£1.5m losses at Sefton Hospitality Operations cast doubt on council-owned hospitality firm
Plus: Residents 'playing Russian Roulette' crossing the road
Hello and welcome to the 18th edition of The Southport Lead.
Today’s main story looks at the finances of Sefton Hospitality Operations Ltd, the company wholly owned by Sefton Council but run as a private business. The business was responsible for running The White House, next to the municipal golf course, but was unable to make a success of the venue.
It has had better fortunes running the Lake House in Waterloo but is still running at heavy losses. The £625k lost last year was worse than forecast and added to doubts over whether the council can turn a profit operating in an industry which is facing huge difficulties.
Also in today’s edition, the efforts of some Southport residents to convince the council to take action against parking problems which they fear could prove deadly - and why the authority faces challenges in dealing with it.
Council’s hospitality firm racks up £1.5m losses
Sefton Council bosses remain adamant that its privately owned hospitality firm will come good despite losing almost £1.5m in two years.
Another worse-than-forecast year saw Sefton Hospitality Operations Ltd (SHOL) lose £625,000 in 2023-24, following an £730,000 loss in 2023-24. Those dates do not cover the closure of the White House, the upmarket bistro operated by SHOL until a sudden closure last year.
Details of the company’s performance went before the authority’s Overview and Scrutiny Committee last night. A report prepared for that meeting insisted that despite challenges facing the hospitality sector, the company remains on track to deliver returns on the council’s original investment.
The latest updated business plan, which was prepared in January, forecasts another loss of £346,000 in 2024-25 before finally turning a profit the following year.
However, it also points out that the removal of an annual subsidy which was previously being paid towards Crosby Lake House would mean a saving of almost £1m by that point which are separate to
The White House closure
A major development carried out by SHOL since its inception was the refurbishment and re-opening of The White House, a building outside Southport’s municipal golf course which had been empty for more than a decade.
The building was saved from a decrepit state and reopened as a bar and brasserie in 2023 but struggled to attract the necessary footfall. It closed in “essential maintenance works in our kitchen” were cited as reasons for a temporary closure but never re-opened.
Last year, the building was repurposed again and rented to the owner of The Hart Space as an alternative location to the scene of the devastating attack which took place there in July.
In the latest reports, little reason is given for the closure, though the reasons for the higher-than-forecast losses include “White House performance not meeting aspirations”. Other factors affecting the business’s performance include high utility bills and market conditions.
The business statement explains: “In respect of the venues, the Lake House has continued to improve significantly in performance by every measure, but it has proven more challenging at the White House in Southport, where footfall and demand have not met aspirations. Southport’s hospitality sector is competitive, with new venues emerging in the last 12 months where significant (seven-figure) expenditure has been undertaken to deliver venues that offer the quality of customer and dining experience that makes their out-of-town centre location a “destination”.
“The White House refurbishment was funded at no cost to the Council, by the company via the shareholder loan, and that investment was not of the same scale to compete with such spend elsewhere. [...]The Council and the company do not propose to make multi-million pound investments in the White House at this time given uncertainty in many parts of the hospitality sector.
“Nevertheless, the Council has received, at no cost to itself, a restored asset that is now occupied by a rent-paying tenant.”
Next steps
Difficulties highlighted in the report contribute to a decision which means that, in the short term at least, SHOL will focus only on running The Lake House and not look to any other opportunities. The concession at Ainsdale beach had already been handed over to another operator last summer and no other immediate avenues are being pursued.
The business plan acknowledges that the hospitality sector faces “significant challenges” from inflation and the cost of living crisis among other factors.
As well as generating income for the council, SHOL was set up to provide secure and high quality job opportunities and the report presented to the committee last night explained these goals remain key to its operations. The council’s objective, it states, is for these opportunities to offer a real living wage or better, with no mandated zero-hour contracts.
Secrecy claims
For those attempting to scrutinise SHOL’s operations, a perceived lack of transparency has proved a source of frustration. A lack of openness is a frequent criticism of Sefton’s Labour administration by the Lib Dem group and SHOL has proved no different.
Cllr Leo Evans represents Cambridge Ward where the White House is based and was concerned about the original closure given the lack of information when it was originally announced as a temporary action.
Speaking to The Southport Lead, he said: “One of the biggest problems with it is we don’t really know because there’s such secrecy about it. Whenever we ask questions, we’re told it’s a private company. How are we supposed to do anything without being told anything?
“It’s absolutely infuriating and I know there’s council representatives on the board but that’s not accountability.”
Despite assurances from senior leaders, concerns remain over whether the council’s loan will eventually be repaid. “There’s absolutely a necessity to diversify in where your income is but there are times to say ‘we’re not the experts in this area so can we lease it out to someone who can make it work’.”
For Cllr Evans, the decision to market The White House as a high end option highlighted a lack of understanding of the market
“It’s hard to have faith in it when we don’t know anything,” he added. “It’s not like we’re being opened in and told ‘this is what we’re planning and this is what we’ll do’. It’s hard to have faith in SHOL when there’s no track record to say they can deliver.”
