How much BCP Council spent on failed beach hut sale

A Freedom of Information (FOI) request by the Daily Echo reveals BCP Council spent £147,052.40 on the Special Purchase Vehicle (SPV) to sell off the beach huts.

Of this, £80,250 was given to international accounting firm KPMG to produce three reports. 

KPMG produced three reports last year for the authority, two of which related specifically to the beach hut SPV project. 

The SPV would have purchased the assets, namely the thousands of beach huts along Poole and Christchurch bays, at market value using mostly third-party debt and an additional shareholder loan from the council. 

However, the scheme was axed after an intervention by the government’s levelling-up secretary at the time, Greg Clark MP. 

A spokesperson for BCP Council said in commissioning KPMG, the previous Conservative administration was “keen to understand the SPV’s viability as a means to help fund the transformation programme”. 

“KPMG was chosen for several reasons,” the council said. “They had demonstrated value for money in similar works previously undertaken for the council, including being our strategic investment partner. 

“Their prior understanding of our organisation also meant that the council was able to avoid additional time and costs involved in onboarding another consultant.  

“KPMG’s fees were comparable to fees charged by other firms.” 

Beach huts

The council defended paying for the reports, saying it is the action of one which is “responsible and diligent”. 

“The original proposal was entirely within the rules at the time it was proposed,” the council added. 

“The government subsequently changed the Flexible Use of Capital Receipts rules, which meant that the scheme could not proceed as it was originally envisaged.” 

“Whilst the project was ultimately not progressed, the commercialisation of beach huts did at the time align to the seafront strategy, adopted by cabinet in April 2022, which set out a unified vision, ambition, and list of priorities for investment in leisure and infrastructure.” 

As reported, BCP Council chiefs spent months working on plans to create the SPV which would have borrowed money from the council to buy the huts for around £50million.

The money from this transaction would then have been used to plug a big gap in the local authority’s transformation of services budget.

However, government ministers kiboshed the proposal as they decided it was against the spirit of the flexible use of capital receipts regulations.