London Pleasure Gardens debacle costs council £4m

The London Pleasure Gardens fiasco has cost Newham council more than £4 million for the five weeks it was open.

The scheme got up and running last summer as part of a plan to turn 8ha of the Royal Docks opposite the Excel Centre into a thriving arts and entertainment venue.

It was launched under the Meanwhile London banner – a competition set up in 2010 to find temporary uses for four sites in east London – and attracted a number of up and coming architects to carry out work at the site.

It opened at the end of June to take advantage of an expected surge in visitor numbers thanks to the 2012 Olympics.

But just a week after the Games themselves opened on July 27, the company operating the site, London Pleasure Gardens Ltd, went into administration after events were cancelled and predicted visitors failed to show up.

The company was bankrolled by a £3.3 million loan from the council which has now been told by administrator Deloitte that its bill has gone up by a further £800,000 because of interest and costs.

The report added: “As stated [in an earlier administrators’ report in October last year] it was not envisaged there would be sufficient realisations to repay the secured creditor [Newham].”

It added that proceeds from the sale of the company’s assets were used to pay the administrators. Deloitte has racked up a £1 million bill but the firm said it would only take £400,000 and has decided to waive the remainder.

Former employees of London Pleasure Gardens are owed £255,000 with their claims currently being processed by the Redundancy Payments Office.

A Newham council spokeswoman said: “We are disappointed that the London Pleasure Gardens failed to bring the planned jobs and visitors to the area. The council is continuing to discuss the future use of the site with relevant parties and remains confident that we will see a return on our investment.”