UNDER-fire councillors backed the controversial plan to bail out the Red Lion Quarter – and admitted that the food court is an “embarrassment” and a “white elephant”.
South Holland District Council’s cabinet agreed on Tuesday to clear the debts of the Community Interest Company that ran the £6.5million Spalding centre and end its occupancy of the building.
A “full and frank” inquiry will be launched into what went wrong and the food court will close for the time being.
However, leader Gary Porter was adamant that the council will not spend £300,000-£400,000 on the bail out – figures outlined by officers as the amount needed to clear the debts, write off a council loan and keep the centre running until they can find someone else to run it.
He defended the rest of the project, saying it has brought a new college and business units into the town centre for just £200,000 of district cash.
But he delivered a damning verdict on the failing food court. Coun Porter said: “The building and the project are not a white elephant. The space occupied by a retail unit is a white elephant.
“We should be pleased that our young people have post-16 eduction back in Spalding, rather than having to go on the bus to Boston. Do not confuse the failure – and it is a failure – of the shop with a failure of the project.
“The shop is a massive embarrassment to the council. It was never supposed to be a retail unit that sells things that aren’t ‘value added’.
“We didn’t need to open up a supermarket there, the supermarkets are pretty good at being supermarkets themselves – that wasn’t what this business was for.”
The meeting attracted a full public gallery of angry traders and residents, who were frustrated to hear that the council was unable to answer all of the questions raised by taxpayer Gerry Hutchinson and Spalding Chamber of Commerce president Jason Rooke.
The centre was set up to be managed by a separate Community Interest Company (CIC) but that is a “wholly owned subsidiary of the council” and the authority also owns the building.
The council says it only held 20 per cent of the shares in the CIC and will look at which debts it has a “moral” responsibility to pay, ensuring the £20,000 owed to local contractors is paid. It still wants to recover its £120,000 loan to the CIC if the business becomes a success and will not write it off.
Coun Roger Gambba-Jones said: “There’s always the chance there’s a fairy godmother who will take it over and say “here’s your money back”. Let’s at least keep the possibility open.
“By writing it off, if it does go into liquidation and then we find some money under the mattress we would have no claim to it.”
The cabinet agreed to recommend the bail out for the full council to decide upon next Wednesday. Its recommendations include shutting the food court.
Members ditched the aspiration to re-open that by March – leaving it open to a new management team to decide what it does with the space.
Coun Bryan Alcock is expected to head the task group looking into the Red Lion Quarter and council chief executive Terry Huggins has promised all the necessary resources.