A £150,000 grant from Boris Johnson’s flagship levelling up towns fund was awarded to an amusement centre launched by the Conservative donor Lubov Chernukhin, raising questions about whether public money has gone to projects most in need of financial help.

Rowena Mason www.theguardian.com 

Chernukhin, a businesswoman who has given more than £2m to the Conservatives since 2014 and is married to a former Russian finance minister, co-founded the Owens entertainment centre in Hastings, East Sussex.

The centre received £150,000 from the government’s towns fund in October after a tender process, through a company called C&O Entertainment. A further £250,000 went to the developer behind the refurbishment of the former Debenhams building in the seaside town.

It includes several restaurants, a bowling alley, immersive experiences, virtual reality rides, an oddity museum and amusement arcade. There is no suggestion of any political consideration in the award of the grant.

Chernukhin launched the project in October 2022 as a joint venture with an entertainment entrepreneur, Graham Owen, and she has been a director of C&O Entertainment since February this year. It is owned by a company called Triple 8 Holdings, held by two senior partners at a wealth management firm, and is believed to be at least in part owned by the businesswoman.

Owen does not own any shares in the company. Despite giving his name to the attraction, he is now believed to have left his role at the company.

A spokesperson for Chernukhin said Owens Entertainment was opened with a vision to “revive the British high street and stimulate local economies through the establishment of family-orientated entertainment centres”, with an estimated 100,000 visitors since launch. They said the centre had provided jobs by hiring 45 contracted staff members and space for four concession holders.

The spokesperson confirmed her involvement in C&O Entertainment but did not respond to a question about its ultimate ownership. She said Chernukhin “was not involved in any way whatsoever in the grant application process” and that it was driven by the developers and the Hastings towns deal board without her knowledge.

Last September a finance manager from Owens Entertainment gave a presentation to the Hastings towns deal board setting out that “development of the entertainment centre is going well, and it is hoped it can be officially opened on or around 14 October”.

In the minutes, it was recorded that the project by this time was already close to completion and the extra money was used to “extend the centre’s originally planned offer, therefore allowing for more attractions to be created”.

The bid was not part of the original towns fund allocation process but was added in summer 2022 by the Hastings towns deal board after another bidder pulled out and the tender was re-run. It was subsequently approved by the Department for Levelling Up, Housing and Communities and the money was paid in October 2022.

Hastings council said the business case for the town deal bid by Owens was confidential but had been “independently assessed against various criteria including jobs created, amount of public and private investment, wider economic impact in the town and value for money and deliverability”.

“The funding for Owens Entertainment was to enhance and extend the number of entertainment offers. It was also bringing back into use a large former Debenhams building which had been empty for more than a year,” a spokesperson said.

“There were no political considerations in the decision to support a project that brought a large potentially long-term empty building back into use so quickly.”

Chris Bryant, the Labour MP and chair of the House of Commons standards committee, called into question whether the project was deserving of the money, saying that “so-called discretionary funds” were a cause of concern. “Especially now we know the company of the largest female donor to the Conservative party has benefited in this way. Public funds should go to those areas most in need,” he said.

Chernukhin, a British citizen, is a former banker who has been under scrutiny over her links to offshore wealth and her husband’s former membership of Vladimir Putin’s government until he was sacked in 2004. Labour has previously called for the Conservatives to hand all money given to the party by Russian-linked donors to humanitarian causes, including more than £2m given by Chernukhin since 2014.

On her donations, Chernukhin’s spokesperson said: “It is correct that Lubov has donated more than £2m to the Conservative party, and all such donations have been properly declared in accordance with Electoral Commission rules. As a British citizen, Lubov is entitled to make donations to political parties as she sees fit, and any suggestion to the contrary would be patently xenophobic.”

Woking council has declared it is in effect bankrupt after admitting a risky investment spree involving hotels and skyscrapers overseen by its former Conservative administration had left it facing a deficit of £1.2bn.

The cost of a Tory attempt at “regeneration”, Owl can think of local examples that haven’t gone too well but not on such a scale.

Richard Partington www.theguardian.com

In what is thought to be the biggest financial failure in local government history, the Surrey council said it had issued a section 114 notice on Wednesday in response to “unprecedented financial challenges” facing the town.

A section 114 notice is effectively an admission that a local authority does not have the resources to meet current expenditure, with Woking joining Thurrock, Croydon and Slough as the latest English council to run into trouble after ploughing cash into risky commercial investments.

Woking said that against its available core funding of £16m in the 2023-24 financial year, the council faced a deficit of £1.2bn.

Laying bare its financial position, the tiny home counties authority in the affluent London commuter belt warned it had failed for the past 15 years to set aside enough money to keep up with payments on a vast debt pile amassed under its former Tory leadership.

