NBC – Sixfields. Is This The End Game?

NBC – Sixfields Is This The End Game

During the last month I’ve refrained from blogging which gave me time to look back and reflect on some of the issues I have blogged on in the past.

One such issue was that of the loan made by Northampton Borough Council (NBC) to Northampton Town Football Club, (NTFC), or more specifically the loan that was sanctioned by the then Leader of the Council which was universally supported by his Cabinet.

The reason I revisited it was two fold, firstly because it was flagged up as the article I wrote that was the most read of all of my articles, and the second that the conclusion to the issue has yet to be reached.

Time for reflection is a wonderful thing and so I’ll begin back at the beginning.

In 2015 I wrote an article raising issues around the governance arrangements of a £12m (later to be £10.25m) loan given to NTFC.

The issue I raised because of the reluctance of the then NBC administration to provide answers to questions that as a NBC Councillor I was entitled to ask and given the size of the loan which was taxpayers money I thought necessary.

Little did I know what would happen next and the absolute chaos it would cause or the level of abuse I would receive from supporters of NTFC and the misinformation levelled at me by supporters of the Leader of the Council.

Whilst the questions I asked in my blog were in themselves uncontroversial (or at least they should have been) it clearly touched a chord with some and as a result I started to receive unsolicited emails outlining not only concerns but making quite detailed accusations of possible wrongdoings.

As a result I forwarded the emails to the NBC and after being informed by members of the Cabinet of the time via a third party that the Leader of the Council regarded them as not worth his time and claiming that they were made up.

Well it turns out that the “Whistleblowers” were correct to warn that the money was not being directed to what it was provided for and the result is that Northampton taxpayers have been left to pay it off, or as the NBC Finance officer recently said it may have to be written off.

As for those who abused me – and made accusations against me for informing the NBC Senior Officers and putting them in touch with the “whistleblowers all I can say is – ……………..

I still wonder even now why the political leadership at the time ignored the very detailed information that was provided to them, unless of course they either knew or had an inkling that something was wrong.

Well here we are these four years on and after a very professional investigation by the police it has now been passed to the Crown Prosecution Service for a decision on who (if anyone at all) will be prosecuted and what charges will be levelled at them.

We live in interesting times but I wonder if anything would have happened had it not been for BBC East investigative journalist Matt Precey and his team having taken it up and pursued it against all attempts to prevent them by the Leader of the Council.

It is easy to criticise journalists, in fact it now appears to be a new national sport, but there is little doubt that as Matt showed good investigative journalism when done well is undeniably in the public interest.

The taxpayers of Northampton may never get their money back but there is still hope that those responsible will be held to account.

The Whistleblowers Information….

NTFC and Sixfields Development are important to Northampton

Update 11 November 2015

I have been asked to republish the following article but feel it appropriate to make a number of observations.

When I published an article in March asking questions on what governance arrangements were in place to monitor the £12million loan to NTFC from the NBC and what it was being spent on given the fact that work on the East Stand had been stopped for over 5 months it resulted in a number of members and supporters of the football club contacting me with information and allegations that as a Councillor at the time I wasn’t prepared to ignore or worse still sweep under the carpet.

Sadly, and I am grateful to my former Conservative colleague who for obvious reasons I will not reveal the name of who tipped me off, the Borough Council Conservatives were intending to use the fact that I had sent the information and my concerns to the NBC as part of their election strategy to infer that I and the Labour Group were anti the Cobblers.

As a result I published the following article on the 31 March 2015 with the names redacted to protect those who raised the concerns from attacks and abuse.

The full information complete with names was sent to the NBC.

As we now know a number of the allegations have come into the public domain some six months after my original article and has raised serious questions about the political decision to provide the loan and the apparent lack of governance and oversight of the management and use of the funding.

As a committed Pompey supporter who saw the same happen to my club I have great sympathy for the genuine Cobblers supporters who have time and time again been promised by the owner and the previous Leader of the Council David Mackintosh that the clubs financial future was now stable and guaranteed or as he put it at the time “I always keep my promises”.

I hope for the sake of the supporters that a resolution can be found to ensure the football clubs survival, however the fact that the £10.25 million loan has apparently been ‘spirited away’ raises concerns not only for the football club but also for the council tax payer.

Put simply the repayment of the 10.25million with interest would be over £12million.

