Bexhill's council-run Colonnade Restaurant lost Â£56,000 in first ten weeks
A review into the Colonnade Restaurant project should be held after reports it lost more than Â£56,000 in its first ten weeks of trading, Lib Dem councillors have argued.
Kathryn Field and Kevin Dixon publicly have urged for Rother District Council to hold ‘a detailed review’ into the refurbishment and management of the seafront restaurant.
The calls come after the publication of a report – to be discussed by the council’s cabinet next Monday (November 5) – which says the restaurant had made a trading loss of £56,785 between July 21 and the end of September.
While the council says it expects to recover some of this loss from the incoming contractor, the report says the final net loss will fall to the council to meet. A final loss figure is expected to be made public at a later date.
In an open letter, Cllrs Field and Dixon said: “While a truly iconic destination restaurant would undoubtedly have been an asset to Bexhill there was never any realistic prospect of this happening under council control.
“The Liberal Democrats on Rother District Council have been challenging this ill-judged project ever since no experienced restaurateur came forward.
“All challenges to the Tory administration have been unceremoniously brushed aside, and when we enquired before the restaurant opened about how any potential losses would be funded we were told ‘it would not be appropriate that the public purse pick up any trading losses’, without any attempt to explain who would do so.
“We believe that the management of this project must be the subject of close scrutiny and this is why we have exercised the right of all councillors and called for a detailed review of this project. When this happens the public will be able to attend.”
However Rother District Council has defended the project, arguing that the project will prove profitable in the long term.
A council spokesman said: “The extensive refit carried out earlier this year means we now have a modern, high quality restaurant and are in the negotiations with a tenant who will be moving in to take it over.
“Factors outside our control meant that the menu we were able to offer at the Colonnade during the summer was far less extensive than we’d intended, and therefore income was lower than expected.
“The restaurant, and the four retail units in the building, will generate a long-term revenue stream for the council which will ultimately far outweigh any losses accrued during this summer.
“We’re confident that once the new operator is in place the restaurant will go from strength to strength and provide a real asset for residents and visitors to Bexhill in a prime seafront location.
“All councillors have the right to call-in decisions of cabinet which may then be considered at a public meeting of the Overview and Scrutiny Committee.”
According to the full report, the restaurant had a trading income of £33,753 but an expenditure of more than £90,000. Just over £21,000 of this expenditure went to staff costs, despite a decision to review staffing levels soon after the the restaurant opened.
The decision to cut staff was made after problems arose around the building’s gas supply, which the council says was beyond its control.
According to the report, the problem was due to Southern Gas Networks (SGN) and Laser, the council’s contracted energy management company, being unable to find any records of the gaspipe leading to the business.
After a series of delays the gas supply and gas meter was finally connected on October 9, the report said. The council says it has written to the Energy Ombudsman about the delays and is taking legal advice to seek avenues of redress.
The report also puts the council’s total cost of refurbishing the restaurant at just over £288,000 – around £28,000 more than the pre-tender estimates. This figure, however, does not include more than £62,000 worth of furniture and equipment, which the council expects to sell on to the incoming operator.
At a meeting on October 1, Rother cabinet members agreed to offer a ‘rent-free winter’ on the site in an effort to attract bidders for a long-term lease. Councillors were also told that three bidders had already approached the council at the same meeting.