Author Michael Swadling
Most Croydon residents will have a memory of the Croydon Park Hotel, for me some its of work dos, a venue for giving blood and some slightly clandestine visits to the hotel bar conveniently situated in central Croydon but somewhere you’d be unlikely to bump into anyone you didn’t want to see. Pictures of the hotel still adorn travel sites, a reminder of what a great asset to the town the hotel was. Of course that was before lockdown and the benevolent hand of Croydon Council.
News came this week that the hotel purchased by the council in 2018 has been sold at a loss of some £5 million. Ironically a loss of this magnitude is pretty small fry compared to the disaster that Croydon Council has been in recent years. The purchase was of course hailed as a great success at the time, the council was borrowing cheap money to make a strategic investment and return revenue to its overall budget. Of course things didn’t workout quite as planned, to quote Croydon council’s internal auditors:
“The investments in The Colonnades and Croydon Park Hotel were not grounded in a sufficient understanding of the retail and leisure market and have again illustrated that the Council’s strategy to invest its way out of financial challenge rather than pay attention to controlling expenditure on core services was inherently flawed.”
It is easy to be clever after the event, who could have known at the time the things would go so badly wrong? Well whilst no one likes a ‘told you so’, we, err, ‘told you so’. Writing about the hotel purchase together with the purchase of the Colonnade shopping centre in March 2019 we were able to point out the council has no expertise in running commercial property, we calculated the investments only needed a 3% downturn in revenue for taxpayers to be burdened with the costs of servicing the debts funding these projects. Indeed the council has now confirmed the hotel itself had a running cost of £610,000 a year without even being used as a hotel.
Who knows what would have happened without the pandemic but this was foreseeable. The council had already undertaken an upgrade to the famous Surrey Street Market at a cost of 1.1 million resulting in a lost of both casual and permanent traders, costing over £91,000 per trader lost.
I’m reminded, as is often the case with our local authority of Ronald Regan’s famous line that “The nine most terrifying words in the English language are, “I’m from the Government and I’m here to help”.
If any good comes from this aside from removing the ongoing running costs from the council, is that it removes the conflict of interest, where the council gives planning permission for, and permits licensing of businesses it’s in competition with. Let’s hope Croydon Council will now stay out of commerce, and instead focus on just doing its basic job right.