Shropshire Council to better market loss-making Ellesmere restaurant
Tuesday 31st August 2010, 11:01AM BST.
Bosses of a north Shropshire restaurant today vowed to fight back after news emerged that the premises was operating at a loss of almost £35,000 in its first year in business.
The Boathouse Restaurant beside The Mere, in Ellesmere, is run by Shropshire Council and councillors have pledged to spend more time marketing it.
The taxpayer-funded restaurant underwent a £2 million revamp last year before reopening after being jointly bought by Shropshire Council and Ellesmere Town Council.
Ann Hartley, Shropshire councillor for Ellesmere, said: “We will be looking at opening the restaurant in the evenings, doing a lot more marketing and trying to hire out the premises more. It was bound to take time to get the restaurant up and running and we are confident next year will prove to be more successful.
“We were very proud of the revamp.”
Figures show gross expenditure between July 2009 and July this year was £250,571, which includes £123,371 on staff costs.
But restaurant sales were just £212,610, while venue hire bought in a further £3,201 – leaving a net loss of £34,760.
Council officials said despite the financial loss, the restaurant was going “from strength to strength” and had seen income rise by 70 per cent in recent months.
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What’s a council doing owning a venture like this?
Councils should NOT be competing against privately owned restaurants and should certainly not be using taxpayers’ money to do so.
And councils are not usually the best organisations to run restaurants – that should be obvious in this case as one reviews the losses that have been run up – losses, incidentally, that would force most private ventures to close down.
Don’t spend money marketing it, hiring rooms out, opening in the evenings – (all things that should be expected from a restaurant manager in the first place, by the way, so what have current management been doing in return for their salaries?) – just sell it!
If there are no takers, then it’s not viable anyway and the council should close it.
If there are takers, then that’s money saved that can be used on projects that councils SHOULD be involved in.
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My parents used to run this back in the late 50′s, it was owned by the council then and they couldn’t make any money then so obviously nothing has changed. It’s probably too seasonal to really make any money.
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This is a typical example of councillors spending money on a venture that they think is a good idea. This never made money before and was never likly too again. No wonder Shropshire is in debt. Easy come easy go.
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This is unbelievable. Councils do not run commercial activities using tax payers money. Invariably the costs are higher than if run privately and terms and conditions of employees no doubt enhanced. Wintrer is shortly upon us and no doubt costs will remain with less income. Whats the point bin marketing now. Stop wasting our money!!!
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Dont you think somebody should be asking why it cost £2million to refurbish what looks like a ramshackle old boathouse?
For £2 million I would be expecting to see an amazing new building with state-of-the art facilities.
Sounds like another great example of tight contract management in the public sector.
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Perhaps the Boathouse could be kept open throughout the winter, lots of people have Chistmas/New Year celebrations in January. Certainly, closing down in the evening is missing a prime time for people to enjoy a meal in this lovely spot.
Give some of the newspapers and local magazines a slap-up meal, so they will mention it as they do other venues.
And let us Ellesmere residents know how the venue can be hired.
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The Boathouse IS open through the winter if I’m not mistaken, and to book the place surely you do the same as you would for anywhere else and phone them?
PS Shropshire Star, maybe you could use a photo that’s not several years out of date, ie post-£2 million refurbishment?I t’s a lovely place to go for coffee and cake, much more pleasant than the photo suggests it to be.
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I’ve said all along, that people running the council, couldn’t survive in the real world, especially if they had to run a “proper” business and this just goes to show that.
Leave the running of “proper” businesses to proper business people and stop squandering our money, while you “play” at being in the real world.
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Proper business people like the directors of MG Rover perhaps? Or maybe the proper business people in the financial sector who demonstrated their supreme business acumen in bringing about recession? How about the proper business people who run privatised utilities and rail services where quality of service is at best erratic whilst management pay continues to go through the roof?
Polly Peck, Fairpak, Wrekin Construction etc etc etc.
