An audit has found that councillors were aware of the risks of signing a development agreement over the doomed Hoylake golf resort scheme.
In 2021, the council paid almost half a million pounds to the Jack Nicklaus Joint Venture Group to stave off a £20 million legal action.
The action was brought by the firm after a decision by the local authority in 2019 not to proceed with a £26 million loan to help fund the development.
The council had previously argued it would have generated a windfall of £2.5 million in interest payments.
The £200 million project, which was first mooted in 2008, was meant to comprise a health club and spa, two 18-hole golf courses, a PGA golf academy and residential development, located on the site of the current municipal golf course.
But the project was dogged by opposition, with Stop Hoylake Golf Resort and Wirral West MP Margaret Greenwood calling for it to be abandoned, citing concerns over the impact on the environment and increased traffic.
The financial payout led to mutual political recriminations, with the Conservatives and Greens calling for an apology from Labour, the Liberal Democrats saying it had “cost Wirral dear” and Labour condemning the developer’s actions as “disgusting”.
An internal audit report looking at lessons learned from the saga was produced last year, but clarification was sought by the audit and risk management committee as to whether councillors were fully aware of the risks around the scheme, including financial penalties.
An update to the committee’s meeting on Tuesday 17 January breaks down when decisions were made and the information made available, and has found in each case members of the relevant committees were aware of the risks.
In relation to the development agreement which was signed in 2016, it states: “It is clear that Members had sight of the draft Development Agreement, were aware that it was a binding legal agreement and received advice in relation to its terms at the Cabinet meeting of 7 November 2016. It is also clear that disputes could arise along the way, as there is a dispute resolution clause in the agreement which was used when the Developer made a claim that the Council had breached the agreement.”
Regarding the decision not to invest in the scheme in 2019, it says: “It is clear that Members were provided with details of the overall potential project risks and any key risks for the Council in respect of the proposed loan to the NJVG, which were included in the external report of IPW presented to Members at the Business Overview and Scrutiny Committee meeting on 27 June 2019 and Cabinet meeting on 8 July 2019.”
It also found that in 2021 “members were provided with sufficient information…to enable them to make informed decisions about whether or not to pay NJVG £495,000 and releasing the Council from any and all obligations under the Development Agreement.”
