London Pleasure Gardens - A Local Council Scandal?

Photo: Diamond Geezer

Since I started blogging regularly, I've also started receive e-mails from people with stories they really want told. On Friday morning, I received one saying that the London Pleasure Gardens (LPG) at the Royal Docks near the ExCel Centre, opened to fanfare only five weeks ago with a loan of £3 million from Newham council, had gone into administration. This is a project that, in July, the council had lauded as an example of its new 'resilience' philosophy, an exciting new venture that “helps to build the economic resilience of the area by attracting people to a new destination”. Throughout Friday it was difficult to find direct confirmation of whether LPG had gone bust, despite a tweet I sent out, but by the end of the day, an council statement had finally confirmed:

"The decision by London Pleasure Gardens Limited to enter into voluntary administration is regrettable but understandable. It is disappointing that the anticipated visitor numbers and revenue from recent planned events have not materialised”.

The loan to London Pleasure Gardens Limited and its three directors (John O'Sullivan, Garfield Hackett and Robin Collings) was agreed by the Mayor and his Cabinet, rather than the full council, who nodded through the Cabinet's plans during the 19 minutes it took to hold a twenty-item meeting on 27 February. A report on what had been described as “an unrivalled partnership between enterprise, culture and public sectors” was discussed by the Cabinet in January [PDF], in which much was made of the proposal's ability to “substantially persist continued momentum” in ensuring that that “the Games period euphoria does not fade away in Newham”. The report added that “the project is in line with the Council's vision for the regeneration of the Royals and indeed it is seen as a vital catalyst in making this vision a reality”. There was a promise of new employment - 300 mainly part time sessional jobs for local people over the life of the project, although only the equivalent of 30/40 full time jobs. The council's Finance Officer notes that “the proposal is not considered to be high risk.”

This "vital catalyst" turned out to be some low risk. Its failure is being blamed in part on events' organisers deciding to stay away, perhaps understandably given the débâcle over overcrowding at the Bloc Weekend event on 6 July. However, in a BBC report, Newham council has also tried to pass the rest of the blame onto the London Olympics organisers LOCOG for restricting visitors numbers. They in turn have hit back at Newham council and LPG, saying:

“Sensible business planning to allow the DLR to cope with a large influx of passengers during the Olympic events at the Excel Centre meant that temporary limitations on promoting the Pleasure Gardens at Games time were agreed with the venue at the outset and would have been factored into their business model.”

After I tweeted out a request for information on Friday, I started to receive more stories from people who had worked at LPG. They told of staff, mainly local young people, who were in tears when they heard the news that the company had gone bust. Many had not been paid. One 20-year old girl had been looking for work without success for four years before starting at LPG and was supporting her entire family on her wages from a vendor at the venue. Former staff also complained about a complete lack of communication from LPG. Publicly, some traders have come forward with complaints about promises that were made to them by the LPG management and how they felt angry and cheated.

What this looks a lot like is a full-blown local authority scandal, with wildly over-optimistic financial projections by the LPG management, who seem to have also been far from ready when the venue actually opened. Their rather high-risk business case (dependent in part of the whims of LOCOG's decision-making) was aided by the fact that Newham's Mayor had clearly been bowled over by another ill-conceived idea. The loan was almost inevitable, with few doubts raised by officers whose due-diligence was either incredibly weak or driven with half an eye on the proposal being a mayoral pet-project. As for LOCOG, it is clear from its ruthlessness that the Games and nothing but the Games - most certainly not the ambitions of a minor local elected Mayor or any impact on local people - was their only consideration.

The council insists it will recoup the £3 million of local taxpayers moneyi it has loaned, which it must at a time when it is busy making significant cuts to services. But what about the human costs? As yet, it hasn't said anything about what happens to the local people who worked at LPG, overwhelmingly poor and owed money that is due to them. Will they find themselves at the bottom of the list as the administrators from Deloitte pick over what is left from the ruins of the company?

UPDATES

I saw this today (6 August):

It looks like the unpaid former staff of London Pleasure Gardens are going to hold a protest tomorrow. @pleasuregardens PRESS n MEDIA ALERT!
— LaraMascaraNYC/UK (@LaraMascaraNYC) August 6, 2012

See also this BBC London report on 7 August (from the Stop City Airport Masterplan website)

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