Town Deal Funding: Owens in Hastings

Motion made, and Question proposed, That this House do now adjourn.—(Taiwo Owatemi.)

22:00:00

I have called this debate about Owens in Hastings, the short-lived family fun factory whose boarded-up front is a familiar and depressing sight to anyone who has walked through our town centre. We are certainly not the only town to have experienced boarded-up shopfronts, which have become all too common on high streets around the country. The reason I am here speaking about this at 10 pm is that Owens has come to symbolise for our community much more than a mere eyesore. Under the Conservative Government’s levelling-up plans, Owens received £150,000 of taxpayers’ money. At the grand opening of Owens, it was revealed that the owner behind it was Lubov Chernukhin, a millionaire who has donated more than £2.4 million to the Conservative party. Did Ms Chernukhin, a millionaire owner, really need a top-up from the taxpayer to fund such a venture? Was that truly the best use of the money given to Hastings to improve our town? None of that makes any sense to my constituents. It gets worse. Owens closed shortly after opening, and the deserted, boarded-up building now dominates our town centre in Hastings. The staff were laid off with no notice, and many people who supplied the business and helped with the building work have said that they have not been paid for their work. The closure of Owens, which is now covered in wooden boarding, leaves a stain on our community. Owens has now been closed for 18 months. What has Ms Chernukhin been doing in that time? The answer is: donating vast sums of money to the Conservative party. It is a shame that no Conservative Members are here to hear this, because they might like to hear that the right hon. Member for Witham (Priti Patel), who sits on the Conservative Front Bench, recently accepted a £70,000 donation from Ms Chernukhin, who is clearly not struggling for money these days. In just the time since Owens has been closed, she has donated more than £150,000 to the Conservative party. Ms Chernukhin should donate the money she received from the taxpayer back to the people of Hastings—used well, it could go a very long way to fixing our broken paving stones and bus shelters. Lubov Chernukhin: we want our money back. Until that money is repaid in full to our community, the Conservative party should not take a penny in donations from her. Again, it is a shame that no Conservative Members are here, but I will be writing to the Leader of the Opposition, the right hon. Member for North West Essex (Mrs Badenoch), urging her not to take any more donations until that is done. When she became the Conservative leader, she said very clearly that her party would apologise for the mistakes that it had made; perhaps apologising to the people of my constituency is a good place to start.

I commend the hon. Lady for bringing forward this debate. One of the things I see, which she perhaps sees as well—it is the thrust of where she is going—is that the town deal funding the Government offered gave great opportunities to councils. I know that they did the same in my council area, where we developed an evening dining culture and a coffee culture, but it took the council being the body ensuring that the money was spent where it should be spent. Does the hon. Lady see the good things that can come out of the town deal funding? Does she agree that we should all look at and focus on the good things?

I thank the hon. Gentleman for his passion about his area and about improving it. It is so true that where money is spent properly, in conjunction and collaboration with the priorities of local people, we see people really feeling a difference in their community. That is why when I speak to my constituents, it is so frustrating for them. We all know that we could have spent £150,000 so much better, which is where that frustration comes from. We are left with a boarded-up, huge building in the centre of town that we have to walk past, and we are reminded of that failure every time. The Guardian has also reported that Lubov Chernukhin’s involvement in Owens was at least part funded by a £1.5 million loan from a British Virgin Islands company, Sunny Gulch Village Ltd. That company was previously owned by her husband, Vladimir Chernukhin, a former deputy Finance Minister in Putin’s Russia and former chairman of a Russian bank. In a 2018 court case, Lubov herself confirmed that Mr Chernukhin had maintained “excellent” relationships with “prominent members of the Russian establishment”. Is that really the company that the Conservative party wants to keep, and is that really a suitable donor? There are also serious questions to answer about what due diligence was done under the last Government before taxpayers’ money was handed out in this way. The money was part of the town deal fund under the last Government. The plans for spending that money were meant to have been scrutinised by a board that was representative of the local community, but when I have spoken to local businessmen and women who sat on that board, they have told me that they were given very little information about the projects and pressured into signing them off. One asked repeatedly to see the full business cases, but was told that they could not because of commercial sensitivities. Why did the previous Government design such a process for spending taxpayers’ money with so little transparency for us, the taxpayer? Local businesses also cannot understand why the decision was taken to subsidise a commercial venture when they themselves have had to work so hard to get their businesses off the ground, with no help from the taxpayer. Genecon, a consultancy, was paid by the town deal board to examine the business case for each project, but no research, analysis or figures have ever been shared. Did Genecon ever do that due diligence? All projects were signed off by the then levelling up Department; what checks and due diligence were done by officials and Ministers on those projects to ensure that our taxpayers’ money was being spent wisely? It seems that in the case of so many levelling-up projects, proper processes were not followed. Anyone who speaks to any charity applying today for public money will be told about all the paperwork those charities rightly have to go through. Why was the bar set so low for a venture such as Owens? Moving forward, it is vital that the same mistakes are not made. Under this Labour Government, we have a brilliant opportunity to breathe life back into our high streets, sort out our empty units and get our local economy moving. I am really grateful to the Minister for the Labour Government’s confirmation that Hastings will be one of the 75 towns awarded £20 million in funding toward those aims over the next decade. The Government have rightly said that that money should be spent on the priorities of our community, whether that is broken pavements, broken bus shelters, or opening up important community venues such as St Mary in the Castle. I will be publicly asking my constituents how they think that money should be spent, and putting on pressure for us to spend it properly. The Labour Government are also giving our communities important new powers, such as high street rental auctions. These will give local leaders the power to take action on properties that have been left vacant for over a year, granting local businesses and community groups the right to rent empty commercial lots at market price. Lastly, I put on record my thanks to the journalists involved in exposing this scandal. It is only because of the work of journalists at local publications such as the Hastings Independent Press, as well as at The Guardian, that we know what has gone on. Never again should taxpayers’ money be wasted in this way. For that reason, I am also referring the case of Owens to the National Audit Office, and I ask it to investigate. The lessons from Owens must be learned.

