Paying living wage affected park cafe 'viability'
LDRSA council has suggested its policy of paying staff at least the Real Living Wage was a "major factor" for why it could not keep running two park cafes.
In January, Newcastle City Council said it was shutting its outlets at Paddy Freeman's Park and Exhibition Park due to falling demand and increasing running costs.
The city council took over the cafes in March when it regained control of the parks from charity Urban Green.
The Labour-led authority has suggested in a report this transfer meant it was paying staff the Real Living Wage - currently £13.45 an hour outside London - as well as increased rates for weekend work, which played a major role in the "ongoing viability" of the two sites.
After suddenly shutting the cafes, the council said a week later it was actively looking for local businesses to bring the sites back into use.
A spokesperson said there was a strong private hospitality market in the city which would be "better positioned" to run these cafes "sustainably".
'Reopening date unclear'
The report said: "A major factor in the ongoing viability of the cafes is the significantly increased costs since the cafes transferred to the council including the living wage, weekend enhancements and business rates."
The local authority has been an accredited Real Living Wage employer since 2022.
The document said the council's projections suggested that keeping the venues open would cost taxpayers more than £200,000 a year, and they were "highly unlikely to become financially sustainable" for it to operate.
It meant closing the cafes was required for "urgent economic" reasons.
A spokesperson said the council could not have solely kept its cafe at Paddy Freeman's open, despite it losing less money than the Exhibition Park site, because the two cafes shared staff and were run by the same management structure.
They said operating the Paddy Freeman's cafe by itself would have led to "greater operating costs".
The spokesperson also said informal viewings from potential operators for the two sites had already begun.
"While it is not yet possible to confirm a timescale for appointing a new operator, we aim to do so as soon as possible," they said.
