust's chief executive Lyndsey Sims explained the reasons for the grant for 2023/24, the councillors unanimously voted to release it.

The committee heard that the cash will come from the authority's budget underspend of £998,000 for the current year

The councillors also accepted they may need to give a further grant for 2024/25 to support the trust which offers fitness classes, swimming pools and gyms to residents and owns prominent buildings like Hyndburn Leisure Centre and Mercer Hall in Great Harwood.

And they confirmed the commissioning of a report on the 'most advantageous delivery model for the provision of quality leisure services in Hyndburn, with regard to achieving value for money'.

The grant decision follows a letter to the council from Ms Sims seeking grant support of up to £700,000 to cover 'the pandemic, energy crisis, cost of living crisis and major maintenance issues at Mercer Hall'.

Cllr Brerton's 'call in' request said: "Given the dire state of local government finance across the country, we believe that the decision to let over £400,000 leave the council funding in the current cost of living crisis is a high-risk decision that places significant financial burden on the Hyndburn financial coffers."

He told the meeting on Tuesday: "We are not challenging the decision we just want to scrutinise it.

"The request was a real shock.

"I think questions need to be asked as to how the trust got into this position in the first place."

Ms Sims told Cllr Brerton that the failure of a bid for £370,000 from the government's Swimming Pool Support Fund had contributed to the problems.

Co-opted committee member Richard Downie asked Cllr Britcliffe whether the trust could 'go bust' if the subsidy was not approved.

He replied: "I think approve this grant." there is a danger that the leisure trust could go into liquidation if we don't

After the meeting Cllr Britcliffe said: "This is an excellent decision which means that the leisure trust will continue to operate."

Committee chairman and Green group leader Cllr Paddy Short said: "This is what scrutiny is all about."