Blackpool Council loans come under scrutiny as accounts agreed
External auditors have carried out a comprehensive investigation into loans handed out by Blackpool Council amid fears the Covid pandemic could put repayments at risk.
The figures came under scrutiny from the council’s external auditor Deloitte as part of the annual inspection of town hall accounts for March 2019 to March 2020.
At March 31 2020, the council had provided loans totalling £78.3m to a number of its subsidiaries and private companies, and had offered a six month repayment holiday between April and September last year.
Presenting a 194 page report to the council’s Audit Committee for approval, Deloitte warned: “Due to the impact of Covid-19 on a wide range of companies within the economy, we believe there is a risk that some of these entities may not be able to repay the loans provided by the council.”
Inquiries by Deloitte included inspecting the financial backgrounds of a sample of those companies awarded loans, checking repayments resumed following the payments holiday and assessing the value of assets held as collateral.
Loans under scrutiny include payments to Create Developments (Blackpool) Ltd, Coolsilk and Ocean Boulevard, which are all involved in hotel developments in the town.
Deloitte says in each of these cases it has engaged “internal valuation specialists to review the valuation of the assets held as collateral against the loans and are awaiting their final report.”
The auditor also challenged the value of £9.8m put on Blackpool Transport by the council, and said its experts believed the value to be between £5.8m and £9.8m.
But this was only relevent if the council intended to sell the company.
Members of the Audit Committee agreed the accounts and the external auditor’s report, subject to the completion of some additional work still to be done, but the committee was assured ‘no material change’ was expected.
Councillors were also assured the external examination of the town hall’s accounts had shown the authority to be sustainable financially with its assets valued at a net worth of around a quarter of a billion pounds.
Audit committe chairman Coun Paul Galley thanked officers, councillors and Deloitte for their work on the accounts which he said meant “I can comfortably say to the people of the town that we are a sustainable organisation.”
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