Leeds Council confirms loan of £1.8m of public money to Leeds 2023 Year of Culture organisation

The interest-free loan, which was signed of by senior councillors on Wednesday, covers the expected tax relief the Leeds Culture Trust is expected to receive from the government next year.

The Labour administration says the move allows the cash to be spent on 2023’s cultural celebration, which as of Thursday has just 100 days left to run.

Tax relief can only be claimed retrospectively and so organisers were keen to avoid a situation where they ended up with £1.8m next year with nothing to spend it on.

But the move was criticised by the council’s Opposition Conservative group leader, Alan Lamb, who claimed it put Leeds taxpayers “on the hook”.

Speaking at the executive board meeting where the issue was discussed, Councillor Lamb said: “Earlier this year, I was admonished for suggesting we were heading for a damp squib with the Year of Culture.

“Perhaps I overstated it. It’s been a disappointment with some notable exceptions.

“But I’m wholly opposed to putting the council’s money at risk.

“Just to be crystal clear, if that money is not forthcoming from HMRC then the council and taxpayers of Leeds are on the hook.”

The council has received legal advice over the move, though none of that has been made public.

The local authority has said, however, that it has been assured the tax relief will arrive next year and the loan can be repaid in full.

The trust did approach the Department of Culture, Media and Sport for the cash but was turned down, the meeting was told.

Councillor Lamb claimed however that the loan amounted to “non-essential spending”, which is currently frozen within the council amid a £34m overspend on its budget already this year.

But Councillor Jonathan Pryor, Labour’s executive member for culture, said: “Leeds 2023 as a year has faced the same financial challenges a lot of other places have, around inflation and difficulty raising money.

“Actually what this loan allows them to do is to spend the money in-year over the next 101 days, rather than ending the year in 101 days and having the money left over.”