A councillor’s call for Brighton and Hove City Council to investigate how the i360 could be saved has been overtaken by events with the attraction having closed.
Brighton and Hove Independent councillor Mark Earthey asked for a special cross-party scrutiny committee to carry out an inquiry.
Councillor Earthey wanted a report on how the i360 has ended up in administration and what options could minimise job losses and further financial risk to taxpayers.
He was speaking at a meeting of the full council last night (Thursday 19 December), just over 12 hours before the i360 announced that it was closing, without paying its staff.
The company’s biggest creditor is the council which is owed just over £51 million after arranging a loan from the Public Works Loan Board in 2014.
The Labour deputy leader of the council Jacob Taylor agreed that some form of investigation was needed.
He said that it was up to those who chaired the council’s scrutiny committees to decide their own agenda but it was a “reasonable idea” to look at the i360.
Councillor Taylor said: “So serious is the amount of money at play here and so serious is the legacy, my personal view is we actually need an exernal audit on this issue to look at the historic decision-making and the amount of money that was extended.
“It’s not about a blame game. It’s about genuinely learning the lessons. This is a vast amount of public money, whatever the outcome is, to be lost on one decision.
“For good health and good governance we need to learn the lessons of that. Perhaps scrutiny is one way (ad) an external audit the other way.”
Councillor Earthey also called for the council to “open the books” on the i360 to councillors.
He said: “The poor quality of the commercial judgment of the i360 management team is an open secret in every venue in the city.
“It’s remarkably easy to get any information we want from this peer group within the city
“As we are now collectively responsible for the face of the i360, there can be no secrets from us. If we are responsible for it, nothing can be hidden from us. Otherwise, we can’t discharge our duty.
“Can Councillor Taylor assure this chamber you will now dismiss redundant excuses of confidentially and implement a totally transparent cross-party approach, open the books of the i360 to the members and fully exploit the commercial talents contained within our city.”
Councillor Taylor said that he would like to “unlock the many commercial talents in the city” but the full financial information was available only to commercial partners during the administration process.
The council brokered the original £36 million loan from the government-run Public Works Loan Board and repays £2.2 million a year including interest.
Since the business gave notice of its intention to file for administration late last month, Councillor Taylor has been meeting “almost daily” with the specialist advisers.
Inquiry seems reasonable. The question is how to repay the loan with a minimal impact on current services?
Obviously, the Council must “look at the historic decision-making” of this farrago, starting at least when the first fire was lit….
THE COUNCIL WILL WANT THE MONEY BACK AS I KNOW HOW IMPORTANT MONEY IS TO THEM THEY”LL PROBABLY PUT CIUNCIL TAX UP BY 3,000 PER CENT TO START WITH
Someone doesn’t understand how council tax works. If councils could raise council tax past the govt cap then they would have never needed to have engaged in ill thought out commercial investments like this in a desperate way to get more income as austerity slashed central funding across the country.
Any inquiry should not be about how it could have been saved, but how it could have been avoided. And how to avoid similar in the future.
A loss of this magnitude would trigger an investigation in any commercial enterprise.
That’s a lesson that was learnt years ago. There have been no commercial investments like this since so learning to not do the thing you’re already no longer doing would be a collosal waste of time and money and would then need a further inquiry into how to avoid doing inquiries on investments that you’re no longer going to do any more of because they don’t make you any money
Other than being a creditor, the council has zero involvement in the administration due to it having no board members or shares in any of the i360 companies
“…. special cross-party scrutiny committee to carry out an inquiry……..” How about the Police as well!!!!!!
So who was the moron who decided the i360 was a good plan and signed it off?
It wasn’t one individual. The council has 54 councillors. The majority voted to proceed with the initial investment because the business case at the time showed strong returns on the investment.
Once that money had been borrowed and loaned out to the company and further money was needed a majority of councillors voted to commit further funding to complete the project, again based on projections for what the renovation of the seafront arches would add to the area and the surround businesses. The amount borrowed by the council was a lot, the council then added a high interest rate onto the loan it then passed down to the company and then we had the perfect storm of Brexit, high interest rates, Ukraine invasion and the energy price driven inflation, COVID and the death of leisure travel, the cost of living crisis, the Liz Truss mini budget, more inflation, the economy stagnating further, employer NI rates increasing now the interest rate sticking high, tourist numbers further declining which put the final nail in the coffin as the loan which cost the council £31m has had so much interest added onto it by the council that the company now owes £51m making it impossible to ever be able to repay it.
The council should have written off a load of that debt as complete pie in the sky years ago and allowed the company to reduce the ticket price to try to drive up visitors and give it a chance to pay back something.
Your comment is probably the most comprehensive article I’ve read on this debacle. Nice one.
The council can’t write off any loans. The council borrowed the money and then lent it to the i360 companies. The council owes the money.
Thanks for the detailed explanation but everything has a starting point. Someone came up with the idea and sold it to others. Who’s the brains behind it…….I say brains but maybe that’s being generous.
I’ve been saying for years that Brighton should consider implementing a tourist tax. In many major tourist cities across Europe, a tourist tax has become a standard way of supporting local infrastructure, services, and the communities that welcome millions of visitors each year. It’s time for Brighton to explore this option. Manchester made 2.8 mil charging £1 per room, per night fee in their first year introducing tourist tax. This should be implemented on every tourists accommodation incl. Air Bnb. Visitors wouldn’t even notice extra £1 per night. Some European cities charge up to 3.50 Euro per night.
There should be a public inquiry into the I360 investment.