A council tax payer quizzed political leaders about what was being done to stem further losses from the loan to the Brighton i360 seafront tourist attraction.
Hove resident Nigel Furness said that the debt was about £51 million – and he feared that it was growing.
Mr Furness spoke out at a Brighton and Hove City Council meeting at Hove Town Hall on Thursday (14 December).
The former council and parliamentary candidate said: “If they can’t pay, will they take it away, please?”
The council is currently making a £2.2 million a year provision – over the next 20 years – to pay back the £36 million borrowed from the Public Works Loan Board to get the i360 off the ground.
So far, the i360 has repaid £5.8 million but, under its original repayment schedule, had been due to stump up almost £18 million by September this year.
Millions of pounds of repayments by the i360 have been missed, with the operator blaming bad weather, the coronavirus pandemic restrictions and visitor numbers falling short of forecasts.
Councillors agreed to a revised loan agreement but the i360 did not sign the deal although it did hand over £700,000.
Last December, the i360 was due to pay at least £900,000 but failed to make any payment.
Labour council leader Bella Sankey said that the i360 should not have been financed with taxpayers’ money but Green and Conservative councillors voted to use public funds.
She said: “It was Green and Conservative councillors who lumbered the council with this significant debt and this reckless use of public funds which was an unforgivable lack of judgment and which they must never be allowed to forget.
“Despite this, we hope that this landmark in our city can turn itself around as nobody sets to gain from its failure, least of all residents.
“It’s for this reason that myself and Councillor (Jacob) Taylor have met with the current managers of the i360 to talk about their plans.
“While the total debt now stands at over £44 million, any rise in the debt owed is due to the addition of rolled-up interest for elements of the loan that have been deferred. It is not additional borrowing by the council.”
Councillor Sankey said that the council’s priority was to recover all or as much of its money as possible.
The i360 had let space to Sixes Social Cricket and was preparing a new long-term business plan while the council was continuing “to explore all options”.
Councillor Taylor said that if the council put the i360 into “default”, it would mean that the council could suffer the entire financial loss straight away.
He said: “This could cause a big problem in a year. The strategy that’s being pursued is the right one for now which is to try to make the business viable and support it.
“There are mixed views as to what the actual attraction looks like. It’s a great piece of engineering at least and, when you get up it, there are some great views. So I don’t think there’s an immediate plan to take it away from the seafront.”
This is the ship the Labour administration will go down with since yesterday’s Full Council question proves they refuse to let go of it at any cost. It was the perfect opportunity to separate themselves from an albatross they claim they never voted for yet they choose to cling on for grim death as if it were their very own. They can hardly blame the Blues and Greens for approving it in the first place if they are just as committed to keeping the crap flying saucer going, and in the face of threatening bankruptcy.
Nigel Furness has highlighted a remarkable lack of business judgement, by Council Leader Bella Sankey and her Labour Colleagues – they are not business people – and don’t know how to run the i360 Visitor Attraction in Brighton – but as they keep pumping £2m per annum of ratepayers money into this Money-pit – they are cutting schools and social services budgets – to the same amount each year, to the detriment of Council Tax payers and their school children – without a 2nd thought ! – Its a disgrace and the Council should close it down immediately – and restore Council budgets for junior education and not waste our money on financial schemes which are of no interest to hard working people in Brighton
Chris Baker
Mate it’s not a football match. Your not liking Labour isn’t gonna change anything. The fact is that Labour voted against it and Green Party councillors, backed by Conservative councillors, pushed the funding deal through. Finished. Now they are blaming the pandemic (Blues do it for everything) but we are well out of it and the profit of that thing is meaningless compared to the monster loan that needs repaying.
Well said. Assigning blame is a fairly meaningless exercise. Actually working through the loan is the solution.
Facts are getting skewed.
The first agreement to lend to Marks Barfield was a top up amount of about £13m. ALL THREE PARTIES VOTED FOR IT.
All the money previously pkedged privately was then withdrawn by investors!
When Marks could not replace lost investors, he smoothly asked the Council for the WHOLE circa £36m (other bits from other Govt pots were added too). LABOUR ABSTAINED; it did NOT vote against.
At least they aren’t spending an extra 2 million quid a year on cycle lanes!
Councils should be prevented by law to using any money other than on council services. That applies also to organisations funded by us like the Police Commisioners dept. They all come back to the public for more money once they have exhausted or in some cases wasted the money they were given. They in many instances dabble the money in things they do not understand. Prime example the i360 mess.
Christopher this seems to be the common error exhibited from many here. Money to the i360 is a loan, wether it gets paid back is another issue but potentially it is not a cost. Cuts to the schools budgets are from central government because the dedicated grant shrinks as pupil numbers shrinks, (monies are determined by the amount of pupils in school). Even if they didn’t loan the £2 million to the i360 it would not go towards the schools.