There is in the region of  88,000 Council Tax Payers in Northampton paying £147 a year in Borough Council Tax which amounts to almost £13 million a year.

In effect a whole years Northampton Borough Council Tax has ‘gone astray’

Who is responsible is to many tax payers facing cuts to front line services the major question?

In my view it is The Leader of the Council and his Cabinet at the time who put political self-interest and ambition before their responsibility to the tax payer.

The current position as I understand it is that a new owner may be in the process of buying the football club and will as part of an agreement with NBC pay £10.25 million.

This however is a political illusion created and spun by the Council that it will be the loan that is being paid back when in fact the original loan would still be outstanding which is why I believe that the Council should continue to immediately instigate legal proceedings against those who had access to the original loan.

The problem of course is one of trust.

Questions are now being asked about links between those who appear to have financially benefitted from the loan and donations both monetary and in kind to the Northampton  South election campaign that saw David Mackintosh elected as the MP.

I’m sure there is more to come out as this issuprogresses but the simple fact is how can the public trust those who were responsible for this whole mess through either ignorance, incompetence or worse be trusted to now correct the mistake?

It is why those Cabinet Members responsible for the initial decision and lack of oversight and governance who remain in control of NBC should consider their position and step aside to allow a new group untainted by the issue to take control.

Article First Published on 31 March 2015

It never ceases to amaze but certainly doesn’t come as a surprise that the Northampton Conservatives under Cllr Mackintosh are now spreading rumours that I am leading a campaign against Northampton Town Football Club and objecting to the £12 million loan he provided the club.Nothing could be further from the truth.

For those who are interested and believe the rumours I would ask you to read my previous blogs on the Cobblers in which I make it clear that I fully support the Football Club.

What I have done is make public the questions and concerns that members of the public, many of them supporters of the football club who attend every game at Sixfields have raised with me.

The question I had to ask myself was should I ignore the information and concerns raised and sent to me which if true would have when inevitably revealed led to accusations that I had ‘covered them up’ or should I pass them on to NBC for them to conduct the appropriate investigation into the allegations.

In an age when far to many cases of Councillors, Councils and those involved in front line politics at both local and national level appear to believe that covering up or ignoring people when they raise concerns is acceptable I can firmly state I’m not one of them.

It is why because of the seriousness of the allegations and because the loan was from the public purse I chose the latter course which the Conservatives are now shamefully misinterpreting as opposition to the Cobblers.

It just shows the depth to which Cllr Mackintosh and the Conservatives have sunk in his attempt and their attempt to discredit those who they dislike and oppose.

Will it stop me bringing and acting as the conduit for public concerns over the way they have acted to the attention of the Borough Council Chief Executive and Legal team?

Will I join the Conservatives in covering up and deceiving the public as they did over Abington Street, Bus Station, Grosvenor Centre, Delapre Abbey and Sekhemka amongst many?

The answer is a resounding NO.

It is, in my view absolutely essential that the allegations are investigated in order that those referred to in the allegations are exonerated if they prove to be found to be untrue and vexatious.

It is in the interest of the Football Club, NBC, the politicians who took the decision to award the loan and most of all the people of Northampton and Supporters of the Cobblers to lift any and all suspicions so the club can move forward.

Just to be clear I have in this blog attached the letters I have written to the Chief Executive and this matter is now in the hands of NBC whose legal department are exemplary in their honesty and integrity and who I have absolute confidence will take the appropriate actions to reach a fair resolution to the allegations

 

 

 

Mr David Kennedy

Chief Executive

Northampton Borough Council

Guildhall

Northampton

11 March 2015

 

Dear David

 

NBC -NTFC Loan Agreement

 

My apologies for the length of this letter but I believe the subject is of such importance that it is necessary to provide as much information as possible.

 

I have received information and an unsolicited request from members of the public to respond to and investigate claims that the loan of £12 million by Northampton Borough Council to Northampton Town Football Club may have been awarded without due diligence by the Borough Council into the purpose and use of the funding.

 

It is my understanding that the loan was provided by Northampton Borough Council at a preferential interest rate having been sourced from the Public Works Loan Board, PWLB, for the express purpose of the redevelopment of Sixfields Stadium.

