£1m RESCUE PACKAGE FOR COOMBE ABBEY hotel

COOMBE Abbey Hotel is to receive a £1 million rescue package from Coventry City Council to offset coronavirus pressures - but it has led to claims of a ‘taxpayer bailout’ being pushed through behind closed doors.

Authority leader Cllr George Duggins said the loan will “ensure the future” of the council-owned hotel while the hospitality sector struggles with loss of income from the pandemic.

The move was approved by council chief executive Martin Reeves through ‘emergency powers’ but it meant the decision was not publicly debated by councillors.

It has sparked criticism the decision was pushed through without scrutiny and has been branded a ‘taxpayer bailout’ by the Conservative opposition group.

The council purchased the hotel for a reported £11m in 2017 and handed it previous help such as a £1.95m loan last year to facilitate a Goape assault course.

Leader of the opposition Cllr Gary Ridley has challenged the move, adding: “It is absolutely shocking really.

“First of all it is £1 million of taxpayers’ money going into this scheme. By my estimations the council has now spent £20m on this and next week they will be pleading poverty and saying they have no money.

“I am perfectly happy with officers taking emergency decisions during the coronavirus in life and death situations but this does seem to me that it has been used as a chance to sneak something through without scrutiny.

“There is a pattern emerging of doing this type of thing and spending huge amounts of taxpayers’ money and pumping it into private businesses they do not know how to run and doing it in secret.”

Councillors were emailed after the decision was taken under emergency powers on June 29.

Cllr Duggins said the loan was discussed by the hotel shareholders board and Labour’s ‘political cabinet’ both without view from the public or opposition - but he brushed off criticism over a lack of scrutiny.

He said: “It is a legitimate process and the government’s Covid Act allows for decisions to be taken by the chief executive in consultation with the leader of the council.

“We have had to take a number of quite difficult decisions during the Covid outbreak.

“I do not see it as being any different to any other difficult decisions we have taken in the past few months.”

The Labour leader likened the loan to the government’s cash help for theatres and the arts during the pandemic.

He said: “It is a case of actually investing during a very difficult time. This loan will help Coombe Abbey through the pandemic.

“I am not saying the business would have gone under but there is a chance and we would have had to sell the business and what would we have got for it?

“We are making sure the future of Coombe Abbey and I think most people will see that.”

The hotel will reopen on July 11.

Covid impact on investments Coombe is one of a number of property investments the council has made, most recently including the purchase of Tom White Waste for a reported £14.5m. Cllr Duggins said the purchases are designed to bring in revenue and “plug the gap” of lost central government resources.

However even in February, a National Audit Office report found councils in England had spent £6.6bn on investments between 2017 and 2019 and warned it left many councils badly exposed in the event of an economic recession.

There are fears the sector now faces a severe downturn due to the pandemic, but the council leader and finance bosses have said it is too early to tell.

“It is too early to say,” Cllr Duggins said, “the principle of investing in these businesses has been to plug the revenue gap we have got.

“We have lost £120m [from government funding] and these investments have helped to plug some of that money.

“If we can ensure the future of one of our own shareholdings then we should do it.

Nothing would suggest that Coombe will be nothing but robust going forward.”

Earlier in June, Barry Hastie, director of finance and corporate resources at the council, also said the impact on commercial property and investments is not yet clear.

“There is a hard-line view that you have made those investments, you can’t expect national government to subsidise you should they not turn out to be good investments for whatever reason,” he added.