Liverpool Council is owed millions of pounds accrued over a five year period by the firm that operates the M&S Bank Arena.
As the local authority moves ever closer to having to fill a £73m blackhole to set a legal and balanced budget ahead of the next financial year, it has been revealed The ACC Liverpool Group, which operates the event complex on the King’s Dock including the arena, is in debt worth millions of pounds to the council. A repayment plan to recover the finances is yet to be finalised as the group confirms its business plan for the next 12 months.
Liverpool Council is owed around £7.1m by the group for what it described in a statement as historical debt relating to property transactions between 2015 and March 2020. Of that, £2.6m is in year trading sums.
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A cabinet report in December revealed the council had put aside £2.5m in reserves to cover against non-payment of outstanding lease rentals. Addressing a meeting of the council’s finance and resources select committee last week, Ian Duncan, Liverpool Council’s interim finance chief, said it would be “irresponsible” for the council to “ignore that risk.”
Mr Duncan said he would hope it wasn’t called upon but the reserves “were something you would expect to see in the event of a potential default.” The finance officer added the payment plan was an issue the local authority was discussing with ACC Liverpool and arranging a payment plan for the recovery of debts but this has yet to be signed off.
He said: “We’ve got to have confidence this will be delivered” and payment was expected over the next year. In that meeting, chair Cllr Barry Kushner said: “Anyone who has missed one council tax payment would be annoyed by this. It equates to all the cuts around anti-poverty measures.”
Speaking to the ECHO after the meeting, Cllr Kushner said: “I was shocked and appalled by it really. The overall cost is £9m when you include the reserves.
“To find this out at the last minute, when we’re having to try and save money, there’s a financial crisis, and we may have to cut vital services, was shocking.” In a statement, Faye Dyer, managing director of The ACC Liverpool Group, said the balance due “comprises £2.6m of in year trading sums, which will be paid prior to the financial year end, alongside £4.5m of historical debt. "
She said: “The debt relates to property transactions from 2015 to March 2020, following the expansion of the campus and facilitating a period in which the group successfully grew its market share and presence. The benefits of this support are being recouped over the longer period of investment.
"We have set out a number of options for the council to recover this historical debt in our recent business plan and look forward to finalising this, alongside signing new leases, later this year. Our trading results continue to recover after a successful return to full capacity live events following the pandemic and our financial performance now facilitates the transfer of further property related cost obligations to ourselves, reducing future expenditure for Liverpool Council.”
Ms Dyer added the group was looking forward to continuing its “positive relationship with Liverpool Council.” A Liverpool Council spokesperson added: “The ACC Liverpool Group has set out a number of options to recover the sums in its business plan.
“In line with our risk-based approach to setting reserves, we have prudently set aside a proportion of the money owed until it is paid. The repayment plan forms part of wider changes to Liverpool Council’s governance and oversight of the ACC Liverpool Group, following a recent review.
“For example, responsibility for the cost of repairs and maintenance of the complex is being transferred to the organisation as part of a new lease, to reduce the financial burden on the council."
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