Friday, 11 October 2013

The Stadium again - and that sinking feeling

With £31m of savings to be found over the next three years, '100s' of job losses, community assets such as parks, playgrounds and playing fields in the immediate firing line and charges for sport activities rocketing, it looks like the council's commitment to one particular sporting venture, the Parc y Scarlets stadium, will continue to find favour.

Monday's Executive Board meeting features the proposed 'asset transfer' of public amenities as well as the increased charges. Alongside these Items is the long expected 'Presentation from Scarlets Regional Ltd'. It was expected to be presented to full council and in front of the cameras, but I imagine the Executive Board and raft of officers will prove to be a much more agreeable audience. It will probably eventually go to full council but we all know what happens there
The three years is up since the council waived the 'sinking fund' payments and slashed the interest on the £2.6m loan, then, like now, it was just before the council budget. The recommendations within the council officer's report are that this situation will continue, more or less unchanged, for the foreseeable future.

The interest on the loan will be made variable but still at a very reduced rate; contributions by the club to the sinking (maintenance) fund will be set at an insufficiently very low rate of £10,000 per annum; and the threshold of income before the club has to pay rent to the council has been reduced giving a 'potential' for future income for the authority. It's not even clear that the council will bother them with the last point. Whoopee. In return the Scarlets will have to pose for a few pictures, to be arranged at their convenience.

Given that 'the financial plight of the club is well documented' it is highly unlikely any rent will be paid or that the financial situation will improve in the near future. Although the recent deal between the council and the club to sell of some land to Marstons, which supposedly resulted in a figure in the region of £400,000 for the club is not mentioned in the report. (Further details of this deal have been refused through Freedom of Information)

The council's Audit Committee Members expressed considerable doubt at its last meeting that the club would be able to return the lease to the council should it become insolvent, given that it has listed the stadium fixtures and fittings as its assets, and has no legal agreement that, if it does become legally insolvent, the 150 year ground lease, (for which the club pays nothing) returns to the council. The lease could be sold on by the liquidators with no control over this public asset.

It is perhaps worth noting that none of this discussion, which took place at the Audit Committee meeting on the 27th September appears in the minutes.

I understand that there is still no word on the legality of the Council investing so much in a private company and I also understand that the Information Commissioner is looking into their refusal to reveal the mysterious legal advice of why they are exempt from EU State Aid rules.

When the full council approved the original financial package back in 2007, the serious doubts and advice of the independent auditors was swept aside and the majority of councillors swallowed the very positive assurances from council officers and the club that the future was extremely rosy.The statement that "The council will have no ongoing liability for the running of the club in the stadium" was wildly inaccurate.

You may recall an earlier blog post of mine which shows how the council is supporting Scarlet's Regional Ltd in any way it can.

The upshot of this is that whilst the council consider slashing public sport amenities and jobs with one hand, it will continue to pour millions into the 'won't cost the taxpayer a penny' Stadium with the other. Every penny spent on the stadium is one less for frontline services.

Exactly how the taxpayers of Carmarthenshire became lumbered with this vanity project from the start is something else the Wales Audit Office should consider having a long look at.

No comments: