The risk of Brighton and Hove City Council having to repay the i360 loan has grown with the latest missed payment, according to a former leader.
Labour councillor Daniel Yates said that the scale of the debt could saddle council tax payers with the bill for a generation.
The i360 was due to make a payment of at least £900,000 at the end of last month but was unable to do so.
In total, the operator of the seafront attraction has made payments totalling £5.8 million since it opened.
It was initially due to pay just under £3 million a year. The council agreed a revised payment schedule last year, reducing the level of payments to £1.6 million a year initially.
Last summer, the i360 handed over £700,000 although it has not signed the revised loan agreement and its sponsorship by British Airways has since come to an end. No new sponsor has been found.
And at the end of September, the council owed just over £27 million to the Public Works Loan Board, with the i360 owing the council more than £47 million.
The prospect of the council having to foot the bill for the i360’s debt comes as the council wrestles with an overspend of more than £10 million in the current financial year.
The council also faces a budget gap of £8.3 million in the 2023-24 financial year which starts in April.
Councillor Yates said: “We may end up being liable for some or all of the capital costs of the i360 – over and above the £8.3 million gap that still exists in the administration’s plans to balance the budget.
“Now, I just did a little bit of maths, looking at what we know about how much public debt is held by the i360 and how much they’re managing to pay us.
“Now, I can’t see our liabilities being much less than at best £1 million or £1.5 million a year because we’ve got to pay this money back.
“And we’ve got to pay it back before the bloody thing falls down quite frankly – let alone make sure that it operates – and operates well so that it makes as much of its payments as possible.
“Yet in the past 12 months it’s made payments of around £700,000. Well, that isn’t enough to pay off its debt. That’s nowhere near enough to pay off its debt.
“It needs to be creating a surplus two or three times that in order for us to feel happy that there’s not going to be a liability to every single resident in this city – a liability that could stand, if they don’t make any profit, at somewhere in the region of £7 for every man, woman and child that lives in the city every year for the next generation.
“So babies being born at the hospital now – £7 every year until they’re an adult in order to pay off the i360 and the debt that is liable from this council to the public purse for what’s turned out to be an enormous phallic symbol, sticking one finger up at the whole of the city.
“It’s ironic that it’s one of the few parts of the city’s modern heritage that’s visible from almost every part of the city including the Downs and it’s the one that’s creating the biggest liability.
“Can you imagine that liability being added on? We’re actually saying that our financial position isn’t actually £8.3 million. It could be £9.3 million or £10.3 million. That’s another £2 million or £1 million of savings that are going to have to be found.
“That’s schools. That’s support. That’s nurseries. That’s more public toilets being closed. More charges being introduced or hiked.
“That is services that our local residents depend on, not being delivered to them – not as a result of government cuts but as a result of bad decisions by this council, bad decisions that this Labour group didn’t support that other councillors did support.
“Not entire groups, it has to be said. There were councillors of all shades who actually raised concerns about the amount of money that was going to be spent.
“But at the end of the day it was forced through by a Green administration and now the debt looks like it’s going to come into the budget under a Green administration.
“I think that’s a real signal to the whole city about the impact of bad decisions – and there’s a big decision coming up in May and I hope people don’t replicate their mistakes of the past.”
Green councillor Tom Druitt, who chairs the council’s i360 Member Working Group, said: “There are a number of points that Councillor Yates has made that are valid and we across the council chamber all share the concerns and frustration and, I have to say, also anger in some cases about where we are and how we got here – and that’s the reality.
“I don’t think going over what happened three administrations ago is massively useful. Yes, we all know the history. We all know that Labour didn’t support it.
“But we also all know that those who did support it supported it for valid reasons on the basis that, on the information provided at the time, this attraction was going to … regenerate a very unloved part of the seafront which actually looks fantastic. It’s been really well regenerated.
“That whole stretch has come to life in a way that it probably wouldn’t have been able to without that investment.
“It has obviously had a big effect on the city’s economy and on hotels, taxis, fish and chip shops, restaurants. You name it, everyone’s benefited from it.
“The council obviously has a huge liability and we can all agree or disagree about whether that decision should have been made (but) we are where we are.
“We’re working together. Labour is well represented on the (i360 Member Working Group) – as are the Conservatives and the Greens. And we work together.”
He said that the group now included an extra member from each political party, adding: “This is a very serious issue.
“It needs to be well understood across the council and what we do needs to be discussed and, where possible, agreed by the whole council because that’s how good decisions are made.
“So let’s not argue about the whys and the wherefores of the past. Let’s look forward. Let’s try to get the best result for the council, albeit not the result we wanted. And I think we can all agree that it’s not the result we wanted.
“But I think the example that Councillor Yates gave in monetary terms isn’t very accurate because it’s the worst-case scenario, assuming that the i360 provides no income to the council at all. That’s not on the table. That’s not an option.”
The i360 closed last week for its scheduled annual maintenance but has advertised a series of events in the coming months including gin tasting, yoga in the sky and stargazing.
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