I’m not about to pretend that those in control of the council are better qualified to undertake a business venture, but “proper business” isn’t always the roaring success you seem to think it is when run by “proper business people” either. There is good and bad on both sides, and to allow judgement to become clouded by one particular case is hardly a fair trial is it?
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That’s right Mark, private does not always mean roaring success, which is why the companies that you name have either ceased trading, are working in a warped monopoly, (utilities don’t work in a competitive market, whatever we’re led to believe) or been pumped full of taxpayers’ money to allow them to keep staggering on, (banks, etc).
No-one’s saying that all private companies are roaring success, but one thing is for certain – this venture is not one either and consumes a large amount of money paid by taxpayers, (such as privately-owned restaurants who have to pay their business rates or get taken to court) and can’t even make a profit in a skewed market.
In fact, “proper business” IS usually a roaring success when run by “proper business people”. But in the cases that you have mentioned, you have forgotten your own words and allowed your judgement to become clouded: “There is good and bad on both sides, and to allow judgement to become clouded by one particular case is hardly a fair trial is it?”
Correct. And neither is it fair that a council demands taxes from private restaurants and uses them to artificially subsidise a loss-making council one.
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Fair comment Rodney, but council operations by their very nature will more often than not eat into the public purse, and this is the reason for people getting hot under the collar when stories such as this appear.
Had the venture been an outstanding success, then I doubt it would have received media coverage as press reports usually favour covering things that don’t go well where councils are concerned.
What is the alternative in this case? I can’t see any private investor taking it on if it’s been a loss maker since the 1950s (as suggested by Amanda Humphreys above). To that end, maybe there is no option other than to allow it to remain a council run operation. Surely that’s preferable to allowing it to close and fall into disrepair if there are no private takers.
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Mark, I would also like to point out that my father run a very succesful business, in a different field to my own, employing many people for over forty years, until his death.
Neither of us attended business school or had degrees. Being a good business person is sometimes just common sense and the ability to learn as you go along, something that many council officers should try and use in their everyday attempts to “get things right”.
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Looking back at this story and the comments, Bill Stenness is correct: what exactly did they get for £2 million? That is a huge amount of money, certainly more than most private restaurant owners could dream of spending or even borrowing, and let’s see if they can ever recoup that sum either by trading or by selling.
I see on certain blogs that government and local government buyers are referred to as “simple shoppers”. You can certainly see how that would seem to be an appropriate term.
I wonder who the auditors are? Maybe they could give an opinion on whether the refurbishment and the ongoing project are providing value for money for taxpayers.
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Mark, by proper business people, I mean small family owned businesses that have to make a profit, don’t have shareholders on fat bonuses eating into the profits and being put into liquidation for milions. I’ve run my own business for 27 years now and I HAVE to make a profit. There are lots of “proper” businesses around if you open your eyes.
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That I wouldn’t deny roadrunner, a close friend runs a very successful small business as do a number of my relations.
I’m fully aware that private business is generally successful and therefore contributes much to the economy;
the examples used in my previous response (MG Rover etc), were given in an attempt to highlight the fact that poor management doesn’t just exist in councils. Unfortunately, it these issues which the media prefers to concentrate on.
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£2m? Surely that was for the landscaping work on the entire Mereside, not just the boathouse?
Contrary to the majority of opinions above, perhaps this is exactly the kind of facility that the council should own and run. Trade here is seasonal and weather-dependent, and therefore unpredictable, which makes it a very poor proposition for anyone considering running it as a private venture. Under council ownership, it’s an amenity, which is there to be enjoyed by everybody all year round. Under private ownership the business would close within a year, leaving a rotting shell, which I’m sure nobody wants to see.
How well they run it is a different matter though. Amenities cost money (parkland, public toilets, etc.), but since this one has the capacity to generate income then at least making it cost-neutral should be an aim. Having said that, I don’t think £35,000 is poor value for money. It probably costs that much annually to clean up the waterfowl poop.
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