A councillor wants to see the information that persuaded the council to broker a £36 million loan for the Brighton i360.
Conservative councillor Samer Bagaeen called for an assessment of all professional reports and council documents relating to the business case for the i360 before it had planning permission.
Councillor Bagaeen made the call in a letter to Brighton and Hove City Council’s Audit and Standards Committee today (Tuesday 21 July).
He said that he wanted to know what councillors knew about the financial benefits and risks before the council agreed a £36 million loan from the Public Works Loan Board in 2014.
Green councillor Leo Littman, who chairs the council’s Audit and Standards Committee, said that it was not appropriate for auditors to go back through 15 years of documents.
He suggested that Councillor Bagaeen put his request to the council’s Policy and Resources Committee instead.
Labour councillor Tracey Hill said that there had been “no consensus” about underwriting the i360.
She said: “There were a number of councillors who were not at all sure of the business case and did not feel the council should proceed.
“I would have thought the business case and all the debate decisions around it would be in the committee papers.”
At the time, the Green administration’s 23 councillors voted for the loan with the support of 13 out of 18 Conservatives.
All 13 Labour councillors at the time and five Conservatives – Mary Mears, Dawn Barnett, Lynda Hyde, David Smith and Geoff Wells – voted against the loan.
Conservative councillor Garry Peltzer Dunn said that looking back over the decision could have repercussions.
He said: “If the information from specialists … was so grossly inaccurate, we should pursue matters through professional negligence.”
The council gave planning permission in 2006 before there was any question of loans or even a business case.
Veteran Labour councillor Les Hamilton said that chaired the Planning Committee at the time.
He said: “Planning came first. It was only after planning consent was given that the finance came into play.”
The council’s chief internal auditor Russell Banks said that his service was under extreme pressure and that the issues were also not a matter for professional standards.
Outside the meeting, Councillor Bagaeen said: “An audit committee should have teeth and, in this instance, I was disappointed.
“Given that the financial resilience of the council is now at the top of our strategic risks, it is disappointing that the committee could not take a more serious view of the matters I have raised regarding the soundness of advice the council had received from experts.”
Loan repayments are currently on hold due to the covid-19 coronavirus crisis.
Green councillor Tom Druitt asked a series of questions at a “virtual” meeting of the council’s Policy and Resources Committee on Thursday 9 July.
He asked how many loan payments were made in full, in part or not at all.
Of the eight payments due up to and including the end of last month, three were made in full, totalling slightly more than £4 million.
The council also received four part-payments, totalling £1.8 million.
Councillor Druitt also asked why the committee had ignored its decision last December that the i360 should cover all interest payments due to the Public Works Loan Board.
Of course Cllr Littman would make it as difficult as possible as he was a member of the Committee that gave it funding approval.The Greens got it passed through with a couple of votes from The Conservatives.Labour voted against it.
Rolivan is right about Cllr. Litman’s attempts to sweep Cllr. Bagaeem’s eminently sensible request for “Auditors with teeth” under the carpet. The trouble is that HE now finds himself a part of the new GREEN Administration who, during their previous period in power, aided and abbeted by certain “Conservatives” who really should have known better, created this monster in the first place. OH DEAR! And Nancy Platts’s former shambolic administration can’t claim the moral high ground either, simply because her Labour predecessors in opposition had voted unanimously, along with those five true Conservative Councillors at the time, against the Council guaranteeing the loan with Council Tax Payers’ money–WHY–well because SHE accepted the Officer’s recommendations to time after time defer the i360’s repayment instalments to the Council and of course, her spineless councillors, as always with the slavish support of the Greens, were only too happy to comply. The question that needs to be asked is why she failed to recommend that the Council accepted the offer of Luke Johnston, owner of the Palace Pier, to take over the running of this white elephant? Another question might be (perhaps for Cllr. Bagaeem), would the Auditors know whether the ‘Specialists’ employed to ‘advise’ the Council, plus the Officers who recommended acceptance of that sage ‘advice’, along with the Councillors who made so fast and loose with public money by voting to guarantee the loans for this fantasy be held, jointly and severally, responsible for the financial loss to the citizens of Brighton & Hove–ie–SEQUESTRATED?
In conclusion, Perhaps it’s poetic justice that the Greens, in their blind pursuit of power, now find themselves having to take financial responsibility for the financial illiteracy of their past mistakes?
As I said in a press statement at the 2017 General Election Couant at the Amex: “Welcome, everyone, to the AGE OF CHAOS– it’s likely to be with us for the forseeable future!”
