The row over Peterborough City Council’s decision to sell the unfinished Hilton Hotel site at Fletton Quays has deepened after it emerged that the project’s administrators are costing taxpayers £42,000 every month while the site remains unsold.
The Cabinet’s decision to proceed with the sale of the stalled riverside development has been formally called in for scrutiny, with councillors warning that questions remain over whether the move represents “best value” for the city.
Decision Under Review
The Sustainable Future City Council Scrutiny Committee is due to examine the matter on 20 October 2025, following a call-in by Councillors John Howard, Marco Cereste and Alex Rafiq.
According to the official report, “The call in was made on the grounds that the decision does not follow the principles of good decision-making, set out in Part 2, Article 11 of the Constitution, and may not represent best value.”
The Monitoring Officer ruled on 7 October that the call-in was valid, putting the Cabinet’s 2 October decision — “Fletton Quays Hilton Hotel Update and Next Steps OCT25/CAB/40” — on hold pending review.
£42,000-a-month bill for administration
While the political debate focuses on the council’s financial exposure, the report highlights that delay comes at a significant ongoing cost.
It states that each month the administrators, Teneo, are paid “£42k per month” to oversee the company that owns the stalled hotel site, Fletton Quays Hotel Ltd.
The officers’ response to the call-in notes that the proposed sale would help to “minimise any further costs being incurred,” adding that the joint-venture or partnership option raised by councillors “would result in significant delays… [and] further additional costs being incurred, which include the prolonged cost of administration which currently costs £42k per month.”
With the site standing unfinished the monthly bill is a symbol of the project’s spiralling costs and a reminder of the need for a swift resolution.
Cabinet’s original decision
On 2 October, the Cabinet agreed to “instruct the administrators (Teneo) of the Fletton Quays Hotel Ltd to proceed with the marketing and sale of the site, and by doing so ensuring that any sale achieved best value.”
The Cabinet’s direction effectively rules out the council taking on the site itself, despite a previous option from October 2024 which allowed the authority to consider acquisition if a sale failed.
When a preferred bidder’s purchase fell through in January 2025, the council commissioned further analysis before concluding that an outright sale by Teneo was the least risky and most cost-effective route.
Call-in grounds: ‘best value’ and alternatives
The councillors’ call-in argues that the decision “may not represent best value” and quotes comments made in the Cabinet meeting suggesting that completing the hotel might have been better “long term.”
During the debate, the report records that “the cabinet member for finance and governance when questioned whether we were being advised the original recommendation to see it through was still best for the council answered in the cabinet meeting ‘yes probably, but so many years down the line’.”
The call-in therefore claims that “this suggests implicitly that the sale of the Hilton now would not meet best value for the council.”
Officers’ defence: sale delivers best value
In their formal response, the council’s executive directors Christine Marshall and Adrian Chapman insist that “a number of steps have been taken to ensure the council is achieving best value as part of this decision”.
They point out that “independent specialists across a number of disciplines were engaged”, allowing “a much more detailed options appraisal to take place.”
The options examined included:
• “Teneo proceed to dispose as administrators;”
• “The council acquires then disposes ‘as is’ with constraints as to uses;”
• “The council acquires then develops and sells either immediately or at some later point (which could include doing so with a partner);” and
• “The council acquires, develops and holds the asset (which could include doing so with a partner).”
The report concludes: “Selling the site has always been a primary and optimum recommendation.”
It adds: “Throughout this appraisal process it has been clear all along that the council’s primary focus is to achieve best value.”
Financial context and risks
The document sets out stark financial warnings about the city council’s current position, stating:
“The council’s current debt levels are in excess of £0.5 billion, reserves balances are extremely fragile, and a gap still remains in the Budget for 2026/27. The council’s financial resilience is low and at insufficient levels to mitigate any future financial risks associated with this option.”
Officers argue that entering a partnership or completing the hotel could expose the authority to “build and operational risk due to complexity of running a JV.”
They warn that this approach would take time to set up, creating further months of £42,000-per-month administrative costs and adding to the financial strain.
Future use of the site
One key question raised in the call-in is whether the council should restrict how the site can be used by a future owner.
The officers’ response makes clear that such restrictions were examined and rejected because “modelling demonstrated that this was not the most financially viable option for the council.”
It explains: “This would likely result in additional significant costs and incur significant unnecessary additional costs to the taxpayer, suppress the value of the asset and create further delay with risk exposure.”
Independent valuers Carter Jonas reported that “the most financially advantageous use of the asset is as an ‘upscale hotel’ such as Hilton.”
They also advised that any alternative use “would have an adverse impact on the asset valuation.”
Scrutiny access to confidential papers
Concerns had also been raised that much of the Cabinet report was exempt, limiting member scrutiny.
The council says that “the scrutiny committee now has access to review and consider all of the previously exempt appendices, which set out detailed financial modelling, legal advice, risk analysis and valuations used to inform the recommendation.”
However, officers maintain that “the high level of exemption on this item is necessary due to the commercial sensitivity of the information contained.”
They remind members that “if a Member has inspected or received documents which contain exempt or confidential information they will not reveal the information to anyone who is not authorised.”
Legal standing
The report clarifies that the council is acting “as a secured creditor pursuant to a loan facility agreement dated 01 May 2020,” and that the administrators “must have regard to their statutory duties under the Insolvency Act 1986.”
It states that “the council is acting in this matter within its powers, including the general power of competence under section 1 of the Localism Act 2011.”
Although the land is not council-owned, it adds that the authority should still “apply similar principles, ensuring that the administrators’ disposal process is transparent and achieves best value reasonably obtainable.”
What happens next
The scrutiny committee will now decide whether to let the Cabinet’s decision stand or refer it back for reconsideration.
As the report notes, the committee can either “take no further action… in which case the original decision will be effective immediately; or decide to refer the decision back to Cabinet for reconsideration.”
Either way, the clock — and the £42,000-a-month administration bill — continues to tick.
The report concludes that a sale would help “facilitate the delivery of this asset” and “support the economic regeneration of the area.”