Confidence for the future
Despite those concerns, leaders remain defiant that SHOL will deliver on its targets - both financially and in terms of the wider impact. The committee report explains it continues to aim to begin repaying the council’s loan from 2026-27.
The business plan goes further in this confidence, explaining: “External factors continue to severely affect all businesses in the hospitality sector. The cost of living crisis has affected customer demand and revenues across the industry, and severe cost inflationary pressures (especially in energy costs and food costs) have impacted profitability as not all costs can be passed through to customers in such a competitive environment.
“Despite these economic pressures, the business is operating a venue in the Lake House asset that has been transformed in recent years, and that are now attracting strong footfall and good reputation. The operation has also enabled removal of the previous subsidy to the venue from the Council, which totals circa £1m across the period since inception of the company. Moreover, the Council has also had restored, at no cost, the White House in Southport, which is now occupied by a new rent-paying tenant.
“The Council remains committed to the long-term future of the business. Despite current economic challenges, there is confidence in the long-term future for the sector, for the venues, and in the opportunity for growth. Particularly, the Lake House is proving to be a well-established and highly-regarded venue in a beautiful Sefton location, and there is confidence in the long-term opportunity for this asset.”
“The business and the Council as shareholder remain wholly committed to the creation and maintenance of these prospects for local people, and to the role of the company and its venues as a key partner in the communities in which it operates.”
‘Russian Roulette’ road safety fears - but no answer yet
By Elliot Jessett
“Every time we use the road, it’s like a game of Russian Roulette.”
These are the words chosen by 80-year-old Anne Couzens to describe the parking and road safety issues around her home address. Ms Couzens is one of three elderly campaigners in Southport who are asking Sefton Council to intervene and introduce double yellow lines.
Sefton Council met on Monday, March 10 for it’s Licensing and Regulatory Committee to assess a number of reports – including the details of a petition requesting waiting restrictions at a residential junction in Southport.
The 108-signature petition was presented by three local residents and included a proposal for waiting restrictions in the form of double yellow lines at the junction of Ericson Drive and Linaker Street. The document included a series of photographs highlighting the difficulties faced by local residents – including one where a walker is blocked from accessing the pavement.
Carol Ellis presented the details of the petition to the committee, she said: “I have lived here for 20 years, since houses were built. In 2007 I was involved in a car accident and driving out of the close because I couldn’t see the oncoming car, as there were many obstruction vehicles to my right.
“Several other residents also had car accidents [… people] are now parking their cars on the pavement in the access to Ericsson drive, which causes a very serious hazard.
Adding: “A lot of our residents rely on delivery of medications and food, etc. And these deliveries are not always made for some poor access. On many occasions, emergency or delivery vehicles have been unable to access the close. This is both dangerous and very costly.”
These sentiments were shared by Ms Ellis fellow campaigners who also attended the meeting. Ann Couzens has severe mobility problems and is reliant on a walker to get about. Ann faces particular difficulty when trying to get past large vehicles blocking the pavement and is forced into negotiating a high curb, struggle down and pass by on the road.
Ms Couzens said: “Every time we use the road, it’s like a game of Russian Roulette. It’s very frightening.
There’s no visibility when trying to exit the road with on coming traffic and with the cars parked on the other side accessing our entry risk us banging into them.
“Disabled people as well as the prams cannot walk on the only pavement we have due to the cars parked half on the pavement and road.
“It’s not just crossing the road it’s the fear exiting turning right into traffic that we can not see is so frightening as on a daily basis you have to take a leap of faith that you won’t get your car banged.”
Elena Luke, 68, is the third petitioner, she added: “We are are simply scared every time we drive in and out of Ericson Drive, scared to be hit by a moving vehicle, and scared to hit another car, or a person, or a cyclist.”
The council report presented to the committee outlined its reasons against the petitioner’s proposals, stating that any yellow lines at the junction would remove already limited residential on street parking spaces in Linaker Street and directly impact individuals that have not participated in this petition.
Highways Safety team leader, John Toker was sympathetic to the petitioners case but recommended the committee do not uphold the petition request, he said: “If we had funding [we would be] able to address every concern that we receive.” “Adding: “We can’t do that.
“We have had a 70% reduction in our staffing levels in my team, and we’ve had over a 75% reduction in the budget that we receive. So it’s really, really difficult for us to try and help everyone when we can’t […] and we have to prioritise the funding that we receive.”
No decision was reached on the petitioners’ proposal and the committee referred the case back to the cabinet member for further consideration.
News in headlines
Bistrot Pierre closes Southport site as administrators called in to save business (Business Desk)
Merseyrail honoured as UK’s best performing regional railway for seventh year in a row (Stand Up For Southport)
Car targeted in suspected arson attack at garage (Liverpool Echo)
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Jamie & The Southport Lead team