The £51 million debt owed by the beleaguered i360 tourist attraction has been written off so that the administrators can sell it.
Brighton and Hove City Council leader councillor Bella Sankey said that this would be the “least worst” option and was “incredulous” at the position that the council was in, with taxpayers taking the burden.
At a cabinet meeting this evening (Thursday 23 January), Councillor Sankey said that a derelict i360 would become like the West Pier but without its “rugged rustiness” loved by many.
She said: “If the i360 can operate again then it can help bring in business rates. And if we proceed with the recommended buyer that has come forward, the city council will get a small share of future revenues.
“While this may be the least-worst option, I understand why residents are so incredulous that this situation has come to pass – I’m incredulous and angry.”
She said that the amount of money going towards the “reckless venture” was sickening as she backed an inquiry into the decision which she said was made at the expense of residents.
Councillor Sankey said : “It is heartbreaking, genuinely sickening, to look at the amount of money, the millions spent on this reckless venture.
“It’s not going into the pockets and the futures of the people of this city, the children, the families that are made homeless because we have so much pressure on the general fund.
“This money has been taken from the mouths and the pockets of the people of this city.”
No buyer could be found to buy the i360 before it went into administration last month when it was clear the business was unable to service its debts.
More than 100 staff lost their jobs in the week before Christmas. The council was the largest of dozens of creditors including several catering companies and food suppliers.
The sum owed to the council is more than £51 million including interest .
The council brokered the loan from the Public Works Loan Board – and still owes £32 million or about £2.2 million a year over the next 16 years until 2041.
The Labour deputy leader of the council Jacob Taylor has been working with the administrators to deal with the “bad hand” that the council has been dealt.
Councillor Taylor said: “It was with no pleasure that any of us saw the attraction shut and 109 people made redundant at the end of last year.
“We face a set of relatively unappetising options but it is really important that we make the decision and take the option that this best for the city and I believe what is recommended is the best option.
“The council could take it on as the main creditor. If that were the case, the council would have to plough in taxpayers’ money to get it running again.”
Councillor Taylor said that he was not willing to take further risks with taxpayers’ money when the council was struggling.
Leaving the i360 to rot was also not an option because it brought in more than 200,000 visitors a year which in turn helped to provide nearby businesses with customers.
Councillor Taylor also advised the cabinet to order an investigation into the decision-making process in 2014 saying that the council “cannot make a mistake of this magnitude again”.
Despite hopes of a revenue-sharing arrangement, the council’s financial plans do not factor in any payments from the potential future operator.
Councillor Taylor said that the situation was something that the council would have to accept to keep the seafront thriving.
Green councillor Chloë Goldsmith, who represents Regency ward, which includes the i360, asked what the council was doing to communicate with businesses that had lost passing trade as “footfall” had decreased since the it closed.
Councillor Taylor said that the council’s seafront team had good contacts with the area’s businesses and would connect them with the new buyer.
A fellow cabinet member, Birgit Miller, said that the i360 could not be left to decay on the seafront because it would become dangerous and would require even more money to be pumped into it.
She said: “If one was writing a satire of insane council decisions, this would be used as the sort of a council completely losing the plot.”
“The problem is this is a massive structure on the seafront. If we do not write off this debt and have a really competent operator to make this work, we’ve seen what will happen.”
The report to cabinet said that the directors of Brighton i360 Limited would “not benefit from the transaction”.
The only way to avoid any future mistakes of this “magnitude” is to exclude every councillor with no qualifications nor business experience, make sure they have no say in anything that has more than a nominal daily function or costing, has anyone ever checked the references or qualifications of those councillors involved ???
agree..was there ever a business plan. ? I doubt it..A first year economics student would know it was not viable… ever..Something v strange aka a vanity project. Note the promo ” the highest moving structure outside of Dubai”
ah..that? no mention of viability or profitability. Disgrace. Council ( taxpayer) will end up paying for the expensive demotion of the thing.
the credentials of the ” buyer?”.. I dread seeing
WILL THERE NOW BE AN ENQUIRY INTO THIS FIASCO?
Will the council refer itself to the SFO?
Will central government investigate this vast waste of public money and how it was obtained?
Another disgraceful waste of our money by the council. The Greens and Labour have run this city into the ground, and have given away our money, but nobody will be held accountable.
The loan was approved because the Tories votes with the Greens to approve it.
Labour were against the £36m loan. And its even minuted that that was its position.
Labour councillors do seem to try and erase from history the fact that they were also supportive of public finance for the i360 after the financial crash in 2008. It was only as it got closer to the 2015 local elections they came out in clear opposition to the finance side.