Racked up to finance the building and acquisition of a vast empire of commercial assets, its investments included a complex of sky-high towers – standing as the tallest buildings outside a big city in England – including a four-star Hilton hotel, public plazas, parking facilities and shops.

Woking warned its debts were forecast to hit £2.6bn, while it had taken the uncomfortable step of writing down the value of its investment portfolio by more than £600m in a reflection that its property holdings were worth far less than previously anticipated.

Ann-Marie Barker, the council’s Liberal Democrat leader, whose party took over from the former Tory administration after it was voted out in local elections last year, said there was a danger that services could be cut as a consequence.

“We’re going to have to look at those and provide the services in a very different way in future. Inevitably it’s not going to be such a good service as it was in the past,” she told the Guardian.

Woking was put into special measures by ministers late last month amid rising concern in central government over the scale of its debt problems.

Most of the council’s spending had been financed by an obscure arm of the Treasury – the Public Works Loan Board – with £1.3bn worth of borrowing that Woking could now struggle to repay.

The process will be overseen by a team of expert commissioners after a review launched this year. It is believed the council’s troubles are so significant they could have an impact on the national government finances.

“The debt in Woking is staggering,” said Meg Hillier, the Labour chair of the Commons public accounts committee, adding that the government needed to have a “stronger oversight” of how councils were investing.

In 2020, the powerful cross-party committee said ministers were “blind” to “extreme risks” of investment by cash-strapped councils.

Hillier said: “We have seen too many councils borrow multiple times their annual budget at huge risk and real cost to local council taxpayers.”

Many councils piled into property and other commercial enterprises to raise money to fill gaping holes in their budgets and to undertake regeneration projects after sharp cuts to central government funding introduced under the Conservatives’ austerity drive.

Kevin Davis, the Conservative group leader on Woking council, said his local party had issued an apology to residents for the financial position the local authority was now in, while arguing that council’s investments were made in good faith in an attempt to regenerate the town.

Davis said: “Remember the cost measures coming through every year with the revenue grant being steadily reduced. It’s safe to construct an argument that says that period led the council to look for other ways to generate that missing income.”

He added that the pandemic had significantly affected the valuation of the council’s assets, but also suggested further investigation was required to establish whether the former Tory administration had adequate checks and balances in place when it was making investment decisions.

“It’s likely the answer is that, no, it was not robust enough, it is more than just Covid,” Davis said.

A government spokesperson said: “Following serious ongoing concerns about the financial situation of Woking council, the government announced an intervention into Woking’s financial position in May and commissioners have been appointed. We will continue to work closely with the authority and will take action if necessary.”

Angry parents and carers have criticised Devon’s under-performing special education services in front of the county council’s leadership.

Ollie Heptinstall, local democracy reporter www.radioexe.co.uk

They say support for children with special educational needs and disabilities (SEND) is not improving, despite it now being one of the council’s top priorities.

Their comments come four months after they staged a protest at County Hall about what they believe is the council’s “neglect” of their children, and sent an open letter demanding “urgent action.”

Last year Devon was hit with a government improvement notice for its SEND services, which it runs in partnership with NHS Devon.

Both the Conservative-run council and NHS Devon apologised after a revisit by Ofsted and the Care Quality Commission in May 2022 found progress had not been made in fixing four areas of significant concern they identified in December 2018.

Another inspection last month found the quality of social work “remains inconsistent,” though DCC says it also suggested it is “now moving in the right direction, but we acknowledge that there is still much more to do.”

However parents who spoke at Devon’s children’s scrutiny committee on Tuesday, also attended by the council’s chief executive and the member in charge of children’s services, expressed concern about the state of affairs.

One parent spoke of the “dire situation” faced by their family, explaining that one child has been out of school since 2016.

“They’re now one year away from adulthood and have been unable to access any education at all for the last two years,” Nicola Brewin said. “This is due to the lack of care they’ve received by Devon County Council.”

She told the committee she had submitted six tribunal appeals to DCC. “Having children with additional needs is challenging, but the added stress of being forced to a tribunal so many times is horrific and is robbing my children of the support they need and the childhood they deserve.”

Ms Brewin also criticised the council’s processes, including for administering educational health and care plans (EHCPs), adding: “Our case presents a spotlight on the multiple failings of DCC to uphold its responsibilities to children.”

Fellow parent Caroline Bolingbroke said: “I have a 13-year-old autistic child who has not been able to attend school for four years. Getting the support they need has been a huge fight. I was an education professional but now I’m at home with my child every day.”

She added: “Parents of children with SEND in Devon know what is going wrong. We can help make things better but we are not being consulted or communicated with effectively. We are not seeing any improvements.

