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PureGym plans to make the US its second-biggest market, with more than 300 sites by 2030, as it pursues a $105mn deal to buy dozens of outlets from collapsed chain Blink Fitness.

The UK’s largest gym operator last month offered to buy “a substantial portion” of Blink’s estate, which consists of 67 locations in New York and New Jersey, after it was put into Chapter 11 by owner, gym group Equinox, in August.

A final deal is subject to court approval, with PureGym having been given “stalking horse” status, putting it in pole position ahead of an auction for the assets that will take place on October 28.

“[The deal] will give us . . . great credibility in the market for further expansion of either our owned and operated sites . . . or that we can build around that stronger franchising relationships,” outgoing chief executive Humphrey Cobbold told the Financial Times. He will become chair next month with Punch Pubs boss Clive Chesser taking over as CEO.

“The US is the largest fitness market in the world, and if we can build a position and a growth runway in the US, it potentially transforms the scale of the group as a whole,” said Cobbold.

PureGym, which specialises in low-cost memberships, operates three sites in the US under the Pure Fitness brand, all near Washington DC. Cobbold said acquiring nearly 60 sites from Blink with their 350,000 memberships and rebranding them under the PureGym banner would help it find franchise partners more easily and scale up.

“It is a capital-intensive business . . . it would take us at least five and probably nearer 10 years to open as many sites,” he said. “If we have in the range of 300 plus sites in North America by 2030 that would be transformative for the business.

“The UK will be at 600 or 700 sites by then,” he predicted, compared with nearly 390 today.

Cobbold’s global expansion ambition comes as the group searches for the next source of growth following its rapid rollout in the UK thanks to its affordability — monthly options start from £13.99 at one of its Manchester gyms — and rising demand for “wellness” services, especially after the pandemic.

The UK’s budget gym segment — dominated by PureGym and its rival The Gym Group — has more than doubled its share of the private gym market by revenues over the past decade to reach 19 per cent, according to a PwC report published in March.

PureGym, owned by US private equity firms Leonard Green & Partners and KKR, has more than 600 gyms across six countries including Denmark and Switzerland, but more than 60 per cent are in the UK. It opened 20 new sites in the first six months of 2024 with a further 20 to 25 expected for the rest of the year.

The company, which has nearly 2mn members globally, increased revenues by 11 per cent to £300mn in the first six months of 2024. However, it posted a pre-tax loss of £30.5mn as finance costs rose.

PureGym’s offer for Blink consists of $105mn cash as well as the assumption of certain liabilities, such as customer creditors and certain employee-related costs.

In court filings, Blink said it had assets and liabilities of between $100mn and $500mn and around $280mn in debt. PureGym, meanwhile, said in September that it had secured commitments from an investor that will give the low-cost gym operator more than £450mn in available funds.

Good morning. We write a lot about the economic and geopolitical consequences of Brexit. But public policy ones are neglected — the consequences of a prolonged period from 2016 to 2020 when the government didn’t concentrate all that much on domestic public policy, before being hit by a global pandemic which, necessarily, took up much of the government’s focus.

One particular example of that is the crisis in special needs education in England, the subject of an excellent piece by Amy Borrett and Peter Foster which you can read here. Some further thoughts from me about the political causes of the problem and how that will shape much of the new government’s choices, not just in special needs education.

Where next for Send?

Here are two things that sound like they ought to be more closely related, but aren’t: since the 1990s, diagnoses of autism in the UK have increased by more than 787 per cent, a trend that is prevalent across much of the rich world, while since 2015, the number of autistic pupils in England with a formal Education, Health and Care Plan (EHCP) has more than doubled.

There’s a live debate about what is driving increased diagnoses of autism and other special needs — environmental, social, changes in diagnostic criteria — and I am going to go for the wet centrist answer of “it’s probably all of the above”. There are many contributing factors: our changing economy means that more people with various disabilities will need and receive diagnoses, the fact that in 2009 less than half of all local authorities had adult diagnostic centres and now essentially all of them do, environmental and social factors such as having children later, plus changing diagnostic criteria.

But the vast, vast majority of these diagnoses do not end with a child getting an EHCP. The big change is the passage of the 2014 Children and Families Act, which made almost all additional special needs funding conditional upon receiving a formal EHCP and deprioritised trying to educate as many children with disabilities in mainstream education in favour of special schools. (There is much more on this, plus an excellent dissection of Kemi Badenoch’s recent intervention on the issue over on Sam Freedman’s Substack.)

