Government gave Sefton £392k grant to refurbish suites

Sefton Hotel, Douglas

Sefton Hotel, Douglas

Have your say

Details of further government support to the Sefton Group have emerged.

New Minister for Economic Development Laurence Skelly has confirmed that £391,944 in grant assistance was paid to the Sefton Group in 2009 towards the refurbishment of nine suites at the Sefton Hotel.

This grant pre-dates a loan of £450,000 in 2012, a further loan of £1.3m the following year and the £3.2m purchase and subsequent leaseback arrangement for the Middlemarch site that were provided as part of a bail-out deal to keep the company afloat.

Revelations that an independent legal opinion had judged the two loans were ‘more likely than not ultra vires - ie not lawful’ led to the resignation of then DED Minister John Shimmin.

Chief Minister Allan Bell announced in Tynwald last week that steps had been taken to regularise the loans and put them back on a firm legal footing.

Now in a written reply to a question from Liberal Vannin leader Kate Beecroft, Mr Skelly confirmed that government had previously given support to the Sefton Group in December 2009 under the under the Visitor Facility Improvement Scheme.

The scheme was operated by the then Department of Tourism and Leisure and was available to all eligible tourist premises.

He said: ‘The offer was made in April 2008 and was 25 per cent of the agreed cost of the works.

‘The major conditions relating to the assistance and its repayment are, firstly, that the property must be registered as tourist accommodation.

‘Secondly, if the property is sold or ceases to be used for tourist purposes for any continuous period of 12 months within the period of 10 years from the date of payment of the grant then the amount is repayable.

‘Interest would be charged on this repayable amount at the base rate plus 3 per cent. Between year 10 and year 15 the balance repayable reduces annually by 20 per cent.

‘The assistance provided for the creation of nine suites. My department is aware that the Sefton Group is considering selling a small number of those.

‘However as I have explained the sale of any of the suites will trigger a repayment of a ninth of the assistance plus related interest subject to the remaining suites being registered and available for use as visitor accommodation.’

In his statement to Tynwald, Mr Bell said he did not condone the situation that had arisen over he loans and steps were being taken to understand how it occurred and to ensure lessons have been learned.

The Sefton Group last month announced that it had turned around its financial fortunes and posted a profit of £10.3m, with retiring chairman Sir Miles Walker praising the government’s ‘courage’ for supporting the company during a difficult period.

Back to the top of the page