Questions have been asked over a series of loans made to private businesses in Blackpool by the council.
Following a Freedom of Information (FOI) request, officers at the council’s Information Governance Team have said £20,880,028 was handed out to nine firms from 2016 to date.
The request followed the news in June that the council had lent £80,000 to Dudley Leisure, the company behind Viva Blackpool.
Dudley Leisure was at the time in a company voluntary arrangement to pay off debts after running into cashflow problems that bosses blamed on a range of issues, including the roadworks in town putting off customers at crucial times.
At the time, Coun Tony Williams, leader of the Conservative opposition on the council, questioned the wisdom of lending too much to private businesses.
Sam Ward, from the South Beach Hotel, who submitted the FOI request said: “I think a lot of people in Blackpool will not realise how much has been lent by the council to private businesses which is strange given the amount of money involved.
“I can understand why Blackpool Transport might get loans – to buy new buses – but I can’t understand why others should get them especially when some of them are supposed to be successful and world-leading businesses. All I am saying is that we need to have a level playing field.”
Blackpool Council has pointed out in the past that loans, taken out at the lower rates councils can command, are used to drive progress in the town and support businesses which create jobs.
But Mr Ward said: “If they want to give me £100,000, I would be happy to create four new jobs here.”
Coun Tony Williams said: “ I have previously questioned the council’s wisdom in lending extremely large amounts to businesses in the town that have very little potential of delivering more jobs on a large scale. There certainly doesn’t seem to be a level playing field with some businesses getting preference over others.”
Coun Graham Cain, Blackpool Council cabinet secretary, said: “One of the key priorities for Blackpool Council is to support regeneration and growth in the town.
“Any business can apply, but loan requests must be able to demonstrate a clear benefit to Blackpool in terms of investment and return on investment.
“With any loan there is an element of risk whether it be made through a bank or a council. However, detailed due diligence is undertaken at the application stage.”
Where the loans went:
£475,000 to springs specialist Force Technology
£50,000 to Ascent Trampoline Park
£7,740,000 to Blackpool Transport Services
£4,500,000 to Create Developments, which built the Hampton By Hilton hotel
£100,000 to collapsed charity Jobs Friends and Houses
£80,000 to Dudley Leisure
£113,775 to West Coast Choc Ltd
£7,749,502 to Blackpool Transport Services
£71,751 to restaurant firm Lucky Number 3 Ltd