Active Northumberland, a charity that provides leisure, libraries and cultural services in Northumberland, has been given a £1m grant by its local county council to offset an expected deficit.
The charity was registered with the Charity Commission in 2013 and took over the running of leisure services in Northumberland in October 2014. It had an income of £10.8m and an expenditure of £10m in the year to the end of March 2015, accounts filed with the regulator show.
Northumberland County Council said that, since the appointment of a new board for the charity in October, a number of problems had been identified with its governance and a potential £1m overspend for the current financial year.
David Hall, chair of Active Northumberland, wrote to the council on 31 January to ask for a £1m grant for the current financial year.
The council’s response said it would provide additional funding so long as the charity could show it had a credible business plan that would deliver specific financial targets, including savings of £2m in next financial year and a further £1.5m the following year.
Hall said: "Since I joined the board it has become very clear we have inherited a number of issues that need to be resolved. The senior management team is working hard to resolve these issues, including working on the business strategy and its budget. The new Active Northumberland board will be reviewing these shortly, but in the meantime we have asked the council for support of up to £1m to assist us this year.
"There is no doubt the organisation will undergo a number of changes as a result of its new business strategy and budget issues, but I firmly believe that these can be addressed to ensure the future success of the charity."
Grant Davey, leader of Northumberland County Council, said: "We are aware of the situation with regards to Active Northumberland and have agreed to provide financial support to safeguard the future of the charity. We will look at all the options available and want to ensure that there is a credible recovery strategy and programme in place to put the organisation firmly back on its own two feet.
"However, I would urge residents to use their services, especially the leisure centres and facilities. They are a vital part of their local communities, but the significant budget cuts imposed on us by central government put such services under threat – they must be financially viable. The more residents who use them, the more likely they are to be protected in the future."