The Charity Commission has opened a regulatory compliance case to investigate concerns about the governance and financial management of a now-defunct leisure charity.

The regulator is looking into Active Nation, which runs leisure facilities for councils, after it ceased operations last week.

In a letter sent to service users, the charity cited its “ongoing utility crisis and the challenges it has created” as a reason for entering administration and having closed the Yarborough and Birchwood leisure centres in Lincoln as a result.

A Charity Commission spokesperson said: “We can confirm that we have opened a case to assess concerns about the governance and financial management of Active Nation Limited. 

“We will be engaging with the charity’s trustees on this matter.”

Active Nation recorded an income of £14.4m according to its latest accounts, for the year to the end of March 2023, and expenditure of £15.4m in the same period.

The charity had 266 employees, according to its accounts.

“After discussions with the City of Lincoln Council, we regret to inform you that no alternative providers have been identified for transferring services, which means the centres will remain closed for the foreseeable future,” the charity’s letter said.

Simon Walters, directorate for communities and environment at City of Lincoln Council, said the closures will cause considerable concern to service users and staff.

“We know that staff have worked incredibly hard to try to keep facilities running during some very tough trading conditions in the leisure industry,” Walters said.

“We’d like to express our sympathies to everyone who will be in any way affected by Active Nation’s announcement.”

Southampton Council has transferred the staff, membership and bookings of 15 facilities formerly run by Active Nation to Places Leisure, which operates as part of the social enterprise Places for People.

Lorna Fielker, councillor and leader of Southampton Council, said: “Due to the contract that we have in place, we anticipate residents and members will still be able to access our leisure facilities across the city.

“I appreciate that this will be a difficult time for staff and have been assured that they will be offered appropriate support during this transition period.

“I would like to thank them for their continued dedication and support to our residents.”