The council aims to renegotiate the i360 loan repayment schedule because the seafront attraction cannot meet its current obligations.
Brighton and Hove City Council finance chief Nigel Manvell said that the i360 was not performing well enough even to meet a reduced level of repayments.
The council brokered the original £36 million loan from the government-run Public Works Loan Board and pays £2.2 million a year including interest. The i360 repayments have fallen short.
At a meeting last week, Conservative councillor Anne Meadows asked about the “expected credit loss” – up from £14.8 million to £26.5 million. Mr Manvell said that the outstanding i360 loan repayments were being treated as a “bad debt”.
He told the council’s Audit, Standards and General Purposes Committee that the original repayment schedule included a “commercial mark-up” but the council was not receiving this.
Mr Manvell said: “For the council, the real position is the underlying Public Works Loan Board loan which does not include the commercial mark up.
“And the council has something called a minimum revenue provision to meet the repayment of the Public Works Loan Board loan so the council is not in default.
“That cost is £2.2 million per year. The council has already approved that it will meet £1.2 million of that and the i360 is expected to pay the other million.
“That repayment is also potentially affected by the i360 performance and that is currently being reviewed as to the likelihood of them being able to make those payments in future.
“That’s something that is being discussed with the i360 at the moment.”
The i360’s outstanding debt to the council currently stands at £46.981 million.
Last year, it was due to hand over almost £1.5 million, with repayments scheduled for June and December. It paid just £250,000 in June 2023. No payments have been made since then.
In all, the i360 has paid £5.8 million over the past 10 years when it had been due to stump up about £20 million.
Since the meeting, Labour council leader Bella Sankey has spoken out about the situation. She said: “At a time when the council is experiencing significant financial pressures on our services, it’s incredibly frustrating we are still not receiving regular payments from the Brighton i360.
“This is contributing to the council’s budget shortfall and the need to make even more savings.
“Each missed repayment is money which could have been spent on vital local services.
“We are actively considering our next steps in terms of recouping taxpayer funds as far as possible.”
Perhaps the Council should take equity in lieu of debt and interest payments. Not a perfect solution, but it would be better than nothing.
They should surcharge the blethering idiots who approved this vanity project when anyone of sane mind and minimal business knowledge were disapproving.
And how would taking equity improve the situation on the councils budget?
The council needs cold hard cash from the i360 to repay the PWLB loan otherwise the repayment comes from the council tax.
Marks Barfield Architects company are the owners of i360 just like they owned London eye which was even more in debt.
Why are they not held accountable for any of this mess?
I see where you are going with that, aiming for an injection of capital from a private investment. I don’t know if you’d get someone who actually wants to do that though, so whilst the repayments are not so forthcoming.
I suspect they’ll negotiate longer term repayment for a lower interest rate to ease the pressure to pay back the board.
So many ordinary people realised that the figures in the business case just didn’t add up. But BHCC knew better! Those at the Council who were responsible for pushing this through need to have their collars felt by the Police – a clear case of malfeasance
If only the council had had the foresight to save the West Pier when they had the chance…..
How would a second pier have been able to produce anything close to a functioning business case? It would have just sat there doing nothing, generating no income at all.
Nobody is impressed by piers, look around the country, none of them really make any money and these are ones that haven’t just been rusting metalwork sticking out of the sea needing completely rebuilding from scratch.
The business case for the i360 was flawed even before the foundations went down.
It is your opinion that nobody is impressed by piers. I quite like them.
The West Pier up until recently was a complete unit. When suggestions were made to bring her back to life, the Palace Pier owners objected strongly and strangely within a short period of time the West Pier caught fire.
Read what you like into that.
When did the council have that opportunity?
Council has never owned the West Pier.
Yet if you are a couple of weeks late with your council tax they are all over you. One rule for them another for everyone else. It’s an absolute farce
Why is the SFO not looking at this debacle?
The original proposal never added up and someone has pocketed a great deal of our money and left us with a massive debt.
Absolutely. It is inconceivable that these huge debts are way more than just council incompetence, but must be intentionally fraudulent. It is long overdue that there is a criminal investigation into who approved what, and why. There are some council leaders that need to be behind bars.
Let’s face it – it is a dead duck as is and there is not going to be an magical increase in revenue here. The real question is would it survive if it had NO debts ? If the answer to that is “no” then we really do have an issue. I would wager that there is no budget for dismantling it either.
