Leicester City Council has written off hundreds of thousands of pounds in loans following the collapse of the city’s Haymarket Theatre.
The theatre owed more than £900,000 to ticketholders, suppliers and other businesses when it went bust in the first lockdown.
That included £300,000 owed to around 3,500 theatre-goers in amounts ranging from £6 up to more than £600.
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Leicester City Council had spent some £3.6 million revamping the theatre so that it could reopen it in 2018 after sitting unused and .
A private consortium was created to run it for live music, shows, conferences and corporate events.
Council budget papers show the council loaned £600,000 to the consortium to assist with the relaunch of the 900 seat venue in Belgrave Gate. However the papers show that money has now been .
The council is currently drawing up an, as yet unpublished, feasibility study on what might be done with the venue.
Liberal Democrat councillor Nigel Porter, the only opposition member sitting on the Labour-run council, criticised the loss of such a large amount of public money in what he described as a ‘speculative investment’.
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He said: “It’s just another white elephant. The council has no right to lose £600,000.
“This isn’t £600,000 from you (the council’s) pocket. It’s £600,000 from the pocket of the poorest and most vulnerable in Leicester.
“It’s absolutely shameful this is going on.”
He said the council should not try to act as “some kind of whizz-kid” trying to make money in theatres adding: “Just do the basics day-to-day.
“Just repair the pot-holes in the roads, deal with the weeds and provide housing for people.”
The council has a 99-year lease on the theatre and had been paying £180,000 in service charges and security costs on the vacant venue.
The consortium took the burden of those costs from the taxpayer as part of its own sub-lease of the building and had been due to start paying the council £40,000 in rent from 2022.
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City mayor Sir Peter Soulsby said the council would continue to invest in the city to boost its economy and generate a cash return for the council.
He said it was grossly inaccurate to claim the council had no expertise in investments.
He said council investments were successful and contributed to the well-being of the city for generations.
He said: “I don’t know how many times I have to say this to Coun Porter, but he does need to take a little advice from our financial officers before he makes assertions about our investment and have a better understanding of them.”
Coun Ted Cassidy, the Labour chairman of the council’s overview scrutiny commission, said it was important for the council to invest in culture and economic regeneration though that meant sometimes taking risks.
He said he had nightmares of a “dying” city under a Lib Dem council run by Coun Porter where there was no investment.
Leicester’s Tories deputy chairman Rhys Brown said: “‘The huge loss of the city’s finances highlights the incompetence of this Labour administration, this at a time when everybody in our city is about to be hit with a five per cent council tax rise.
“The Haymarket Theatre is a clear example of how wasteful Soulsby’s council has been year after year, and it’s always the people of Leicester that suffer the consequences.”