BHCC borrowed to lend to i360 (twice); so it incurred a multi million Pounds cost (plus interest at c4%).
Why are Marks Barfield not chipping in to pay for this pile of junk? They were the ones who were laughed out of every office in the city of London with their projected visitor figures. Also Jason Kitcat, former council leader and Geoffrey Theobold need to be held to account for their base vanity and gross negligence.
Good to hear that Nigel Furness is still above ground, pushing pins into the vulnerable parts of local politicians. Keep up the good work, make em squeal 😊
Why are Marks Barfield not chipping in to pay for this pile of junk? They were the ones who were laughed out of every office in the city of London with their projected visitor figures. Also Jason Kitcat, former council leader and Geoffrey Theobold need to be held to account for their base vanity and gross negligence.
Good to hear that Nigel Furness is still above ground, pushing pins into the vulnerable parts of local politicians. Keep up the good work, make em squeal 😊
£2.2 million a year for a hideous monstrosity, hated by many ratepayers. Think what that amount would do for local social services instead.
This “landmark in our city” should never have been constructed in the first place, even if it is a “great piece of engineering”. It should be demolished once and for all, and just be a blot on the memory in the history of Brighton & Hove.
Considering the ’dodgy dossier’ that was the business case for this tin-pole and doughnut, I’d like to see the SFO get involved to investigate for fraud and maleficence in public office!
you would still have the debt whether it was there or not
Yes, close it down now!
Thank you Nigel for your wise words.
Nigel is fairly lacking in intelligence if he truly believes closing it down will somehow magically make the debt disappear, unfortunately. His words are nonsensical.
Pots and kettles!
When did Mr Furness say these words about debt ‘magically disappearing’ exactly Benjy boy? These would seem to be YOUR words which you are trying to insert into his mouth. Mr Furness was questioning the council on its most obvious public money pit – the i360 – and trying to establish what the plan was to prevent further losses since we are supposed to believe our Labour council is in financial crisis.
It is pretty clear that our council would be struggling financially whoever was running it – largely due to years of funding cuts by the corrupt Tories in Westminster!
The fourth sentence.
I am a leaseholder resident of BHCC and like many are facing high bills to repair council owned buildings….. I like many would like to know where years of maintenance fees have gone which should be readily available to make these repairs instead we are faced with overwhelming bills to pay!!!
I think a full government investigation needs to take place to find out why our council have been allowed to get into this debt and stop exploiting the taxpayer and local residents to pay for their mistakes!!!
Thank the good lord for nigel furness,I have always said that the greens and co- horts that were involved with the approval of this absolute monstrosity were not able to see that there is no future for Stunts,at the taxpayers expense but theres a litany of of enormous misery, and mistakes made by not only by them,but also previous holders of the purse strings of this ONCE BEAUTIFUL PLACE, unfortunately we have gone from a borough that MAINTAINED THE WHOLE OF BRIGHTON, from pavements, parks and gardens,the painting and all sorts of tasks that made it pleasingly nice to live and work here,now it’s a place that’s congested with ugly ,ugly,high rise building,PAVEMENTS that are not fit for purpose as are the narrowing of roads,the destruction of established flora,and forms to the absolute detriment of the residents whom have to put up with indecisive behaviour by those in charge at the time,its not good enough.
Missing from the liability calculations is the price of removing it. Just saying..
Which will cost just about as much as erecting the eyesore did!
…that doesn’t make sense Ken.
I think that taking the i360 tower down would be hugely costly.
To reverse the original building process would mean creating a huge jack strong enough to lift the tower while each section is removed from below – and the tower is then lowered, section by section.
The second option would be to blow it up, so the tower topples towards the sea. And then divers would have to take the remains apart in the water, section by buckled section.
Either demolition method would cost millions, and the site would still need to be cleared of scrap metal and other debris. Plus the council’s loan debt would still have to be paid.
The only financial benefit might be in then letting the vacated seafront plot to a new tenant. However that land might, technically, still belong to the West Pier Trust.
So the idea of knocking down the i360 is a total non-starter.
A very clear explanation!
Drones to fly each section away as it is cut?
I’m guessing you enjoy watching science fiction and fantasy films.
Barry might be a Factorio fan?
We always get angry comments about the i360 and I too am no fan of what is an ugly stick that spoils the Brighton skyline.
But it’s important we get our facts straight and to see what choices the council now has.
1) If we pull the plug on the debt owed by the i360 then that debt still has to be paid by the council – and by us. So closing down the i360 is no solution while that company still covers its own running costs. The area is quite vibrant, and people are employed by the company, so it does contribute to the local economy as a whole.
It’s the debt repayments on the original loan used to build the thing that are the problem, because the i360 continues to default on payments due.
