I thank the Chair, Deputies and Senators for inviting the Federation of Irish Sport to appear before the committee.
We are pleased to have the opportunity to detail the immediate and future impact of Covid-19 on the sport and physical activity sector. For members who may not be familiar with the work of the federation, we are a representative body for 110 sporting organisations, comprising 81 national governing bodies and 29 local sports partnerships.
From day one, the sport sector has recognised the severity of the public health emergency and played its part supporting the Government and society in suppressing it at every turn. It has done so through immediate cessation of activity, promoting adherence to Government guidelines, providing facilities for Covid-19 testing and mobilising its volunteers to play their part in community outreach to the most vulnerable. At a time when being apart is so important, sports clubs and their hundreds of thousands of volunteers have ensured that no one is truly alone.
The impact of the pandemic on non-governmental bodies and clubs has been immense. The restrictions introduced in response to coronavirus have presented a significant challenge for us all. Sporting organisations and clubs generate revenue in many ways, but the sport sector is not sustainable without yearly memberships, event participants and supporters at games and events. The lack of activity in 2020 has resulted in significant financial difficulty. Many organisations have prudently introduced cost-cutting measures while utilising whatever financial reserves they may have, as well as accessing the Government supports available to them. The €70 million resilience fund announced by the Government in June was welcome respite and provided stability for our members to year end. Across the board, our member organisations have experienced losses of up to 70% of self-generated revenue. The GAA, FAI and IRFU will experience an estimated combined financial loss of €81 million in 2020. There has been a 60% reduction in footfall and income in commercial sports facilities, including gyms. More than 10% of swimming pools have closed permanently since March. Furthermore, the impact on events and mass activity has compounded matters for many organisations that rely heavily on such events, both financially and for competitive purposes. For example, it was meant to be a stellar year for Athletics Ireland, with it hosting the European Championships. Instead, it has suffered a loss of 50% for the second half of 2020 and is in the middle of a redundancy process for 15% of its staff, with a further 40% on short time since May.
The onset of winter brings many additional challenges for the indoor sporting sector. Sporting activity has been significantly curtailed under the approved guidelines. Many clubs cannot access facilities to restart the club as they do not own the facility. Where indoor sport has restarted, clubs are facing higher overheads to cover PPE and cleaning, etc. The impact of restrictions and capacity limits has reduced the ability to generate income, with group exercise classes and swimming lessons not permitted under level 3 restrictions.
Although the immediate impact to date has been immense, the federation and its members have significant concerns about the long-term impact into 2021 and beyond. We expect our members to encounter issues including retention of members into 2021, retention of volunteers to support the running of activities, continuing financial losses because of the uncertainty around mass participation events, long-term viability of people and programmes if financial losses persist and the stagnation of emerging talent on high-performance pathways, which will have a long-term impact on preparations for the Olympics in Paris in 2024 and Los Angeles in 2028.
Unlike other economically beneficial sectors, the sport and physical activity sector cannot always ensure social distancing of participants. For that reason, we believe the sector is at a distinct disadvantage in the context of current and future public health advice and, as such, should continue to be financially supported in the absence of full competition events and mass activity. The business model of sport has changed due to Covid-19. Organisations need time and resources to adjust and develop a new model. They will do so. The loss of revenue streams as previously outlined means the sector needs Government support to the end of the pandemic or it will struggle to reboot in time. Following the launch of the national sports policy in 2018, there have been two years of established funding, which has been welcomed by all involved. However, budget 2021 is a watershed moment for sport in Ireland and the Government's commitment to the national sports policy. It is essential for the ultimate success of the national sports policy that budget 2021 takes the third step on the road to fulfilling the promise of doubling funding through the next ten years. We are acutely aware of all the factions of society that currently face immense challenges. Grassroots sport and physical activity wish to be part of the solution, not just in terms of improved physical well-being and reducing the burden on the health system, but in terms of their positive impact on mental well-being, as well as helping to overcome societal challenges such as loneliness, crime and isolation. Furthermore, sport has the power to contribute substantially to the recovery of the economy. As a sector, it currently yields €195 return for every €100 invested in it by the Government and employs some 39,500 people. It accounts for €2.7 billion in annual consumer spending.
I thank the Government and the committee for their support to date. The recognition of the challenges our members face has been a positive step on the road to ensuring their recovery. I thank the members of the committee for their time and welcome any questions they may have.