22:08:00

I congratulate my hon. Friend the Member for Hastings and Rye (Helena Dollimore) on securing this evening’s important debate, and I thank her for speaking so powerfully on behalf of her constituents. She is a passionate champion for Hastings, and is leading the charge to ensure that not a single penny of Government investment in that town is wasted. We have a number of things in common; we are both Labour and Co-operative Members of this House, but we were also both in Hastings and Rye on 8 September 2022 when the late Queen passed away. Apart from the profound sense of how important and significant that day was, what was very clear from speaking to those who are now my hon. Friend’s constituents was the high regard she was held in. I am glad that that was reflected in the result of the election. Before I turn to the main subject of the debate, I will speak about the funding that the Government are putting into my hon. Friend’s constituency. Last week, my Department announced up to £20 million of funding and support for Hastings through our new plan for neighbourhoods. It will help build a thriving Hastings, strengthen the local community and allow residents to take their own decisions on things that affect them. We are also giving Hastings £15 million for our community regeneration partnerships, which will help provide more affordable housing in the town and fund improvements at the Hollington youth hub. Those investments come on top of the £24.3 million town deal for Hastings. Our town deals are based on local partnerships and local decision making, and they are led by local town boards. I know my hon. Friend is a member of hers, and I know that she champions her area extremely well. I am pleased to see that the town deal in Hastings is well into delivery and is beginning to deliver results on the ground, although I hear her concerns about Owens entertainment centre, which I will turn to in more detail. When my hon. Friend raised this issue in the House last year, I was disappointed to learn about the closure of Owens and any money wasted under the previous Government. Although the decision to invest in the project was taken by Hastings borough council and the town board, it goes without saying that it is deeply disappointing when projects fall through. I understand that the project at the former Debenhams site was due to bring the building back into use and create more leisure facilities and, importantly, local jobs. Following the closure and the company responsible going into administration in October 2024, the owner has retaken possession of the building and the space has been re-advertised for lease. I hear the concerns of my hon. Friend and her constituents loud and clear regarding her constituents rightfully getting their money back. Although the funding comes from the UK Government, the responsibility for local town board management sits with the town board and formally with Hastings borough council as the accountable body for the town deal. I understand that Hastings borough council issued legal letters last year regarding potential action to recover the £150,000 from the towns fund that was allocated to CFEC Ltd, which ran Owens entertainment centre during this time. I will be direct, as my hon. Friend was direct, and say that there are plenty of unanswered questions. What we do know is that the Conservatives, when they were in government, received £2 million in donations from its owner. We also know that under their watch, this now-closed amusement centre received more than £150,000 of taxpayers’ money. The simple question we do not yet know the answer to is: why? Why might this millionaire Tory donor have needed a top-up from the taxpayer to open a bowling alley? There are concession owners in the dark, ticket holders confused and, importantly, 31 staff members without a job. I am sure they would like to know the answer to that question, too. I am also sure they would like to know whether the Conservatives, given what has now come to light, have any intentions, for the benefit of the local community, of returning all or part of the donations that they received? Following the news that CFEC Ltd had gone into administration in October ‘24, a claim was lodged with the administrators to recover the £150,000. My officials will continue to stay up to date on the situation through our town deal monitoring and regular conversations with the council. On town deals more widely, my hon. Friend the Member for Nottingham North and Kimberley (Alex Norris) was pleased to offer an extra year for delivery recently, taking the end of the fund to March 2027. We all want to see quick results, but colleagues in this House and in councils have reiterated how challenging it has been for projects, especially with cost inflation. This Government have listened, which is why there is now an extra year of funding to get those projects over the line. My officials are working with areas where the extra year is taken up to ensure that delivery stays on track. Let us now look at the broader picture. The last Government tied places up in knots with their short-term initiatives and funding pots, all with very different rules and timetables. Far from driving growth, that bogs places down in bureaucracy, complexity and uncertainty. Moving ahead, we will set out a refreshed approach to local growth funding in the multi-year spending review in the spring—an approach that simplifies funding, with less red tape and more local choice. This Government’s defining mission is growth, and we are determined that nowhere will be left behind. Together, we will work in partnership with people on the ground and with local authorities in Hastings and in every corner of the country. Question put and agreed to.

22:14:00