Maybe I’m getting too cynical in my old age, but I can’t help by suspect that was a calculated risk which has paid off for them. They would have known that the numbers stacked up between the Greens and the Tories for it to go through. Labour supported the i360 from the outset and championed the idea nearly 20 years ago, so if things had been a rip roaring success and they voted against they still could have pointed to their historic support and tried to gain credit from that. If problems did happen, they’s be in a position to finger point and say we told you so.
That’s my theory and old-age cynicism showing through. Either way it’s all a bit of a fiasco – just interesting to see so much political backtracking there is when I remember Labour (along with other political parties) crowing about how brilliant the i360 project was over the years.
More likely The Greens screwed up big time because they are clueless, inept and lacking in financial acumen. Perhaps a hint of contrition on their part might help, but that’s not going to happen because the Greens are never wrong.
Initially the loan was very small that was supported by all parties. A business group pulled out that’s when the £36m loan was proposed and never supported by Labour.
“Labour supported the i360 from the outset and championed the idea nearly 20 years ago, ”
Yes that was with the planning application which is a totally separate issue to any financial involvement.
Who wouldn’t want to support a new business on the city brining in jobs and visitors?
Later in the process Labour suported a £14m loan.
What changed their position was for the council to make a £36m loan.
Hi Tom, Hi Buster, I’m def not saying Greens didn’t make mistakes, they did, but so too did other parties. I’m also just making the observation that the timing to Labour’s change of heart was very close to an election, that could be coincidental, but whether it’s local elections or national ones there can often be lots of political posturing, tactical position etc – all parties do it – its’ not limited to Labour.
Another idiot commenting on something they clearly know nothing about – it was the Tories who backed the Greens i360 plans and Labour voted against it!
Ian T
The i360 concept was proposed way back in 2006.
Quote: Planning permission was granted in 2006, with the then Labour leader of the council, Simon Burgess, stating that “It is going to transform the city.
The Brighton West Pier Harbour Revision Order 2007 granted under the then Labour government conferred powers to the Brighton West Pier Trust for leasing the pier and making byelaws to regulate the pier, allowing the i360 project to move forward.
The project was initially intended to be entirely privately funded.
Following the financial crisis of 2007–08, Marks Barfield approached Brighton and Hove council for a loan. The council initially agreed to support the build with a £14.8 million loan, but this was raised after an unnamed private equity investor told the architects it could no longer proceed and withdrew its planned £15 million contribution in 2012.
In March 2014, the project was expected to cost £46 million, with Brighton and Hove council lending £36.2 million from the Public Works Loan Board and architects Marks Barfield contributing £6 million.
Yes there will be. an inquiry as mentioned in the article and also the report that went to the cabinet meeting – available on the councils website.
If they can run an inquiry into the decades long issues at City Clean too whilst they are at it too – the problems there have cost the city millions over years and years.
The KC report that was published in 2023 refers to political interference preventing some serious issues being tackled effectively before – I find it shocking that there’s been no investigation into this.
Get Donald Trump to visit and sign a few executive orders in the pod at the top. It will become a place of pilgrimage and the footfall will reach 7-800,000/year (as per intial calculations for busines case). Then BHCC will get a share of the profits. Simples
And that was that £51m just basically thrown away, they knew at the start the Weymouth one at£5m (a third of the size) didn’t work but Kitkat steam rollered it through and try to get Merlin Entertainments involved (Weymouth tower and 2nd largest theme park operator in the world) who wouldn’t touch it with a barge pole.
Should have been stopped long ago so head should roll! But will they no and don’t forget 25% of your council tax pays for their pensions.
Where does this 25% figure come from because I don’t recognise it from any reliable source.
So please provide your source.
Also councillors aren’t eligible for a council pension as they are barred from joining the Local Government Pension Scheme.
What about if the next lot can’t pay after a while. Also are the council going to try and recoup their losses from us? Normally when a debt gets written off by a council they have to cover the losses in their budgets. (I may be wrong but I think that’s what has happened with previous councils.) I want more transparency. The council are answerable to us and should ensure this time we are clear on the Pro’s and the Cons.
There was a mention of some future payments being made by the new owners back to the council, but no explanation as to how if it was losing to start with.
See my above comment.
The new owners won’t have a huge loan to repay so will be able to make a profit on a smaller number of visitors.
The “next lot” won’t have the problem of a £ multi million loan to repay the council.
And yes the has already budgeted £2m a year to repay the loan back to the government.
For transparency go to the meetings calendar on the councils website and ready the reports!
Chris C , you are a rare but welcome voice of informed reason. Keep up the good work!
Whoever buys the i360 will be running it without any support from the council, therefore will be fully down to the new owners as it will be privately run.
The debt owed by the council to the loan board. Whatever happens we have to pay off the loan, this is already budgeted at £2.2 million per year for the next 20 years.