Obviously, when you make accessing funding conditional on passing a formal hurdle, you are going to increase the number of formal applications. And one problem is that meeting the cost of EHCPs has proved to be more expensive than the previous system, and it has not resulted in better outcomes for children with disabilities.

Now, it’s important to note here that the 2014 act had a lot going for it. To take an issue that is dear to my heart, it repealed the requirement of the Adoption and Children Act 2002 to give “due consideration” to race, religion and ethnicity in adoption. Of course, many people never consider adoption and many of those considering it are unable to do so. If you further restrict and discourage adoption on racial, religious or ethnic lines, you are going to, as the pre-2014 system did, end up with larger number of ethnic minority people waiting longer and longer to find their families.

There’s also an argument, albeit one that I am less sympathetic to than Sam is in his Substack, that the 2014 changes helped to usefully raise standards in mainstream education. I am dubious about this, but you know, I could easily be wrong! We can’t test the hypothetical here.

Now what should have happened in around 2018, and in the universe where the In-Out referendum had gone the other way, I suspect, was for the education secretary or the chancellor to clock that this aspect of the 2014 act was having a perverse impact and for a policy fix to be brought forward. This is what normally happens: to take an example in a very different area of public policy, successive governments have tweaked immigration legislation, usually with the same aim in mind as the previous government, whenever it has produced results it hasn’t wanted, or failed to produce the desired outcomes.

In some ways, from the perspective of the Labour government, this is a policy area where it has a real opportunity to get better outcomes for less money. It’s not like, say, healthcare, where there are global trends forcing healthcare spending upwards and thanks to the UK’s model of provision, an awful lot of the revenue raising responsibility falls on the state.

But it is a politically fraught topic and one with the potential for lots to go wrong.

Now try this

This week, I mostly listened to the soundtrack of the excellent new musical London Tide while writing my column.

Top stories today

• Unhappy reading | Labour’s package of workplace reforms will cost UK businesses up to £5bn a year as companies get to grips with the new rules, the government said in an analysis of its employment rights bill. 

• Public sector net debt at highest levels since 1960s | UK public sector borrowing increased in September and was higher than official forecasts, underlining the scale of the challenges facing Rachel Reeves as she prepares to raise taxes in next week’s Budget.

• Hunt ‘rejected’ employer NICS rise | George Parker got Jeremy Hunt’s verdict on Reeves’s decision to increase national insurance contributions for employers. “From a government point of view this is a politically painless tax rise, but from an economic point of view it’s an absolute disaster,” the shadow chancellor said.

• Unite hotel under SFO probe | The UK Serious Fraud Office is investigating a hotel and conference centre in Birmingham built by Britain’s second largest trade union that has been valued at tens of millions of pounds below its construction cost. 

• Cleared of murder | The Metropolitan police officer charged with shooting unarmed Chris Kaba, 24, dead in South London two years ago has been acquitted of murder. 

Inheritance tax (IHT) receipts for April to September 2024 were £4.3bn, up by £0.4bn compared to the same period last year.

The figures, released ahead of the upcoming Budget by HM Revenue and Customs (HMRC), show a trend of rising IHT revenues.

The £325,000 nil-rate band (NRB) threshold for IHT has remained unchanged since 2009, while the residential nil-rate band threshold, introduced between 2017 and 2020, provides an additional £175,000 allowance under specific conditions.

Gross tax and National Insurance contributions (NICs) for the same period reached £406.3bn, an increase of £11.1bn year-on-year.

Meanwhile, receipts from income tax, capital gains tax (CGT) and NICs amounted to £226.8bn, up £6.2bn from the previous year.

Laura Hayward, tax partner at Evelyn Partners, said: “The steady annual rise in IHT receipts has been ingrained in recent years as inflation has dragged more assets and more estates over the frozen nil-rate bands.

“Any changes aimed at increasing the IHT take beyond this fiscal drag effect are likely to reap outsize results over the coming years as the baby boomer generation reaches average mortality.

“So, it’s no surprise IHT is at the centre of Budget speculation again, with firm reports claiming business and agricultural property reliefs will be reformed and the gifting rules revamped.

“We have spoken to many people this summer who were bringing forward plans to gift substantial assets, not just to start the seven-year clock ticking, but also to pre-empt an expected CGT rise.

“It’s not out of the question that the chancellor could also look at the nil-rate bands, as the residential NRB has come under criticism for discriminating against those who can’t or don’t want to leave their main property to a direct descendant.”

Alastair Black, head of savings policy at Abrdn, said: “Families will be closely watching the upcoming Autumn Budget for any changes to IHT, with rumours rife that the chancellor will look to raise tax on inheritances to help fill the now reported £40bn target.