 

It is also my understanding that,

 

In the event of the formal insolvency of Northampton Town Football Club Limited, there are a number of potential scenarios as to the position with the Stadium;

 In the event of the club going into Administration, perhaps the most common form of situation with professional football clubs in recent years, the Council as landlord would not have the right to take action to regain possession of the property, even if it wished to, without either the agreement of the Administrator appointed or of the Court. The rights of the Athletics Club against the Company (In Administration) would remain extant.

 In the event of the Club going into (a) administrative receivership or (b) entering into a company voluntary arrangement with its creditors or (c) going into liquidation then in all these circumstances the Council would have the option (but not obligation) to forfeit the lease. If the Council chose to pursue this course of action, in strict legal terms, the licence (not being a legal interest in land) would probably be held to be ended and the athletics club (unlike a legal sub-tenant) would not have the formal right to apply for relief from forfeiture. Of course, the Council could in that position choose to offer a new arrangement directly to the athletics club.

 In the event that the company went into voluntary or compulsory liquidation and the liquidator chose to disclaim the lease, then the Council would have no practical option but to accept back the premises. The athletics club as a licensee (as opposed to a sub-tenant who has rights) would probably lose its legal rights under the licence as a result. However, the Council as freeholder in control of the property could again choose to make arrangements direct with the athletics club.

2.   There is an absolute bar within the Lease, preventing the lease of the Stadium being assigned to any other party. Consequently, depending upon the precise circumstances of any specific insolvency, if the appointed insolvency practitioner wished to sell the assets of the business to another entity they could not include the lease of the stadium without the Council’s express consent (which it could unilaterally choose to withhold). If the lease remained ‘live’ in those circumstances (where the Council did agree to the assignment), the respective existing rights/obligations of the Football Club and of the Athletics Club would remain valid between the new tenant and the athletics club.

 In the event that the Stadium were to come back into the immediate control of the Council as a result of one of the circumstances set out above, then beyond any immediate relevant measures necessary to ensure the security of the building and consequential public safety, any additional measures would clearly be a choice for Members to make at that time and in those circumstances. This is understood to have been the position since the lease was granted in 2004. There are no specific contingency plans in place to deal with this event.  

In the event of NTFC Limited’s lease being determined, whether at the election of NBC or not, there are no specific contingency plans to provide direct support to the Athletics Club. This has, so far as I am aware, been the position since 2004 when the Licence was granted to the Athletics Club. As per 1. above, it would be for Members to ultimately decide what level of support the Council might wish to offer to the Athletics Club in those circumstances.

Generally, it is not the stance of the Council to make specific plans in the event of insolvency of any of its many tenants. Whilst it is acknowledged that these premises are of greater size, public interest and potential value than many other properties the Council owns, the Council does not individually assess the risk of any particular business tenant failure unless there are clear indications of impending failure e.g. accumulation of substantial rent arrears or failure to undertake major works required protect the safety of the public and or to protect the value of the Council’s interest in the property.

My understanding is that this may have changed with regard to the Athletics Track since the announcement of its relocation to Moulton, but that it remains extant regarding the Stadium.

The concerns raised by members of the public have arisen by the ongoing delays and issues of the redevelopment of the new stand and use of the loan in which they question whether due diligence and the correct governance was carried out prior to the loan being agreed.

I attach the emails received and will provide the names and addresses to the appropriate people as required.

Email 1

(Name and address of sender redacted to be provided as appropriate)

Dear David,

 

ALL THE BELOW IS WITHOUT PREJUDICE

 

There seems to be a lot more about the £12 million loan given to Sixfields than everyone thinks.

 

I believe a lot of questions need to be asked about the location of these funds and what it has actually been used for!

 

I have asked a lot of questions and below is some of the information I have gathered and feel someone needs to investigate where tax payers money has gone.

 

The Buckingham Group Contracting Ltd the contractors building the stadium stopped work because they had not been paid and I understand they were taking legal action against County Development (Northampton) Limited for non payment of £1million.

 

County Development (Northampton) Limited was formed with a Partnership between xxxxx  his xxxxx and County Group who’s offices are in Bushey, Hertfordshire.

 

The directors of County Developments (Northampton) Limited are xxxxx.

 

xxxxx andxxxxx both resigned from the board on the 9th February 2015.

 

Interestingly there is another person who’s name was not on the board of directors who was heavily involved and he is xxxxx the owner of County Group where his xxx xxxxx and xxxxx are both directors.

