Council under pressure over £1.8m Bluestone loss
Bruce Sinclair, local democracy reporter
A call for the public to see details of the secret Bluestone shares decision – which lost Pembrokeshire taxpayers £1.8m – has been made to the county council.
The loss, following behind-closed-doors decisions made more than a decade ago by the council’s previous administration, was made public at the May 11 meeting of Pembrokeshire County Council by Cabinet Member for Corporate Finance Cllr Alec Cormack.
Members also heard this secretive decision had led to the loss of a guarantee that members of the public, rather than just Bluestone guests, would be able to access the Blue Lagoon waterpark.
Cllr Cormack made the shocking revelation in response to a submitted question by Councillor Alan Dennison.
Cllr Dennison had asked: “Given the council’s previous investment in Bluestone of a £1.9 million secured loan, now converted into shares, can the Cabinet member advise what return on investment per annum has been received over the last five years in share dividends or any other form of income?”
The £110m Bluestone eco-resort, near Narberth, opened in August 2008.
Early on, the county council invested two loans, adding to a total approaching £1.9m, the lion’s share in respect of Waterworld – now called the Blue Lagoon – with the key justification being there would be year-round public access for the public.
In November 2009, the council’s Cabinet – under the-then council leader Cllr Jamie Adams – made a behind-closed-doors decision, removing the loans and the guarantees, and taking up the shares.
Details of the discussions and background to the decision made at that meeting are still not available to the public.
At last week’s meeting, Cllr Cormack said the November 2009 Cabinet report was confidential, so he couldn’t say what was in it, but said he could tell members “what was not in it,” saying there was no clear justification for taking up the shares or for giving up the legal charge guaranteeing the loans and no evaluation of the pros and cons, or evaluation of a fair share price.
Members heard the value of the shares amounted to – at best – under £70,000, and had paid out £19,000 in dividends over the last five years, with the highest dividend in a single year amounting to £5,250, in 2019-20.
“The council’s lost £1.8m of the £1.9m – roughly 95 per cent – of the IPPG investment and the public’s lost the guaranteed right to use the Bluestone pool,” said Cllr Cormack.
Minutes of the November 30, 2009 meeting, following a decision to go into a private and confidential session excluding the public, merely state: “That the equity share option in Bluestone Resorts Ltd be taken up and that the Director of Finance and Leisure, in consultation with the Head of Legal and Committee Services, be authorised to take all necessary legal actions for the council in relation to the restructuring of the company.”
It gave the reason for the decision as: “To support economic and leisure development in the county.”
The local Democracy Reporting Service has now submitted a Freedom of Information Act request to Pembrokeshire County Council, asking for the release of the full minutes and documents relating to the discussion on the council’s take-up of the equity share option in Bluestone Resorts Ltd.”
A council response is expected by Mid June.
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When you get a response make sure to account for the rates and council tax that the company has paid since 2008/9. They haven’t “lost” £1.8M entirely. Bluestone were paying £120K to £170K back then.