Councillors have criticised the ‘lousy’ scrutiny of a decision to grant a £9m loan to Scarborough's Alpamare water park’s developer more than 10 years ago.
An auditor’s investigation into the £9m loan that was granted by the now-defunct Scarborough Borough Council to Benchmark Leisure Ltd, as part of a project to build Scarborough’s Alpamare water park, has been welcomed by some of the councillors involved in the decision.
Alison Hume, the MP for Scarborough and Whitby, said the report
“does not make very pleasant reading”.
Ten years after the loan was granted behind closed doors, the developer went into administration in October 2023, leading North Yorkshire Council to take possession of the site and write off the £7.8m that remained unpaid.
The Local Democracy Reporting Service (LDRS), has approached all the councillors who were elected members at the time and are now currently serving on North Yorkshire Council.
Conservative councillors David Chance and Derek Bastiman were the only members who did not respond to a request for comment. Coun Bastiman was deputy leader of Scarborough Borough Council (SBC) when the loan was approved in 2013.
Coun Michelle Donohue-Moncrieff, now an Independent and formerly a Conservative, said:
“I was part of the SBC cabinet decision to terminate the agreement with Benchmark. I believe the report demonstrates how important it was.”
While she welcomed the report, Coun Donohue-Moncrieff said there were
“serious questions as to the effectiveness of the council’s internal audit over that period and why there wasn’t deeper scrutiny into the operation of the agreements with Benchmark”.
In its report, the council’s auditor concluded that the decision to grant a loan to Benchmark Leisure Ltd was “undoubtedly risky”, and it details how some councillors said they felt pressured to approve the loan despite concerns about the commercial viability of the £14m alpine-themed attraction.
Council officers also said they were placed “under considerable pressure” to agree to proposals that had been presented by senior councillors or Benchmark.
Speaking to the LDRS, Coun Subash Sharma (Lab), said:
“I think they’re emphasising the lessons learned and how you can’t change the past, but one of the things that stands out in my mind is the fact that we had lousy overview and scrutiny, in fact it was non-existent, and what took place was appalling.
“I remember this while I was a councillor between 2011 and 2015, so I have a vivid recollection of what took place.”
He added:
“I remember going to overview and scrutiny meetings regarding this, and the sale of the freehold that was coming up, and it was chaotic and abysmal, and one of the reasons for it was that all the chairs of scrutiny were chosen by and were part of the ruling group.”
“They marked their own homework, and that’s never a good idea.”
Coun Janet Jefferson (Independent), said that when the proposal for the £9m loan had come up in 2013, she had questioned whether it represented “value for money for the borough’s ratepayers who, after all, were going to pay for this loan”.
She added:
“I felt there were still a lot of unanswered questions and did not want the council to make a rushed decision that day, so subsequently, I voted against the proposal.”
Coun Eric Broadbent (Lab) said he was
“pleased that the report highlighted the need for better scrutiny to minimise any risk of spending public monies and lessons must be learnt from the report.
“The water park is now once again attracting tourists and residents, and putting Scarborough on the map, and I wish it every success.”
Veritau’s auditors said that while officers’ reports contained “sufficient information”, there was a lack of clarity about key aspects of the proposed agreement with Benchmark.
Officers also “failed to provide a recommendation to the full council meeting based on their professional knowledge and assessment of the risks”.
Alison Hume, the MP for Scarborough and Whitby, told the LDRS:
“I find it hard to believe that council officers never provided a recommendation to full council setting out the risks and that the decision was made by a smaller group.
“Clearly, some councillors had concerns about the terms of the agreement, including that it was more favourable to Benchmark than SBC.
“There are many lessons to be learned from this report. One is that potential risks and rewards must be properly articulated before public money is invested on your behalf.”
The MP, who was elected in 2024, added:
“At the end of the day, £7.9m of taxpayers’ money was lost, money which could have paid for essential services or improvements in Scarborough.
“This report must be used to shape all future projects and ensure the same mistakes are not repeated.”
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