A recent audit of Scarborough Borough Council’s £9 million loan to Benchmark Leisure Limited for the Alpamare water park exposes shortcomings in risk management and decision-making processes.
The loan aimed to support a regeneration project at The Sands and North Bay, positioning a major visitor attraction to drive tourism and local investment. Benchmark Leisure was selected through an informal tender, with repayment structured via rent and a percentage of park revenue. The council borrowed externally to fund the loan and set a fixed interest rate of 5.85% to meet EU state aid rules.
Construction delays pushed the park’s opening to July 2016, with a planned luxury spa completed in March 2019. Alpamare UK Limited operated the facility but faced cashflow difficulties within two years, failing to meet tax and supplier obligations. Benchmark Leisure stopped regular repayments in April 2019, leaving the council with approximately £7.9 million in unpaid debts. The water park entered administration in October 2023, with the council assuming full control by December 2023.
The Veritau audit found that reports to council members did not clearly distinguish between commercial investment and lending, risks were inadequately assessed, and officer recommendations did not reflect full professional analysis. The report highlights the importance of structured risk reporting, robust financial assessment, and adherence to expert advice in publicly backed regeneration projects.
Councils and development partners are advised to apply these lessons to ensure future investments are underpinned by transparent risk evaluation and governance, reducing exposure to financial and operational failures.