The West Pier Trust are the landlords who have control of the land it occupies & they commissioned it. The Council loaned money but have no ownership or management rights so unless it seizes the i360 & its debts it cannot interfere & appoint Luke Johnson or anyone else to run it.
Julia Barfield is Probably still a major shareholding owner of the i360 company.
If the West Pier Trust are not receiving Rent from BRIGHTON I360 Holdings Ltd then how are the staying solvent with Rachel Clark now in a full time position also adding to costs.
That being the case, Valerie, I would have thought that the west Pier Trust, as Head Leaseholders of the site, are perhaps in breach of the terms of their Lease, in which case, Surely the soution to the problem is for the Council to investigate the forfeiture of same, thus returning to public ownership that chunk of prime real estate, including what remains of the pier itself.Right back to square one as it was, after all, successive Council Administrations of three different political persuasions who have criminally presided over the agonisingly drawn-out, near death of The Grand Old Lady.
A couple of votes from the Conservatives?
I think you’ll find it says 13 out of 18 Conservatives voted for it, or 72% support from them, and overall 66.66% (36 out of 54) of ALL councillors at the time voted to support it.
At the time, I remember it being stated by the auditors (internal and external) in the press, that the calculated income was a reasonable assumption and in line with projected visitor numbers, BUT (and people can’t see into the future) since then we’ve had the ongoing disruption from rail strikes – the longest running industrial dispute which started 26th April 2016 between the RMT and Southern Rail and still goes on, AND the worldwide shutdown due to Coronavirus.
Just because SOME people don’t like the project (especially the overbearing heritage types who only want everything to look Victorian or so expensive to build it never gets done), doesn’t mean it isn’t good for the economy of Brighton & Hove over the long term.
I’m glad it’s here frankly, Brighton needs a good kick up the ar*e as well as a good scrub, and get rid of all the moaners too!
I think Cllr Peltzer Dunn was a member of that panel also as was Cllr Shanks.
Whilst this this going to be debated could there be some light shed on whether The West Pier Trust are receiving rent and business rates are being paid?
Planning was perhaps less scrutinised than desirable in 2006 when the entire dept was being bullied by the Labour Administration over the King Alfred Karis applications (2) which dominated everything from 2005 to 2007/8.
Because of the early stage involvement of famous Frank Gehry a lot of silly idiots were wetting themselves like schoolgirls over a pop star & clearing the decks to focus on it.
It was going to “put the city on the map” don’tcha know!
The fact most of it was Piers Gough work & the central towers were just cruciform concrete with crumpled aluminium sheets, expected to be tacked up the walls somehow, never got advertised – except by saveHOVE bursting delusional balloons!
Regency Square Residents were not against i360 and regeneration notions prevailed. The arches needing repair… The former city council CEO working for the commissiining West Pier Trust needs a look… Their project. Not the city’s.
The council had a chance to stop things when planning consent was expiring in 2009 & NOTHING had started.
Sadly after fishing some bits of metal out of the foreshore the BHCC lawyers judged that planning consent was implemented.
Ask the West Pier Trust why no time limit for completion was contractually sorted. As with the Frank Gehry celeb-worship so the archtects of the London Eye blinded & dazzled judgments.
The i360 ws going to put the city on the map…
The £40m question is why wait until now to ask tbe question when so many of tbe Council Taxpayers were asking years ago?
Is there more to this recent turmoil with the leadership of the council than we are being made aware?
These were the cllrs who were present when voting for the funding to be approved.
J.Kitcat,G.Bowden,I Davey,B.Randall Green Party.
G Theobald,A Norman,Peltzer Dunn Conservative Party
W.Morgan,L Hamilton,A Lepper Labour Group.
The vote went 7 to 3 in favour of approval.
The whole Council never voted and in my opinion when sums of money over £10m is being spent the whole Council should vote.
Important to remember the loan was agreed in 2 parts. The first PWLB loan to i360 of about £14m had ALL PARTY UNANIMOUS SUPPORT!
David Marks went away & failed to raise the balance needed & it was only after the 2nd offer to top uo to £36m that Labour & 5 Tories witheld support.
i thought the Public Works Loan Board guaranteed it and thus the Council did not have to pick up the bill
BHCC BORROWED from PWLB at about 4% preferential interest & loaned the sum on at about 7%. The intention was to earn £1m a year interest over 25 yrs from i360 plus % of ticket sales to put towards city services expense. And cllrs were seduced by serious financial need and belief in the silly visitor numbers the business case led them to expect.
The city is desperate for income because of the removal by central Govt of local Govt grant. Now it is really stuffed.
Send him Kitkat’s and Theobald’s phone numbers / email addresses and they can explain.