“One of the more likely changes would be to bring pensions into IHT’s scope. But I doubt they will go to a full 40% charge as they won’t want to encourage consumers to use up their pension more quickly. It’s a balancing act. Further actual tax revenues could take a long time to come through, so changing the gifting rules to simplify and shorten seem likely too.”

Chancellor Reeves ‘wrapping herself in a straight jacket’ ahead of Budget

David Denton, technical consultant at Quilter Cheviot, said: “IHT is a highly emotive issue, and it has been ripe for reform and simplification for many years given it is full of impenetrable and irrelevant details in need of review.

“Historically, inheritance tax has been viewed as a tax on the wealthy, but this is simply no longer the case. IHT is one of the most hated taxes in Britain and can be incredibly polarising given the rich can often avoid it by employing expertise to help them navigate the complexities of the tax and the available reliefs, while those without such resource can be disadvantaged.

“If reports are true and Labour opts to make IHT more punitive, it could choose to balance this by modernising gifting laws. Simplifying the IHT regime and increasing the annual gifting exemption could ease the complexity of transferring assets and help families pass wealth on during their lifetime. Raising the gifting timescale would encourage earlier wealth transfer, potentially boosting consumer spending.

Andrew Tully, technical services director at Nucleus, said: “For IHT, changes could be made such as scrapping or updating the rules on agricultural land and business relief. Currently, a person can claim up to 100% relief on the inheritance of agricultural land if it is being actively farmed. This could be reduced, or certain limitations placed on the maximum value of the relief.

“Changes could also be made to the IHT benefits of holding shares on the Alternative Investment Market (AIM). AIM shares need to qualify for Business Property Relief and be held for more than two years at the time of death to qualify for IHT exemption. However, this may run contrary to the desire to increase investment in UK businesses, to drive further growth.

“Advisers can help clients mitigate these taxes by setting up trusts, making use of gift allowances, spousal exemption and using a pension to pass on wealth to family in a tax-efficient way. Additionally, equalising assets between spouses and civil partners, and making use of the “no gain no loss” disposal, could mean all exemptions can be utilised and household income increased if there is a disparity in the rates of tax each spouse pays.

“Alternatively, people could hold assets within a tax-efficient wrapper such as an Isa, pension or bond.”

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The top US consumer finance watchdog has finalised long-awaited “open banking” rules that it hopes will inject more competition into a market with more than 4,000 lenders and make it easier for customers to link their bank accounts to newer apps.

The rules announced on Tuesday by the Consumer Financial Protection Bureau bring the US more in line with the UK and Europe, which had previously codified rules around how financial data is to be shared.

“Too many Americans are stuck in financial products with lousy rates and service,” said CFPB director Rohit Chopra. “Today’s action will give people more power to get better rates and service on bank accounts, credit cards, and more.”

The CFPB has been working on the so-called Section 1033 reforms for eight years, which stem from a provision in the 2010 landmark financial regulation Dodd-Frank act. Since the law was passed third-party apps that are linked to an individual’s bank account have proliferated, without clear rules on how information should be best shared.

The information can be shared through an API (application-programming interface) that allows two websites to easily communicate with each other. But “screen scraping” — where consumers share their bank log-in details for bots to copy their financial information, a practice that regulators have taken a dim view of — is also still used in the US.

The CFPB’s rules will compel banks to put in place systems that will facilitate consumer access to their financial data such as transaction history, account balances and payments details. The CFPB said it was requiring this data be made available for free, and that it hoped these rules would deter the use of screen scraping.

The issue of whether banks could charge a fee to third-parties for data sharing had been an area of contention. Banking lobbyists had argued that banks should have the option to charge a fee given the costs of building systems to facilitate the data sharing.

One aim for the rules is to make it easier for customers to use third-party apps and also stimulate more competition among banks. The US has about 4,000 banks, which range from behemoths such as JPMorgan Chase with more than $2tn in deposits to local lenders with tens of millions of dollars in deposits.

Banks with more than $850mn in assets and fintech companies will be subject to these new data sharing rules.

Advocates for open banking also argue that it could pave the way for greater adoption of direct account payments in the US, known as pay by bank, as a viable alternative to credit and debit cards that typically charge higher fees.

THOUSANDS of pensioners who will no longer receive the Winter Fuel Payment are set to get grants worth £175.

Almost 10 million pensioners will not receive a Winter Fuel Payment which is worth up to £300 this year after chancellor Rachel Reeves changed the qualifying rules.

