Bristol Beacon has been valued at zero pounds in the city council’s accounts – and the authority has already written off £39million on the project, it can be revealed. Costs of a massive refurbishment of the building, formerly the Colston Hall, more than doubled just over a year ago from £52.2million to £106.9million after on-site investigations found the crumbling Victorian concert hall’s structure to be a “worst-case scenario”.
That saw Bristol City Council’s share of the bill balloon from £10million to £54.5million which was approved by mayor Marvin Rees’s Labour cabinet in March 2021 with both support from cross-party scrutiny councillors to plough on with the project rather than letting the venue “disintegrate” as well as calls for an inquiry. Conservative Cllr Jonathan Hucker has now crunched the numbers in the authority’s accounts that show, in financial terms, Bristol Beacon is effectively “worthless”.
He says that if the council was operating as a business, this would be a “financial disaster”. In response, the council says the Beacon’s value to the city goes “well beyond the bricks and mortar” because the investment stimulates economic growth, creates jobs and increases tourism.
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It says the total economic impact of the works will be about £410million over two decades, supporting nearly 400 jobs a year, and that this will “ultimately dwarf” the cost to repair and reopen the attraction, so it is “incorrect” to say the site has no value. But Cllr Hucker says the 2021 accounts show the council has so far written off £39million on the revamp, including £20million incurred in 2020/21 on top of £19million carried forward from the previous year.
He said: “Bristol City Council can also expect to have to write off expenditure on the refurbishment incurred after March 31, 2021. I therefore expect the accounts for 2021/22 will take another big hit. The council is bearing all the risks of ownership, yet receiving none of the rewards. This arrangement seems less than prudent.”
Cllr Hucker said the nil value in the accounts, known in accounting terms as fully impaired, was because of the terms of a 40-year peppercorn lease of the building to Bristol Music Trust (BMT) which made the venue “of little economic value” to the council. He said the agreement’s restrictive covenants prevented it from being used for other, more commercial uses that could limit the authority’s losses.
In an email reply to Stockwood ward Cllr Hucker’s questions about the Beacon, which has been seen by the Local Democracy Reporting Service, council chief finance officer Denise Murray said: “It is estimated that the future capital value of these premises discounted back to today’s prices is circa up to £10million. The cost to complete these premises as at March 31 (2021) was significant and exceeds the capital value and has therefore been valued at zero.
“This valuation is based on its existing use and the covenants that restrict the use of the asset and/in the lease agreement. The value of this cultural venue to Bristol as a city is higher as the valuation excludes the economic productivity that these premises will generate from visitors to the city.
“These such metrics are excluded from valuations for provision of the statutory accounts.” The £10million estimated future value is just one-tenth the cost of the works, which are also being funded by organisations including the Arts Council England, West of England Combined Authority and the National Lottery.
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Cllr Hucker, an accountant, said: “In effect the expenditure is being written off as it is being incurred, so effectively the building does not have any economic benefit to the council. When the auditors and the valuers wrote off the £39million as the correct treatment, they would have forecast the future income or net profit from the venue over a period of years and arrived at a present valuation of future cash flows.
“But because the council doesn’t receive a rent, the money would be received by BMT. So the asset would be worth £10million to BMT but it’s not worth anything to the council because it is not getting any economic benefits from it.
“That explains why it’s valued at nil in the council’s accounts. The logic suggests that when the council incurs future expenditure on the building, as long as it’s leased under this agreement, that would have to be written off as well. If the council was operating as though it was a business then it would be a financial disaster.
“There is a bigger picture than just a profit or loss, but your opinion on whether it is worth the investment depends on how much importance you place on the venue’s cultural value.” A council spokesperson said: “Our commitment to the modernisation and refurbishment of Bristol Beacon is an investment in the city’s economy that will deliver a world-class venue for generations to come.
“It goes well beyond the value of the bricks and mortar that make up the site and relates directly to our duty to stimulate economic growth that benefits the city. These benefits will be felt by the local night-time economy and the retail sector as footfall increases, jobs will be created and tourism will rise.
“Beyond these direct benefits to the city economy, there will be indirect economic benefits felt from the education, employment and training opportunities the Bristol Beacon will deliver and support. Estimates prior to the works began put the total economic impact of the new venue and its delivery at over £410million over a 20-year period, supporting nearly 400 jobs a year during that period.
“This return will ultimately dwarf the initial investment made in the physical building itself. To say the site has no value to the council or the city is incorrect. Even as the building work has progressed, the Bristol Beacon continues to benefit the local economy through its music education programmes and events.
“Our building partners, Willmott Dixon, are also supporting the local economy with over half of their spending on companies within 20 miles of the Beacon and just under half of the new jobs created have been filled by people coming from the Bristol region. The team are also delivering multiple training opportunities throughout their time on site which is providing important upskilling for local people.”
Structural problems uncovered by the renovation team included Elizabethan well shafts, hollow pillars propping up roofs, asbestos and hidden arches made structurally unsound during historic works that were just covered up and not recorded.
