25th Oct, 2020

Council bosses defend £1m Coombe Abbey loan

CITY Council bosses have defended their decision to lend £1million to the struggling council-owned Coombe Abbey Hotel without a vote or debate, amid criticism from opposition councillors.

Conservative councillors say the Labour-led council ‘rushed’ through the decision using emergency powers.

They raised concern that the loan was granted without a vote, and asked the council why private investment hasn’t been secured and whether a future bail-out could be required.

But the council said the loan was essential to keep ‘a much-loved part of our city’ financially secure, and would be repaid in full.

In 2013, acting as the hotel’s landlord, the council agreed to take over a bank loan thought to be around £6.5m.

In 2017 the council bought the business in a deal estimated to be worth between £8-11m. They then lent it a further £2m in October 2018 to be repaid over a ten-year period.

Conservative Group leader Coun Gary Ridley said: “First Labour tried to buy the hotel in secret, now they’ve rushed through an emergency bail out on the quiet.

“Frankly, it’s been a dreadful deal for the people of Coventry and continues to drain money away from public services when they need it most.

“How much more will this Fawlty Towers fantasy cost the people of Coventry?”

The group’s jobs and regeneration spokesman Coun Peter Male also criticised the Council for buying other businesses.

He said: “They’ve exposed residents to the full effects of a global downturn and there’s no knowing how many more bail outs will be required.

“They should focus on providing services instead of taking over businesses they don’t know how to run. This all feels a bit like a game of monopoly but it’s the people of Coventry who’ll pick up the tab.”

Council leader Coun George Duggins said: “Coombe Abbey Hotel has, like all hotels and businesses in the leisure sector, had a difficult few months as a result of COVID-19.

“In line with government instructions, the hotel closed on March 23 and will remain closed until July 11 following the lifting of restrictions.

“The hotel has taken the full government support of furlough schemes, HMRC support and business rate relief, but no revenue has been coming into the business, and action is needed to help make sure it is financially secure.

“This loan is being made on commercial terms and will be repaid in full by the hotel. The loan will ensure that the business has the finances it needs to continue trading.

“Coombe Abbey Hotel, and the surrounding parkland, is a much-loved part of our city. It has a wonderful history and is now a major part of our visitor attraction.

“Recently it has grown even more popular with the addition of the Go-Ape high trees adventure and we are confident that it has a bright future ahead in helping our city through its year as UK City of Culture and beyond.

“This loan payment will support the hotel through these unprecedented times and help both the business and our city as we emerge and continue our recovery.”

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