Colchester City Council underwrote the £70m cost of the cinema and restaurant complex at its Northern Gateway Leisure Park.  Unfortunately the intended anchor tenant, Cineworld, did not take up its lease. While the Council was seeking another cinema operator, business rates had to be to payed by the Council, and some of the restaurants are struggling to pay their rent without the footfall created by an active cinema.  The Council has already set aside £4m to cover the resulting loss of income, money which could have been spent on front-line services for residents. And there may be further losses to come.

But critically, the £70m debt has been hidden away.  It doesn’t appear on the Council’s balance sheet and for three years it wasn’t even disclosed as a note.  It is concealed behind an off-balance sheet income strip lease which leaves the commercial risks and rewards squarely in the Council’s court.  The lease payments made by the Council increase with inflation for 35 years, whether or not the rent received from the commercial tenants increases in line – a significant long-term risk which may not be fully understood even now.

The Conservative group believes that the Council is ill-equipped to deal with such complex financial structures.  It shouldn’t speculate with resident’s money and hide the risks off balance sheet.  Instead it should remain focussed on encouraging development through the planning system and delivering high quality services to residents. 

Conservatives pledge never to deceive the people of Colchester over the extent of the Council's borrowing. We will always disclose the true extent of Council Borrowing, so that Council-Tax payers know where they stand.

 2025-08-04

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