COUNCIL funding for a proposed leisure trust should be ring-fenced amid concerns it could become unsustainable if it is cut annually, councillors have warned.

A team of three councillors have concluded their review into proposals to farm off Newport council-run leisure services after they were given more time to complete their work.

They have reaffirmed their view that their preferred option is a new trust, rather than handing services over to an existing one or a private operator.

But that recommendation comes with several caveats, with concerns also raised over choosing a model based upon tax savings.

The policy review group of the learning, caring and leisure scrutiny committee is to report back to the rest of the committee on Wednesday.

A Newport council report says the group “reaffirms that the preferred option for the new service delivery model should be that of the formation of a new trust.”

“It is consider that this option best matched the council’s desire to achieve the objectives and key values the council would wish for the service,” the report reads, adding that the plan would allow for 20 per cent council membership on the new board of trustees and deliver needed savings of £412,000 from savings in business rates.

“Further work will need to be done to confirm the financial sustainability of the organisation before any local trust is setup,” the report says.

“Members raised concerns that this model would only work if funding from Newport council was ring-fenced, for example for a minimum of six years, within a five per cent range either way.

“If funding was cut year on year without warning, this could pose a risk to the sustainability and/or success of a trust.”

Members raised concerns about “the implications of choosing a model that was based upon tax savings”, amid worries savings could be lost if the exemption ended.

Currently, such a trust should be allowed 80 per cent off business rates.

Newport council is hoping to save £412,000 on leisure services by 2017 through a new delivery model as part of its proposals for savings for the next four years.