Emergency £1m bailout for Coombe Abbey Hotel

One Coventry Councillor criticised the Labour-controlled Council for playing “a game of monopoly” with taxpayers money.

Coombe Abbey Hotel courtyard

Coombe Abbey Hotel is set to receive a rescue package from Coventry City Council.

It comes in the wake of the coronavirus pandemic, which has caused significant problems for the hospitality sector in Coventry and across the UK.

Councillors were informed that the decision to lend the hotel £1m had been rushed through by officers using ‘emergency powers’ – meaning they did not have a chance to debate it.

This is the third time in ten years taxpayers have provided the hotel with a bail out.

In 2013, acting as the hotel’s landlord, Coventry City Council agreed to take over a bank loan thought to be around £6.5m according to the Coventry Conservatives.

They then handed over a further £2m in October 2018, to be repaid over a ten-year period, as the owner of the business. Together with the cost of purchasing the hotel, it takes the total spent to around £20m.

Opposition Councillors from the Conservative Group are asking why the latest deal was done without a vote, or even a debate – and demanding to know why private investment has not been secured, and whether a future bail-out could be required.

Commenting on the news Cllr Gary Ridley, the Leader of the Council’s Conservative Group, said: “First Labour tried to buy the hotel in secret, now they’ve rushed through an emergency bailout on the quiet.

“Frankly, it’s been a dreadful deal for the people of Coventry and continues to drain money away from public services when they need it most.

“Next, they’ll have to cut services to balance the books and will probably try and blame the government. How much more will this Fawlty Towers fantasy cost the people of Coventry?”

Cllr Peter Male, who serves as Shadow Cabinet Member for Jobs and Regeneration, also criticised the Council for purchasing other businesses.

Commenting on the deal, he said: “This failing Labour administration has been nationalising businesses like there’s no tomorrow.

“They’ve exposed residents to the full effects of a global downturn and there’s no knowing how many more bailouts will be required.

“They should focus on providing services instead of taking over businesses they don’t know how to run. This all feels a bit like a game of monopoly but it’s the people of Coventry who’ll pick up the tab.”

Cllr George Duggins, Leader of Coventry City Council, defended the decision, commenting: “[Coombe Abbey] Hotel has taken the full government support of furlough schemes, HMRC support and business rate relief, but no revenue has been coming into the business, and action is needed to help make sure it is financially secure.

“The Council has, therefore, decided to provide a loan of up to £1m to Coombe Abbey Hotel. This loan is being made on commercial terms and will be repaid in full by the hotel. The loan will ensure that the business has the finances it needs to continue trading.”

“Coombe Abbey Hotel and the surrounding parkland is a much-loved part of our city and now a major part of our visitor attraction.

“Recently it has grown even more popular with the addition of the Go-Ape high trees adventure and we are confident that it has a bright future ahead in helping our city through its year as UK City of Culture and beyond.

“This loan payment will support the hotel through these unprecedented times and help both the business and our city as we emerge and continue our recovery.”