The council, under pressure from the Department for Education, has developed an improvement strategy to improve SEND services across the county, which includes recruiting more caseworkers.

But Ms Bolingbroke called it “just a wish list with no clear map of how the service is going to get from ‘failing’ to ‘good’.

“We don’t have a voice in our children’s future,” she said. “Our children don’t have a voice. When is anyone going to listen to us?”

Elaine Davis-Kimbell, another parent, then told the committee that parents and carers of young people with SEND are “absolutely sick and tired of decisions constantly being made for us without any proper consultation.

“We are so fed up of hearing the word ‘co-production’ being battered about this council within improvement plans. No one is producing anything with families.”

Fellow parent Astrid Harding said she is “outraged that our children and young people are missing out on their right to an education.

“We are parents and carers, not teachers, yet more and more of us are having to home-school our children as it feels the only option left to us given the significant dearth of appropriate educational provision on offer in this county.”

“I myself have reached out for over two years for support now for my son, who was forced out of school due to [EHCP] issues and tribunal and is now struggling to go back to school.

“All my family’s mental health and wellbeing is in tatters facing a system that doesn’t care about any of these matters,” said Ms Harding.

Devon’s interim director of children’s services, Julian Wooster, admitted the system is “failing to deliver improved outcomes for children and young people with SEND.”

He added: “Parents’ confidence in the system is in decline and, despite substantial additional investment, the system has become financially unsustainable. That is not a comment just on Devon. That’s the comment across the country.”

Mr Wooster said councils were facing a “system nationally which is not working” but accepted that in Devon “we need to make more progress than others in this area.”

But the council’s opposition leader, Lib Dem councillor Julian Brazil, took issue at the reference to national problems with SEND provision.

“We’re one of the worst [performing councils]. We are surrounded by Cornwall – outstanding. Torbay – good. Somerset – good. Devon – inadequate. So why is it that we’re so bad?

“Can we just stop saying it’s terrible across the rest of the country? It’s terrible here in Devon and we should look at ourselves and see how we can do it better.”

In response a spokesperson for Devon County Council said: “We understand the concerns and frustration of parents and share the desire to drive real improvement across SEND services as quickly as possible.

“Giving the right support to children with SEND to the age of 25 is a national challenge and one which Devon along with many other local authorities has found difficult to get right.

“We are working closely with parents and carers, with our schools and health partners, and with the government to make things better in Devon, but there are no quick fixes.

“This is a top priority for the council and we have been able to commit extra resources this year to help support change including appointing a dedicated deputy director of SEND to lead on this.

“The most recent Ofsted inspection last month did point to some positive improvements and suggested we were now moving in the right direction, but we acknowledge that there is still much more to do and it will take some time to get this right.”

Boris and Carrie Johnson hosted a close friend at Chequers while some coronavirus restrictions were still in place, it has been reported.

Oliver Pritchard-Jones www.independent.co.uk

The former prime minister and his then-pregnant wife are said to have invited corporate events organiser Dixie Maloney to the Buckinghamshire country mansion on 7 May 2021.

At the time, indoor gatherings between different households were banned except when “reasonably necessary” for reasons such as work or childcare or to provide care or assistance to a vulnerable person, including someone pregnant.

The Guardian reported that she had been informally helping to plan the couples’ festival-style wedding, which took place at Downing Street three weeks later.

Any suggestion they broke the law has been disputed by the couple and Ms Maloney, with sources telling the newspaper that she was there for childcare reasons as Ms Johnson was pregnant.

Mr Johnson’s spokesperson insisted the event was “entirely lawful” and Ms Maloney told the paper she would not have done anything that she believed at the time to be unlawful.

The report comes as the former prime minister remains under investigation for allegedly breaching the Covid rules his own government drew up during the pandemic.

Liberal Democrat deputy leader Daisy Cooper told The Independent: “The public are sick of subsidising an ex-prime minister, especially one who once again appears to have shown complete disregard for the rules they had to follow.

“We’re all left wondering what more it will take for Rishi Sunak to finally scrap Johnson’s taxpayer-funded legal bill.

“Almost every day of this government brings more stories of Conservative sleaze and scandal, all whilst the problems facing the country get worse and worse.”

The visit was one of approximately 12 gatherings that allegedly took place at Chequers and Downing Street and are being assessed by two police forces. Thames Valley Police, which covers Chequers, told The Guardian that it is reviewing the evidence and has not yet launched an investigation.

Mr Johnson is also awaiting the outcome of the privileges committee inquiry into whether he deliberately misled MPs over the initial Partygate scandal.

A spokesperson for Mr Johnson said: “This was entirely lawful, and it was covered by relevant provisions in the Covid regulations, as The Guardian’s report makes clear. To suggest otherwise is totally untrue.”