£150,000 levelling up grant awarded to Tory donor’s amusement centre in Hastings

A £150,000 grant from Boris Johnson’s flagship levelling up towns fund was awarded to an amusement centre launched by the Conservative donor Lubov Chernukhin, raising questions about whether public money has gone to projects most in need of financial help.

Chernukhin, a businesswoman who has given more than £2m to the Conservatives since 2014 and is married to a former Russian finance minister, co-founded the Owens entertainment centre in Hastings, East Sussex.

The centre received £150,000 from the government’s towns fund in October after a tender process, through a company called C&O Entertainment. A further £250,000 went to the developer behind the refurbishment of the former Debenhams building in the seaside town.

It includes several restaurants, a bowling alley, immersive experiences, virtual reality rides, an oddity museum and amusement arcade. There is no suggestion of any political consideration in the award of the grant.

Chernukhin launched the project in October 2022 as a joint venture with an entertainment entrepreneur, Graham Owen, and she has been a director of C&O Entertainment since February this year. It is owned by a company called Triple 8 Holdings, held by two senior partners at a wealth management firm, and is believed to be at least in part owned by the businesswoman.

Owen does not own any shares in the company. Despite giving his name to the attraction, he is now believed to have left his role at the company.

A spokesperson for Chernukhin said Owens Entertainment was opened with a vision to “revive the British high street and stimulate local economies through the establishment of family-orientated entertainment centres”, with an estimated 100,000 visitors since launch. They said the centre had provided jobs by hiring 45 contracted staff members and space for four concession holders.

The spokesperson confirmed her involvement in C&O Entertainment but did not respond to a question about its ultimate ownership. She said Chernukhin “was not involved in any way whatsoever in the grant application process” and that it was driven by the developers and the Hastings towns deal board without her knowledge.

Last September a finance manager from Owens Entertainment gave a presentation to the Hastings towns deal board setting out that “development of the entertainment centre is going well, and it is hoped it can be officially opened on or around 14 October”.

In the minutes, it was recorded that the project by this time was already close to completion and the extra money was used to “extend the centre’s originally planned offer, therefore allowing for more attractions to be created”.

The bid was not part of the original towns fund allocation process but was added in summer 2022 by the Hastings towns deal board after another bidder pulled out and the tender was re-run. It was subsequently approved by the Department for Levelling Up, Housing and Communities and the money was paid in October 2022.

Hastings council said the business case for the town deal bid by Owens was confidential but had been “independently assessed against various criteria including jobs created, amount of public and private investment, wider economic impact in the town and value for money and deliverability”.

“The funding for Owens Entertainment was to enhance and extend the number of entertainment offers. It was also bringing back into use a large former Debenhams building which had been empty for more than a year,” a spokesperson said.

“There were no political considerations in the decision to support a project that brought a large potentially long-term empty building back into use so quickly.”

Chris Bryant, the Labour MP and chair of the House of Commons standards committee, called into question whether the project was deserving of the money, saying that “so-called discretionary funds” were a cause of concern. “Especially now we know the company of the largest female donor to the Conservative party has benefited in this way. Public funds should go to those areas most in need,” he said.

Chernukhin, a British citizen, is a former banker who has been under scrutiny over her links to offshore wealth and her husband’s former membership of Vladimir Putin’s government until he was sacked in 2004. Labour has previously called for the Conservatives to hand all money given to the party by Russian-linked donors to humanitarian causes, including more than £2m given by Chernukhin since 2014.

On her donations, Chernukhin’s spokesperson said: “It is correct that Lubov has donated more than £2m to the Conservative party, and all such donations have been properly declared in accordance with Electoral Commission rules. As a British citizen, Lubov is entitled to make donations to political parties as she sees fit, and any suggestion to the contrary would be patently xenophobic.”