A subsidy of more than half a million pounds over five years is the difference between a working Health Hydro and an empty building according to a senior councillor.

Keith Williams, the Conservative administration's member in charge of corporate services and operational excellence defended the decision taken in secret last year to hand over £125,000 a year to GLL, the social enterprise company contracted to run the Health Hydro.

That decision was taken despite the initial contract with the company stating it was not to receive any additional funding other than a £2m reverse premium to allow repairs to be made to the listed Victorian building.

Member of the public Jim Boyd queried this decision. “The council gave GLL £2m when it gave them the contract as a one-off payment, and since then has also put in £1.5m for maintenance. When does a one-off payment become two payments?” he asked.

Coun Williams said: “The Health Hydro is something of a special case. It’s grade II listed, and since then has become grade II* listed.

"We know there are liabilities to do with the building, including asbestos, and we know the building needs a lot of work and development, but that’s difficult with a listed building.

“We have put in an extra £1.5m, but it’s also true to say that GLL has put in millions itself towards the building. The contract with GLL to run six leisure centres including the Health Hydro has saved the council £1.4m a year, which was the loss it was making on them.”

When Mr Boyd said GLL had agreed to the contract with the one-off £2m payment and no further funding, Coun Williams said: “They did, and they honoured that. But there was a break clause in the contract after five years, which they would be able to invoke, and the extra money makes the difference between having a working Health Hydro and an empty building.”

Coun Williams said the facility in Milton Road near the Railway Village was significantly more difficult to run than other leisure centres in the town because of it’s Victorian building and restrictions placed on making changes

This additional £1.5m for maintenance is to be split between back of house work to the mechanical and electrical services, and work to improve the front of house’ areas used by customers.

Council officers and GLL are in talks to agree the works to be carried out and it is expected the project will be put out to tender with work starting later this year.

The company, which trades as Better, is a co-operative society founded in 1993 by Greenwich Council in London as a way of running its leisure centres.