Blackpool Council warns its companies are set to lose millions of pounds
The eight companies owned by Blackpool Council face losses of up to £18m due to the Covid 19 pandemic, councillors have been warned.
Those worst affected are expected to be Blackpool Transport which had to reduce services and suspend the trams during lockdown; the Blackpool Entertainment Company which manages the Winter Gardens which remains closed; and the Blackpool Operating Company which runs the Sandcastle water park which is also still shut.
Steve Thompson, director of resources, told a meeting of the council’s executive it would take five years for the companies to recover.
But he said while the figures were “quite eye-watering”, the council was not among those local authorities at risk of insolvency.
Mr Thompson said pressures facing the council included “our exposure to losses amongst our eight wholly owned companies.”
He added: “We have done a significant piece of work looking at the best, worst and likely scenarios.
“At this point in time we are looking at a range between a loss of £9m and a loss of £18m.
“We have been working very closely with all the companies to develop a five year strategy where the council can support them to help them claw that back.”
The other companies owned by the council are Blackpool Airport, Blackpool Coastal Housing, Blackpool Housing Company, Blackpool Waste Services and Lancashire Management Operations.
The executive also heard during April and May, the council faced extra spending of £11.2m on its day-to-day services mainly due to pressure from children’s services, while another £12.8m of extra spending was in response to the Covid crisis.
But two tranches of additional government funding had brought in nearly £9m, with up to £2m expected to come from a third tranche.
Mr Thompson said he believed the council had enough money in its reserves and balances to cope with the pressure , while the government had shown “a commitment to compensate local authorities for the loss of non-commercial income.”
He said it had recently been reported 131 out of 151 upper tier authorities were at risk of insolvency during this financial year, but “Blackpool isn’t one of them as it stands.”