The debt owed by the i360 to the council has been written off, this means the project can be sold off to a private buyer who can then run it as a private venture. There could be a deal where the new owners share any profits but they will not be legally bound to agree or do so.
If the Council can write off the i360 debt, It just goes to show they have the ability to write off ALL council debts if they so choose.
If not, perhaps they can explain WHY not.
Eh? Why would the council write off other debts they are owed unless there is zero chance of recovery?
Oh dear, this is a debt owed TO the council, they can’t write off debts that the council owes.
Because it’s a debt owed to the council, they can forgive it. It’s like if I lend you £100, you say you can’t pay it for whatever reason, and I say “Don’t worry about it.”
Bizarrely, Jason has found employment. I wonder if they know about his trail of disasters in Brighton & Hove?
Director of Digital, Data & Technology at the UK’s Department for Business & Trade. Passionate about tech for good & public service.
So – if you don’t pay your council tax, BHCC will chase you for payment almost immediately.
However, they’re happy to write off £51m!
All at the Council involved with this debacle need to be accountable for their actions
Hardly a valid comparison, Harry.
Harry just needs to be £51m in debt to the Council, problem solved.
In a couple of years that’ll be two years council tax the way this lot of muppets are going
As the saying goes, “if you owe the bank £100, that’s your problem. If you owe the bank £100 million, that’s the bank’s problem.”
I think the saying was if you owed the bank £100 that’s your problem, if you owed them £100m then you’re a customer they can’t afford to lose.
Brighton pier Group are preferred bidders.
Public money should never have been used to fund this and those responsible should be properly held to account making sure they get nowhere near a postion of trust ever again. The role of a council is to run public services and not get involved in any private ventures especially highly risky one.
You didn’t need to be a financial genius to see this was never going to work so why did they plough ahead regardless?
A good question to ask the Greens.
Judicial review needed with prosecution of all those involved in this fiasco for malfeasance in public office.
As I’ve explained to you before Mike, for malfeasance in public office to apply, there must be clear evidence of deliberate misconduct or bad faith by public officials, such as intentionally misusing power for an improper purpose.
In this case, the council’s decision seems to have been made through democratic processes and in line with their legal powers, even if the outcome is controversial. Unless there’s evidence of actual malice or a breach of duty with intent to harm, it’s unlikely a claim of malfeasance would stand. Judicial reviews focus on legality, not the wisdom or morality of decisions, so unless there’s a procedural flaw, your call for such action seems unfounded.
So the i360 is going to be sold, who gets the money when it is sold. As we are owed £51M the council should be classed as the owner and get all the money from the sale.
As a business, i360 has no sale value. If a credible operator can be found, expect the sale price to be a whopping £1.
West Pier Trust bought the land from Brighton Council in the late 1970s for £1. The council need to compulsorily purchase it back for a £1. They have no right to exist any more after letting West Pier rot and burn into the sea.
What land did the council sell to the Trust?
As far as I can tell the council never owned the pier.
Unfortunately Mike, that’s not how compulsory purchase orders work.
Important to note Robert, is the council never owned the i360 at any point. The Greens simply used taxpayer money to fund it. A costly mistake that still effects the budget to this day.
So now with a council that lacks funds for public services and can barely keep a toilet open for residents they have a £2 million loan to repay every year. We owe the debt and there’s no money going to ever come in to repay it. I fail to see how this was the best option. However I’m no expert but neither it seems are the people who are making these random decisions. It feels like we are sorely lacking in expertise and just have bog standard representation who cannot really be bothered to think outside of the box.
It was the best option for getting the existing company sold and bought by a new operator who will be employing staff and paying wages and rates etc.
No new business was ever going to come in and take on the i360 company with a multi million pound debt and £2m a year loan repayments.
The council has already been budgetting for the £2m interest due on the PWLB loan for a couple of year alreadty but yes it means that there is £2m a year less to spend on other things like social care and repairing potholes and keeping toilets open etc
Its no good telling us its the best of a bad position, go look at your own Council’s Audit department who obviously kept signing off the figures etc.
Councillors going right back to the beginning should never have believed the visitor numbers included in the business plan so look inwards not outwards when carrying out any investigation.
Which business in its right mind will take on and operate a venture that from day One has never reached any viable numbers let alone pay the Council a sum from its “Profits.”
Yes there is a business that is going to buy the now defunt business
But as it won’t be encumbered by paying off a £2m per annum loan to the council so it will be able to make a profit from few visitors than the previousl got.
BTW the expected visitor numbers were challenged and reduced several times yet with the benefit of hindsight these were still too high. This is information included in various committee reports and meeting minutes that are still on the councils website and so publically available.
We DON’T want an “inquiry”( see also self investigation & whitewashing). We DEMAND criminal investigations