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From this winter the payments will be means-tested and will only be given to people receiving Pension Credit and several other benefits.

The cash were previously available to anyone over the age of 66 regardless of their financial situation.

As a result, many households are worried about how to make ends meet this winter and are looking for ways to get support with essential costs such as food, water and energy bills.

Some will be able to claim support from their local council through the Household Support Fund.

The Government has given money to local councils in England who will then decide how to distribute it to people who are eligible for support.

What households are entitled to and how much they will get varies depending on where they live.

The current round of support is worth £421million after the scheme was extended until April 2025.

Tower Hamlets council has revealed a £1million package of support to help households this winter.

Some of this money will be used to provide grants worth £175 to households who will no longer receive the Winter Fuel Allowance.

Tower Hamlets council said it expects nearly 5,000 pensioners to be eligible.

Payments will be made to those eligible in the coming months.

Executive Mayor of Tower Hamlets, Lutfur Rahman, said: “Making the Winter Fuel payment means-tested will have a detrimental effect on pensioners who are already facing the rising costs of energy bills.   

“This creates a risk that pensioners will not turn their heating on for fear of not being able to pay the bills, which is wrong. 

“This is why we are stepping in and providing a £175 safety net for those who will be missing out.”  

What is the Winter Fuel Payment?

Consumer reporter Sam Walker explains all you need to know about the payment.

The Winter Fuel Payment is an annual tax-free benefit designed to help cover the cost of heating through the colder months.

Most who are eligible receive the payment automatically.

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Those who qualify are usually told via a letter sent in October or November each year.

If you do meet the criteria but don’t automatically get the Winter Fuel Payment, you will have to apply on the government’s website.

You’ll qualify for a Winter Fuel Payment this winter if:

• you were born on or before September 23, 1958
• you lived in the UK for at least one day during the week of September 16 to 22, 2024, known as the “qualifying week”
• you receive Pension Credit, Universal Credit, ESA, JSA, Income Support, Child Tax Credit or Working Tax Credit

If you did not live in the UK during the qualifying week, you might still get the payment if both the following apply:

• you live in Switzerland or a EEA country
• you have a “genuine and sufficient” link with the UK social security system, such as having lived or worked in the UK and having a family in the UK

But there are exclusions – you can’t get the payment if you live in Cyprus, France, Gibraltar, Greece, Malta, Portugal or Spain.

This is because the average winter temperature is higher than the warmest region of the UK.

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You will also not qualify if you:

• are in hospital getting free treatment for more than a year
• need permission to enter the UK and your granted leave states that you can not claim public funds
• were in prison for the whole “qualifying week”
• lived in a care home for the whole time between 26 June to 24 September 2023, and got Pension Credit, Income Support, income-based Jobseeker’s Allowance or income-related Employment and Support Allowance

Payments are usually made between November and December, with some made up until the end of January the following year.

Tower Hamlets will also work to increase the number of pensioners in the borough who are eligible for Pension Credit but are not claiming.

It estimates that 4,500 residents could be eligible for the benefit, which is worth over £3,900 a year.

Pension Credit gives you extra money to help with your living costs if you are over 66 and on a low income.

It also opens doors to other support including the Winter Fuel Payment.

To be eligible you must have an income which is below £218.15 a week if you are single or £332.95 as a couple.

This is known as the “guarantee” part of the credit.

Even if your income is higher you could still claim if you meet other requirements, such as having a disability, being a carer, having extra housing costs or living with a child.

If you have more than £10,000 in savings then you may find that your payments are cut or reduced.

But it is still worth applying even if you only get a small amount of cash each week.

Residents have until December 21 to complete an application.

The London Borough of Tower Hamlets Outreach Team can support claims through its website.

Can I get help if I don’t live in Tower Hamlets?

To receive help you will need to check with your local council, which is in charge of distributing funding.

You can find your local council using the gov.uk council finder tool.

There should be information on your council’s website about how to apply.

You can also call them to ask for more details.

Each council has a different application process, which will vary depending on where you live.

This means that the criteria you will need to meet to access the fund could also vary.

In some areas you do not need to apply for help as your council will contact you if you are eligible instead.

What are other councils offering?

Residents in Birmingham can get £200 to help pay for household essentials including energy and food bills.

Meanwhile, West Berkshire Council has set aside £45,000 for struggling pensioners this winter, with priority access for those no longer eligible for winter fuel payments.

In Devon pensioners and households receiving welfare benefits can apply to receive cash from the council’s £5million Household Support Fund budget.

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

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