The figures were closely scrutinized by the external auditor of the Deloitte board as part of the town hall’s annual audit of accounts from March 2019 to March 2020.
As of March 31, 2020, the board had granted loans totaling £ 78.3million to a number of its subsidiaries and private companies, and had offered six-month repayment leave between April and September of Last year.
Presenting a 194-page report to the board’s audit committee for approval, Deloitte warned: “Due to the impact of Covid-19 on a wide range of businesses within the economy, we believe it there is a risk that some of these entities will not be able to repay the loans granted by the board.
Deloitte’s investigations included inspecting the financial history of a sample of those companies that have made loans, verifying repayments resumed after the payment holiday, and assessing the value of assets held as collateral.
The loans under review include payments to Create Developments (Blackpool) Ltd, Coolsilk and Ocean Boulevard, all of which are involved in hotel developments in the city.
Deloitte says that in each of these cases, it has engaged “internal valuation specialists to review the valuation of assets held as collateral for loans and await their final report.”
The auditor also took issue with the council’s value of £ 9.8million attributed to Blackpool Transport, and said its experts estimated the value to be between £ 5.8million and £ 9.8million. pound sterling.
But that only mattered if the board intended to sell the business.
The members of the audit committee approved the accounts and the report of the external auditor, subject to the completion of certain additional work still to be carried out, but the committee was assured that no material changes were expected.
Councilors were also assured that the external review of the town hall accounts had shown the authority to be financially viable with its assets valued at a net worth of around a quarter of a billion pounds.
Audit Committee Chairman Councilor Paul Galley thanked the officers, advisers and Deloitte for their work on the accounts which he said meant “I can comfortably tell the people of the city that we are a sustainable organization. “.
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