2) If the council were to call in the loan, effectively bankrupting the i360, the only money coming back in would be if a new business bought what was left, and that wouldn’t include the debt. The council could also try and run the i360 itself (bad idea), or else face the costs of dismantling the tower (resulting in even more costs to us, the taxpayers).
3) Encouraging further development of the existing site, allowing new income sources for the i360, is the only way we might get them to increase their payments towards the debt.
4) If you’ve lived in the city long enough you’ll know the i360 was initially seen as the long term solution to the demise of the West Pier – which was never coming back after that final fire. All political parties were in favour of the early i360 designs, but then the project stalled when the company could not raise private funding to build it. The Greens – then the largest party in charge of a minority administration – decided to fund the project via a government loan which now forms the debt we are dealing with. This was voted through at the time by the Greens and with the help of Conservative councillors – whereas Labour councillors at the time voted against, because they didn’t think the projected visitor figures added up.
5) So this Green/Conservative f*ck up is what the current council have inherited, and they and future councils are saddled with these debt interest payments at a time when budgets are already severely stretched. The current council are having to live with the least-worst outcome, which is where they pressurise the i360 to pay the debt interest in larger increments than has happened so far. It’s the financial equivalent of learning to live with a festering wound. It was KitKat and his Green cohorts who inflicted that initial wound.
6) On a further historical note, I understand that the West Pier Trust still own the land the i360 is built upon, and it would be interesting to know if they still benefit from rent from that land and how much. Indeed, why does the West Pier Trust still exist at all?
A pretty good background context but I need to clarify further:
1 i360 Planning consent was granted in 2006 BY A LABOUR ADMINISTRATION.
2. Consent was due to expire 2009 but BHCC lawyers ruled it implemented after bits of metal were fished out of the seashore area. Planning blight followed as funds insufficient to erect it.
3. The actual loan is not repayable for 25 years from agreement time. BHCC borrowed to lend on and the annual interest payable to BHCC by i360 was supposed to help finance BHCC services (£1m p.a.). It was the persuading motive for agreement of the “high risk” loan.
None of that detail contradicts what I wrote. – Or changes the fact that it was a poor decision, pushed through by the financially-inept Greens and helped by Tory votes to gain a majority.
Labour councillors voted against it or else abstained on the basis that the initial i360 idea had seemed good, but then the final visitor figures didn’t stack up, which is why there was no private funding forthcoming for the project.
The Greens now have a history of flagship vanity projects they are determined to see through – and who remembers the Velo cafe at the Level, with its leaking fake green roof?
In this case, the i360 project was voted through as the predictable white elephant it has become.
Let’s hope we never have wide-eyed gamblers in charge of our city budgets again.
I agree about the West Pier Trust mystery – it seems a contradiction to still have it given the track record it has. Some sort of overall plan needs to be made to run the site to benefit the council as a whole, not a separate organization that might have had a purpose once but not now.
Install a portaloo and change central government to keep asylum seekers on it.
That will make a profit as central government will pay a bundle.
They keep talking about Rwanda (pointless, illegal costly policy) but being housed on the i360 would be a credible deterrent to those crossing the channel!
Hope readers understand this post is not to be taken seriously!
Should read charge central government
Like the Victorian railway companies who all went bust the i360 will eventually pay for itself. It is built to last and will be enjoyed by generations to come.
Nigel a very good example. Yes it is true with a lot of projects. The projections and presentations in order to get the initial investment are always over stated. Good example modern day was the Iridium Satellite System. That went under by a spectacular amount, a lot of organisations lost their initial investment. A consortium of people bought it back to life and its doing well now. Not sure how much if any of the original debt was returned to the original funders. Like your example the railways survived but people would have lost a lot of money and their companies initially.
Sadly your analogy doesn’t work, because the public railway lines had a long-term purpose in transporting people and goods – something which attracts repeat customers.
With the i360, which is more akin to a funfair ride, there is only limited demand for people to go up and get a different view – of what is really an unremarkable townscape or seascape.
I like the design of the glass pod, but you don’t go on the i360 a second time. Hence the limited appeal, and low visitor numbers.
A good long term investment would normally establish a repeat customer base. And there’s the problem here.
The Council should investigate a debt-for-equity swap. The Council would then own the structure, could run it themselves and take the profits -if any, or sell on the equity to anyone willing to buy it – so long as the Council covers its costs.
I also think the Council should take over the i360. The operator does not seem to be able to make it pay enough to clear the debt. If that was you or I the mortgage company would take our house and sell it.
Hideous thing, would be more valuable as scrap at this point.
You joke, however, it would cost more to scrap it.
Sell it to the Americans, they could mount it on the edge of the grand canyon. I’m sure they’d make money from it.
Agreed all concerned, including us City taxpayers, seem to be caught between a rock and a hard place, whereby the only way forward is to calculate and agree a least-worst option?
