THE COSTLY £1.2m purchase by East Hampshire District Council of a loss-making hotel – which it has now agreed to sell without any questions being asked – is to now be reviewed by the authority’s watchdog committee.
The council bought the former Travelodge Hotel on the A3 services at Liphook in November 2014 as a money-making investment. But since early in 2015 it has remained empty and been vandalised.
The Overview and Scrutiny Committee is chaired by Independent councillor Jamie Matthews and his vice-chair is the council’s Liberal Democrat group leader Steve Hunt.
Cllr Matthews said: “I have requested the report on the sale is called in because I consider, in the absence of the portfolio holder or any questions, it received insufficient scrutiny at the cabinet meeting.”
The council plans to ask £1.2m for the building.
Cllr Hunt said: “I am pleased these issues will now come before the committee, which had not been given the opportunity to pre-scrutinise the matter.”
It is estimated the two-storey building, opposite the successful Starbucks cafe which is also owned by the council, has cost – or lost – the authority at least £250,000 in holding costs, lost business rates income and vandalism.
The council has refused to say how much money has been lost in ‘rental’ income, claiming if the figure were made public it could jeopardise any future purchase – although the building isn’t officially for sale yet.
On Thursday, October 17, the council’s governing cabinet agreed the run-down hotel should be sold. Members of the Tory cabinet were briefed behind closed doors about the proposed sale before the meeting.
But when it came to discussing the matter in front of the press and public, only one question was asked – and that wasn’t answered publicly.
Cllr Hunt said: “Cabinet was presented with a damning report on the management of the investment property.
“Despite this, not a single member asked any questions and all voted to proceed with the disposal of the site without a discussion.
“The only question raised was by me, when I was allowed to ask how the property has been safeguarded since it has been in the council’s ownership.
“Unfortunately the investment property portfolio holder was not present, so I now await a written answer.
“This is no way to handle this disastrous investment.“
The sale decision by the cabinet still has to be rubber-stamped by the council at its full next meeting before it can be acted on. Straight after the meeting, Cllr Hunt wrote to Cllr Matthews asking for the sale decision to be called in for scrutiny.
And Cllr Hunt claims the Conservative-majority council is slipping back into old ways.
He said: “It was back to the old days for the cabinet, with the meeting considering matters amounting to millions of pounds lasting a total of 17 minutes, and no cabinet members raising questions regarding the Liphook services issues.
“I hope the cabinet will reflect upon this matter and consider investments that would bring social as well as financial benefit such as homes for truly affordable rent.”
In a statement last week the council said buying and selling properties was all part of putting together an investment property portfolio.
The statement added: “We have not been able to find a financially-viable solution for the plot (hotel) and it makes sense to sell it. Throughout our possession of the site we have enjoyed a regular rental income from the successful Starbucks cafe.”