Give it to the new border force,to see when the rubber boats are being launched,and to tell us in advance to what beach they will be landing on
Sell it off! Buyer has to come and collect it at their expense! When the i360 was conceived, Brighton&Hove had aspirations as a world city. But the place became a dump full of graffiti tags, protesters and street drinkers. Those of better means became greedy and turned their properties into HMO’s instead of family homes, now not enough people come anymore which isn’t surprising is it. I know the council is trying its best but I think they need to draw a line under this and concentrate on making Brighton a decent place to live and bring up a family.
The Brighton way is simply to ask: “Is it insured for fire?”
That ‘draw a line under it’ means the Council and therefore us council tax payers having to fully pay off the loan and take the consequential hit on the councils finances.
I’m sure I read that if that happens the full £47 million needs to be repaid to the PWLB.
The council doesn’t owe £47m to the PWLB. £47m is just the made up number the council says that the i360 owe them. The council has to pay off it’s PWLB amount each year regardless of what the i360 does.
Don’t forget that in the latest (appalling reading) 2023 accounts, the value of the i360 has been written down to around £11m. Brighton i-360 Ltd actually owes £67m in total (as of 30th June 2023 – over a year ago) and shareholders’ funds of -£57m.
How much worse will the figures be for the current year?
Time for someone to be held accountable
There’s a lot of talk about “holding people accountable” but I have to ask… Why bother? Do you think anyone culpable for this fiasco has a hundred million quid down the back of the sofa to sort it all out? No. Even if some people or one person was found to have made a huge muck-up (or even committed some kind of fraud) they’d get a slap on the wrist. These white-collar crimes are usually pretty leniently dealt with. Hell, even if they threw someone in gaol for the rest of forever… What good would that do? This is an enormous financial drag for the city and unless we can find a way to make a success of it, it will remain a burden for decades. Dismantling the thing, while an arguable improvement of the skyline, is just committing to that burden.
It’s called the i360 but 180 degrees of that 360 is the sea! Little wonder people don’t want to visit it! We had a Brighton Wheel which did a perfectly good job so they took it down in place of this awful project which anyone with half a brain could see was going to fail!
Send the bill to the Green and Tory parties. Those of us that knew about finances from the start said it would not pay why should ordinary tax payers and services have to suffer because of this
Malfeasance in public office is a crime. Where are the police? Why aren’t they questioning Kitkat and cronies?
No way that abomination should have cost £50 million. You can put up a multi storey fully serviced office block for less than that all those years ago. Someone was getting fat on kickbacks methinks
This was obviously going to happen as it has limited value as a tourist attraction. Once you’ve done it, no need to go again. Very expensive and short journey so bad value for money. Flog it to the Saudis and be done with it.
This is a real travesty, I only wish the council listened to the construction companies at the time, when they said it was impractical as a money spinner, let’s face it, how many tourists do you see on the promenade from October to March, that’s six months of what I would call kipper season. This is a huge black hole, which will only get bigger, sometimes cutting the cloth is the ony answer, why do people think british airways walked away.
Enough said, say good riddance to the damn thing
Think about take the keys away then and not being able to use it then or let it be take away
Think about take the keys away then and not being able to use it then or let it be take away dose the city need it
It’s a bad penny you know you need to put it in a better place then it will make money
Maybe we could turn it into an ivory tower for the proposed unitary mayor to rule from?
It ws never going to be profitable from the very beginning. The Council were hoodwinked into beleiving it was viable and when nobody else would invest, Mr Kit Kat himself persuaded the Council to take it on and bankroll the debt.
The figures visiting and using it given in the Business plan were always pie in the sky but with no real Financial appraisal done it got passed.
Rescheduling the debt will not improve it. Just pull it down, sell as scrap, cut the inevitable losses and bite the Bullet. Unfortunately its the people of B&H who must foot the Bill.
Sure, selling ideas and getting others to pay for it is a profitable business!
It’s not the current administrations fault.
Sankey is now the boss and despite her limited experience she appears directional and energised; tough decisions are being made. Easy to be a boss…hard to be one that takes the criticism with expectation.
Id rather have Sankey at the helm than the weak predecessors; no one else put their hand up!
The Council had step-in rights from the beginning, and still has. Why haven’t they used them? I imagine because they know it’s a failed ‘project’ and don’t want it on their plate. The numbers never worked. I challenged them on visitor numbers, revenue and profitability before it was built (as did others), and they ‘assured me’ it would be profitable and they would use the step-in rights if needed. In my view, this amounts to misuse of public funds.
Well, as an Engineer, this thing must have a maintenance schedule which must cost a considerable amount ,adding to the costings, which after all is basically is, as described by a very earlier poster, is nothing more than a ‘ Lift’.
I mean Poster on this subject, not an advertising poster!
How any time have the fire service been to help out the 360i after it break down then it frist open for business then 10 times how pqy then for the service then
White elephant 1350 joke