Back in 2011-12, around the time of an earlier application from the i360 for a much smaller loan, business-minded locals were communicating to the Council, both in the media and in direct communications to seniors at BHCC, that the project could never be financially viable.
These assertions were mainly based on comparisons with the then new Top o’ Texas Tower at the State Fairground in Dallas. A standard Super Gyro Tower 1300 built by Intamin of Liechtenstein, world leaders in observation towers since the1960s! Plenty of info still on the Internet!
So around 2012 such a tower, similar in height to the i360, could have been installed at the West Pier, up and running, for about £9m, including the foundation works etc!
As the proposers/developers said they had £6m ready (their own investment grew to £10m) chipping-in some £3m of taxpayers money could have been a reasonable punt?
Especially as the Gyro Tower 1300 is a proven standardised design, with documented profitability for its operators at various locations. Profitability is assured because, with more than 50 years experience in building attractions, Intamin have designed their Gyro Tower to give rides to 1300 passengers per hour, compared to only some 400 per hour for the i360!
The main way in which Intamin achieve this superb performance is because, as the name suggests, their ‘doughnut’ slowly gyrates spirally around the tower as it rises and falls, which means passengers remain seated whilst getting multiple panoramic views!
With a much lower capital cost, and a much higher passenger capacity, rides on a Gyro 1300 can be much cheaper than on the i360. Probably in the region of what the Palace Pier charges for its (expensive?) fairground rides! Whereby many parents will feel able to afford a Gyro Tower ride for their children on each visit to our City, just for fun?
And the point of recounting this history? To inform any reader/taxpayer, with the resources to make a claim, of the ‘Dereliction8 of Duty’, potentially amounting to ‘Malfeasance in Public Office’ by the Council’s three Statutory or Officers involved (the CEO, CFO, and the Monitoring Officer – of whom only that last remains on our payroll), initially on the grounds of repeatedly permitting reports to go to our Councillors with recommendations to financially support the i360, plus on further more detailed grounds.
In 2014 Labour, in opposition, voted against proposals to lend money to the i360. As the record shows Labour didn’t oppose on any arcane Party Political basis – they opposed because by 2014, and having done their homework, they knew profitability could never be achieved and thus, as our Elected Representatives, they met their duty towards us City taxpayers by voting against any loan!
Which in, 2023, makes one wonder what planet Leader Sankey is on in spouting the pious, but futile, hopes that the i360 might become profitable? Or did she, and Deputy Taylor, not get the memo back in 2014?
But we are where we are which is:
The article above states that our Council has already made an advance provision in its budgets (presumably the Capital Budget?) of some £2.2m pamforn20 years, so effectively us taxpayers seem to have been rolled into actually purchasing the project outright?
It would be nice to know when and where such a momentous decision was taken, and what the voting was, if it actually was a decision democratically made in open Cttee proceedings? It also might be questionable as to whether this Administration actually has the power to ‘fetter the discretion’ of subsequent Administrations for the rest of that 20-year period?
However, due to the construction of the tower (rolled and welded heavy steel plate cylinders with flanged ends bolted to each other), ynd its location in a coastal environment, the HSE are likely to demand an intensive inspection and test survey be conducted somewhere between 2030 to 2035. That’d be a major operation, probably costing around £3m, or more, at today’s prices!
So Game Over then, with the loans and compounded interest unpaid, leaving us taxpayers to then fund demolition?
So the main question remaining for Labour to really research seems to be:
Is it better to knowingly provide ‘State Aid to Private Enterprise’, by de facto continuing to subsidise one Julia Barfield (born Nov 1952), and her two remaining co-directors (born in 1942 and 1948) or:
For BHCC to exercise its contractual right to seize possession of the project soon, and then to either demolish it now, or to find an operator (such as the Royal Pavilion team?) to run it at a smaller loss than the i360 people for the 7 to 10 years remaining until the HSE says Stop?
Those looking for more detail would do well to enter the following Google search term:
beta i-360 attractions ltd
On the Filing History page of that Companies House website they’ll be able to get a free PDF download of the Annual Report and Accounts up to Jun 30, 2022. But helpfully these include financial projections up to Feb 2024, and even profit and loss figures for
2021-22. A truly eye-opening read!
And scrap value? Unlikely to exceeed the costs of demolition, because steel makers much prefer light scrap from shredded car bodies! Which means an enormous, and costly, amount of work on the beach to cut that heavy plate into small enough pieces to be accepted as scrap!
Bravo! But I repeat: Labour backed lending i360 the first hefty multi million Pounds PWB acquired funding amount. And failed to take a definitive stand by voting against replacing Marks Barfield’s entirely withdrawn private investors with more PWB borrowing. Labour chose sit on their hands & just tepidly abstain. Crowing now needs to be honest! Own it! Voters cannot trust Labour otherwise.