The Fletton Quays Hilton Hotel was once billed as a jewel in Peterborough’s regeneration crown — a 168-room development on the banks of the River Nene, anchoring the city’s bold £120m redevelopment scheme. Today, it stands silent, part-finished, water seeping into its walls, pigeons nesting in its corners, and its future uncertain.
The troubled project returns to Cabinet on 2 October 2025, with councillors facing a pivotal decision on whether to finally let the administrators proceed with a sale or to take back control of the half-built site.
But as members prepare, the public will once again be excluded from the most crucial details. Most of the financial, legal, and commercial information is tucked away in a thick bundle of exempt appendices, accessible only to councillors and officers behind closed doors.
The decision before Cabinet may be framed as a matter of best value — but years of escalating costs, failed deals, and secrecy have already left taxpayers bearing a heavy burden.
Seven Years of Promises and Pitfalls
The Council first backed the scheme in September 2017, agreeing to lend up to £15m to the developers. The Hilton was to sit alongside the council’s Sand Martin House headquarters, 229 riverside apartments, a new Government Hub, and a multi-storey car park — the centrepiece of a transformed Fletton Quays.
Work began in March 2020, just weeks before the Covid-19 pandemic. Progress was slow, and then in June 2022, disaster struck: the hotel’s main contractor collapsed into liquidation. The fixed-price contract vanished with it, leaving the project exposed to surging construction costs in a period of inflation and supply-chain turmoil.
By May 2023, work had stalled entirely. Attempts by the developer to attract new backers failed, and by October 2023, the council — as primary creditor — appointed Teneo as administrators.
The Hilton dream was already turning into a financial nightmare.
What It Has Already Cost
The latest Cabinet papers reveal the true scale of what taxpayers have shouldered:
- Loan related costs: £14.88m advanced, plus £1.22m in written-off interest — £16.1m in total.
- Administration costs: £0.72m in administrator fees, £0.55m in holding costs.
- Council project and legal fees: £0.53m.
Total bill so far: £17.9m.
And that is before considering the millions more that would be needed if the Council chose to step in and complete the build itself.
A Building in Decline
A recent feasibility study by Willmott Dixon, commissioned through the SCAPE framework, catalogues the physical decline of the site.
Water is seeping into the structure via the external lift shaft for the proposed “sky bar.” Pigeons have taken over parts of the building. Urgent works to clear infestations, prevent further deterioration, and carry out surveys are estimated at £1.31m.
Further “asset protection” measures could run to £928,000, with no guarantee that more hidden problems won’t emerge.
In short, the longer the building sits idle, the higher the cost to secure, repair, and eventually redevelop it.
The Options on the Table
Cabinet is being asked to consider three broad scenarios:
- Allow Teneo (administrators) to proceed with a full disposal.
- Timescale: 6–9 months.
- Would generate a sale price, paying down some of the council’s loan losses.
- Council acquires, then disposes “as is”.
- Timescale: 9–12 months.
- Council assumes ownership risks before re-selling.
- Council acquires, completes, and either sells or operates.
- Timescale: 18–24 months.
- Requires vast new borrowing, ongoing debt servicing, and specialist expertise.
Independent consultants 31Ten, in their refreshed business case, concluded last year that disposal was the only financially viable path. That conclusion has now been re-confirmed.
Why the Public Is Shut Out
The weightiest details — valuations, cost breakdowns, legal advice, and risk assessments — are not being shared openly. Instead, they are contained in Exempt Appendices A–E, withheld under provisions of the Local Government Act 1972 that protect financial, legal, and commercial confidentiality.
That means taxpayers, whose money has funded the project and will absorb the losses, cannot see the precise valuations of the building “as is,” the cost modelling of completion, or the risks associated with alternative uses.
Cabinet members, meanwhile, face a “busy time ahead” poring over hundreds of pages of sensitive documents — but the deliberations will happen largely out of public view.
A Sale — But At What Price?
The crucial question is how much the site can fetch on the open market.
Earlier “soft market testing” drew several interested parties, and one bid was accepted before collapsing in early 2025. Now, CBRE has confirmed “significant interest” remains, and a formal marketing process is to be launched.
But the final sale price will inevitably fall short of the £17.9m already sunk. With build costs having soared and the market for luxury hotels uncertain, even a competitive process may leave the Council nursing a multi-million-pound shortfall.
A Political Balancing Act
The political stakes are high. Councillor Mohammed Jamil, Cabinet Member for Finance and Corporate Governance, carries responsibility for guiding colleagues through the decision. Officers Christine Marshall (Executive Director of Corporate Services and Section 151 Officer) and Adrian Chapman (Executive Director for Place and Economy) are the report’s authors, tasked with framing the stark financial realities.
The legal complexities, handled by Pinsent Masons, add another layer of difficulty. As secured creditor, the Council has the right to instruct the administrators — but must balance this with its statutory duty to achieve “best value.”
Every million pounds spent on salvaging the hotel incurs fresh borrowing costs, money that could otherwise fund frontline services already under pressure.
Risk Versus Regeneration
At stake is more than just a half-built hotel.
Council officers emphasise that “facilitating the delivery of this asset will support the economic regeneration of the area.” A completed Hilton could boost tourism, create jobs, and anchor Fletton Quays as a destination.
But regeneration dreams carry risks. To take on and finish the build, the Council would need to finance a complex hospitality operation it has little in-house expertise to manage. The risks — financial, operational, and reputational — are spelled out in the exempt risk analysis.
The alternative — stepping back and allowing administrators to market the site — may feel like surrender but could be the least damaging option.
Counting the Losses
One unavoidable truth emerges from the Cabinet papers: taxpayers will not be made whole.
The Council must already book an “expected credit loss” in its 2024/25 Statement of Accounts. The £15m loan, once pitched as a secure investment, is now being treated as impaired. Interest has been written off entirely.
At best, a sale may recover part of the principal. At worst, millions will simply be lost — money that could otherwise have supported stretched local services.
For now, the Hilton remains a hollow shell — a monument to bold ambition, pandemic misfortune, and misjudged risk.
The Road Ahead
If Cabinet approves officers’ recommendation, administrators will launch a full marketing process within weeks. A sale could be completed by summer 2026, finally drawing a line under the saga.
But until then, the empty hotel looms over Fletton Quays, a reminder of the fine line between regeneration and ruin — and a cautionary tale of what happens when the pursuit of growth collides with the hard realities of finance, risk, and secrecy.
