Crosby Lakeside Adventure Centre opened in 2009 and was managed and operated by Sefton Council. On 7th November 2019 Cabinet were told that over the 10 years of its life the building has had little investment in maintenance. As a result, there was a back-log of maintenance required in the hospitality facilities, estimated at c. £1m, with some parts of the hospitality facility now at end of life. A familiar story to that of many of Sefton Council’s buildings.
In addition to the Council’s failure to maintain the building the centre ran at a loss, requiring an annual subsidy of some £250,000.
Cabinet’s solution on 4th February 2021 was to establish a new arms-length company – known as Sefton Hospitality Operations Ltd - which would take over and operate the facilities now known as Lake House, on the waterfront at Waterloo.
The Business Case for Sefton Hospitality Operations Ltd was approved by Cabinet 4th February 2021, updating the Business Case drafted in November 2019 This new Business Case reflected changes in the market due to the impact of the COVID-19 pandemic.
Cabinet were told that over 10 years (the lease period) the new company would not only remove the need for an annual subsidy but would produce a dividend to the Council of £409,000.
The Company was registered with Companies House on 11 th June 2021 with a Board of Directors including private sector leisure managers together with representatives from Sefton Council as shareholder.
A major maintenance and refurbishment programme was carried out, using grant from Liverpool City Region, totalling £3.1m.
As this was a new business, Cabinet resolved that £500,000 working capital be loaned from Sefton Council to the new hospitality company to cover the launch and the first 18 months of operation, after which the loan will be paid back to the Council over the 10 years of the business plan and as the first financial commitment from profits generated.
The loan would incur interest charges, which would also be repaid by the new company and the profits would generate some £503,000 to be used for ongoing maintenance over 10 years.
Five years later we have a different picture.
Accounts for Sefton Hospitality Operations Ltd for the year ending 31 st March 2025 were deposited with Companies House on 23rd December 2025. These showed that the loss for 2024/25 stood at £1,945,533 compared with the loss for the previous year of £1,439,203.
Losses 2024/25 = £1,945,533
Losses 2023/24 = £1,439,203
Losses 2022/23 = £ 813,580
Losses 2020/21 = £84,508
The losses are therefore growing and with no plans by this Council or the company to show how they will reduce.
Losses for the current year 2025-2026 are likely to grow further as a direct result of the Labour Government’s hostile budget which has severely impacted the hospitality sector as a result of business rates, energy bills and employment costs.
What is being done to control these extraordinary losses?
A conventional privately-run hospitality business would objectively review its costs and income to try and balance the books. The Directors and Managers would be held to account by the shareholders and the company could expect changes in its leadership.
But Sefton Hospitality Operations Ltd is no ordinary hospitality business.
The original Directors with leisure experience left in 2022 and 2023. The Directors now comprise a Labour Councillor from Harington Ward and two Council Officers – hardly the model of a commercial Joint Venture Company which was approved by Cabinet in 2021.
One has to question who is leading and managing this costly venture and what experience do they hold in the competitive leisure and hospitality industry? Who is safeguarding Sefton’s residents’ investment in this multi-million pound venture? Do they have any incentive to turn the business into profitability or do they expect unlimited financial support from Sefton’s residents?
It is not only the Conservative Party which is questioning the stewardship and probity of the governance of this company but the Council’s professional auditors.
In March 2024 the Council’s External Auditors, Grant Thornton, recommended that the Council should set out a clear timescale to replace Council officers as Directors of Sefton Hospitality Operations Limited. This is yet to occur.
The replacement of Council officers as directors would enhance the independence of Sefton Hospitality Operations Limited operations and support the management of any perceived conflicts of interest.
The Auditors have again challenged the Council to set out a clear timescale to replace Council officers as Directors of Sefton Hospitality Operations Limited and have recommended this timescale is defined by 1 April 2026.
Sefton’s Conservatives demand to know:
Why has Sefton’s Labour Council ignored the recommendations of its auditors and when will Council Directors be replaced by Board Members with experience of the hospitality and catering business?
What plans do the Directors of Sefton Hospitality Operations Ltd have in place to stop the losses of this company, or do they expect the Council to underwrite the company losses indefinitely?
What is the financial effect of Labour Government’s disastrous budget on the future viability of Sefton Hospitality Operations Ltd?
When will Sefton Council receive its promised dividend?
