Profits plummet at Saddlers Centre after council purchase
Profits at the Saddlers Centre have slumped to less than £200,000 since Walsall Council's controversial deal to buy it, the Express & Star can reveal.
The figure is markedly less than predicted by the borough's Labour group, which took out a £13.8 million loan to buy the centre when it was in power in August 2017.
The authority is now under Tory control, and council leader Mike Bird has accused Labour of lumbering them with a 'huge white elephant'.
He is considering calling in external auditors to examine the original deal to buy the centre. Labour has hit back, insisting the centre was a good investment.
A report to the council says the estimated annual profit at the centre was between £164,000 and £184,000.
In March, Labour leader Sean Coughlan said the forecasted revenue profit for the first seven months of council ownership would be £506,000.
Since then the centre has been hit by the decision of Marks & Spencer to pull out, while a significant number of other units remain empty.
Councillor Adrian Andrew, Walsall Council's deputy leader, said: "Whether Labour misled people in Walsall, or they simply got their sums wrong, the profits figure is far less than what was claimed.
"This does not even take into account maintenance costs, which will reduce the figure even further.
"We said all along that this was a bad deal for the council and a bad deal for the people of Walsall."
Councillor Bird added: "We have been lumbered with an asset which has seen its value drop further due to Marks and Spencer pulling out.
"We are seriously concerned about what happens when the loan comes to an end. Will there be enough capital to pay off the balance?
"This is a huge white elephant and it may well be that we bring in external auditors to look at the procedure the Labour group went through to buy the centre."
Councillor Lee Jeavons, the Labour group's deputy leader, said: "This was a good investment, and although we have had to spend money on the centre, it is still giving the council a net profit.
"However, the main reason for buying it was that it gives us control of the main gateway to the town centre and any future developments in and around Station Street.
"This is vitally important, as with the arrival of HS2 Walsall's future will depend on its connectivity."
The deal to buy the Saddlers Centre remains shrouded in controversy. It saw the council take out a £13.8m interest-only loan from the Government, which must be repaid in full by February 2023.
Eddie Hughes, the Conservative MP for Walsall North, accused the Labour group of being 'reckless' with the public purse.