Finance For Brighton's 𝗶360 Questioned

A city councillor wants to see the information that persuaded the council to broker a £36 million loan for the Brighton i360.

Conservative councillor Samer Bagaeen called for an assessment of all professional reports and council documents relating to the business case for the i360 before it had planning permission.

Councillor Bagaeen made the call in a letter to Brighton and Hove City Council’s Audit and Standards Committee today (Tuesday 21 July).

He said that he wanted to know what councillors knew about the financial benefits and risks before the council agreed a £36 million loan from the Public Works Loan Board in 2014.

Green councillor Leo Littman, who chairs the council’s Audit and Standards Committee, said that it was not appropriate for auditors to go back through 15 years of documents.

Labour councillor Tracey Hill said that there had been “no consensus” about underwriting the i360.

She said:

“There were a number of councillors who were not at all sure of the business case and did not feel the council should proceed.

“I would have thought the business case and all the debate decisions around it would be on the committee papers.”

At the time, the Green administration’s 23 councillors voted for the loan with the support of 13 out of 18 Conservatives.

All 13 Labour councillors at the time and five Conservatives – Mary Mears, Dawn Barnett, Lynda Hyde, David Smith and Geoff Wells – voted against the loan.

Conservative councillor Garry Peltzer Dunn said that looking back over the decision could have repercussions.

He said:

“If the information from specialists … was so grossly inaccurate, we should pursue matters through professional negligence.”

The council gave planning permission in 2006 before there was any question of loans or even a business case.

Veteran Labour councillor Les Hamilton said that chaired the Planning Committee at the time.

He said:

“Planning came first. It was only after planning consent was given that the finance came into play.”

The council’s chief internal auditor Russell Banks said that his service was under extreme pressure and that the issues were also not a matter for professional standards.

Outside the meeting, Councillor Bagaeen said:

“An audit committee should have teeth and, in this instance, I was disappointed.

“Given that the financial resilience of the council is now at the top of our strategic risks, it is disappointing that the committee could not take a more serious view of the matters I have raised regarding the soundness of advice the council had received from experts.”

Loan repayments are currently on hold due to the covid-19 coronavirus crisis.

Green councillor Tom Druitt asked a series of questions at a “virtual” meeting of the council’s Policy and Resources Committee on Thursday 9 July.

He asked how many loan payments were made in full, in part or not at all.

Of the eight payments due up to and including the end of last month, three were made in full, totalling slightly more than £4 million.

The council also received four part-payments, totalling £1.8 million.

Councillor Druitt also asked why the committee had ignored its decision last December that the i360 should cover all interest payments due to the Public Works Loan Board.