Jacob Williams
Tuesday 6th August, 2013

A costly ‘investment’

A costly ‘investment’

A recent disclosure made by Pembrokeshire County Council following a Freedom of Information request submitted by a jacobwilliams.com regular, has revealed that the current value of the council’s “investment” in the Bluestone holiday resort would hardly cover the cost of a pint at its entertainment complex.

David Edwards, who is a previous county councillor at the authority, requested the following information:

“The value contained in the last annual accounts for the Council’s investment and loans in Bluestone’s Holdings and/or any associated companies.”

The response he received was:

“There is a £3 value in the balance sheet for the Council’s investment in the above company.”

The council first dabbled with public cash on Bluestone in 2002, when the cabinet, at its October meeting, decided to make a million pound “loan” to help get the development off the ground.

In 2006 the council also carried out and funded major road-works and created a new roundabout for access into the resort. The project cost in the region of £750,000, and it is understood that the council and Bluestone had a gentleman’s agreement for the cost of the road-works to be paid back to the council when Bluestone’s financial situation improved.

By 2009, Bluestone had failed to keep up with repayments on the original “loan” – it is not known how much, if any money has been repaid on either loan, but in November of the same year, the cabinet agreed to convert the £1m cash loan agreed in 2002, into 3% of company shares in lieu of repayment.

It seems hard to believe that our £1.75m worth of input, or £1m if you don’t wish to factor the road-works into the equation, could be worth just three pounds today.

The value given to Mr. Edwards in the disclosure from his request might not be the accurate value, it is almost certainly a notional value of the firm which underwent a pre-pack administration buy-out in 2009 at around the same time the council converted its loan into shares. At the time, the Western Mail reckoned that investments amounting to some £12m were written off.

These pre-pack buyouts are sometimes known as ‘£100 companies,’ of which the council’s nominal share would, of course, be £3 for its 3%.

The accuracy of the £3 figure – and whether this valuation is too high or too low, will be the matter of speculation for some time to come, I’m sure!

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  • Keanjo

    Who is responsible for this disastrous waste of our money? What advice did the Council receive from the Chief Executive and the Director of Finance beforehand? Who is going to accept responsibility and resign? The people of Pembrokeshire have a right to know. Answers must be given.

  • Ianto

    Does anyone have details of the latest restructure? One prepack is unfortunate, two truly unlucky, what odds on three?

  • Hi Ianto, I’m not aware that Bluestone has undergone a second ‘pre-pack,’ unless you know different?!

  • I think Ianto is echoing Oscar Wilde’s famous saying:

    To lose one parent may be regarded as a misfortune;
    to lose both looks like carelessness.

    To undergo one prepack administration is a misfortune;
    to undergo two looks like carelessness.

  • Ianto

    As you say Cllr Stoddart. I have assumed, perhaps incorrectly, that the latest restructure will be a prepack, with further debt write off by the lenders, including our very own Finance Wales.

    It would be very instructive to see the total public sector loss on his project, including uncollected business rates and any other inputs from PCC.

    There was a time when PCC were handing out chunky advertising grants to local businesses.

  • Paul Absalom

    When you realise the leader of our council cannot read (4 years instead of 3 months) it is not hard to realise he probably failed his maths as well. £1,000,000 + £750,000 = £3? Yeah, that’s about right!

  • Well Paul,

    Making good use of public money doesn’t seem to be a strong point of this largely unchanged council from the time of the first loan.

    The original £1m ‘investment’ was rubber stamped by the cabinet at its October 2002 meeting, on the proviso that Bluestone made its swimming pool, known as the ‘Blue Lagoon’ open to the general public.

    Looking back, I do wonder whether it would have been a better decision for the cabinet to have agreed to sink a million pound coins into the real Blue Lagoon, in Abereiddy.

    I’m sure that many more than three of them would still be recoverable from the bottom of the deep slate quarry today.

  • Quill

    Don’t be stupid, if the cabinet had done that there wouldn’t be a single penny left at the bottom of the blue lagoon. The decision would probably have been taken in secret session…

    …and those in the know would have wasted no time in wiping down their greasy snouts, slipping underwater breathing masks over them and taken up deep sea scuba diving as a hobby!

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