 

xxxxx set the deal up with xxxxx and had access to the bank account that had the £12million pounds.

 

Someone needs to investigate this bank account and see who has been using the money and what for! I have heard that xxxxx has used £2.7million for deals and personal spending that have nothing to do with the Sixfields redevelopment and when xxxxx found out in August 2014 an almighty argument broke out.

 

Both xxxxx and his xxxxx immediately resigned from another company partnership they had set up with xxxxx. The company was called County Cemetery Services Limited.

 

I have heard part of the £12million loan was used to set this company up and I believe this was in the region of £150,000.

 

I believe xxxxx stopped any further money going out of the account until they could find out where the £2.7million had gone and that is why the contractor was not paid on time and downed tools at Sixfields.

 

I also found out this week that xxxxx was leasing a Bentley at the cost of £3000 per month which was going through the County Development (Northampton) Limited. Tax payers money used to pay for a Bentley !!!!

 

And there needs to be an investigation into the funding for his extravagant spending, he went on an 8 week cruise over Christmas where he took members of his family which I understand cost in the region of £95,000. Where did this money come from??? Considering his company County Group didn’t have enough funds in their bank to pay staff wages prior to Christmas.

 

He has also been carrying out major refurbishment works at his house which must be costing a fortune. Could this be part of the missing £2.7million?

 

Also it looks as if xxxxx may have been using the money for activities not associated with the Sixfields development.

 

xxxxx has demolished his house and is building a new 6 bedroomed house with an indoor swimming pool at a cost of over £1million pounds. Where has the money for this come from as he had a very large mortgage on the house he demolished.

 

Details of the house can be found on Daventy District Council planning website Planning permission reference: xxxxx and the house address is: xxxxx

 

The above is only information I have gathered and I have not seen any of the bank accounts but I pay my Taxes and worry that these people are cheating all of us and getting away with it. I may be wrong but these stories seem to be coming from all directions and I always believe in no smoke without fire.

 

The whole loan set up needs to be reviewed and someone needs to do an audit on the accounts of County Development (Northampton) Limited.

 

You may also find out that members of the board of County Development (Northampton) Limited were paid a consultancy fee, which I have heard to be a very large amount of money. What was this for or was it just a way of getting their hands on the money at an early stage.

 

I do hope that someone looks into this and if any fraud has taken place then these people are dealt with and don’t get away with the misuse of tax payers money. I know it is hard to prove a lot of the above but surely if this is taxpayers money lent to a company there should be some checking procedure or audit to establish that the money is being used for what it was intended.

 

Email 2

 

From: Name redacted available when required

Sent: Wednesday, February 25, 2015 10:11 AM GMT Standard Time

To: David Palethorpe (Cllr)

Subject: Sixfields Stadium – The £12 million question?

David, 

 

I have found out a bit more information. 

 

The loan money given to Sixfields was put into the bank account of ‘1st Land Limited’ company reg number 08653737 and the company is owned by xxxxx and he is the only Director. 

 

1st Land Limited was put into Administration on the 2 January 2015, so the question now is where is the money now and how much of it is left !!

 

On another point, I have spoken to the Architect who did the work for xxxxx house and he said he was paid by 1st Land Limited but the invoices had no reference to xxxxx house. Everything was referenced as Northampton FC. He is sending me the invoices as I told him I am doing an audit on the accounts. I will forward these as soon as I get them.

 

Email 3

 

From: Name redacted available when required

Sent: Monday, March 02, 2015 11:28 AM GMT Standard Time

To: David Palethorpe (Cllr)

Subject: RE: Sixfields Stadium – The £12 million question?

David,

 

Over the weekend I have found out some more information.

 

The fees paid to xxxxx and xxxxx came to a total of £1million and this was a split of one of them getting £600,000 and the other getting £400,000. What was this money for?

 

Also Buckingham Group are taking criminal proceedings against xxxxx of 1st Land Limited for non payment of £2million for the works carried out at Sixfields.

 

The cost of the works to xxxxx house came to approximately £300,000 and this money came out of the £12million loan.

 

The Bentley xxxxx is using is leased through Northampton Football club but I believe it is paid for out of the £12million loan at a cost of £2600 per month not the £3000 I originally thought. 

 

It was also confirmed to me on Friday from another source that the amount xxxxx has used it £2.7million.

 

I have brought the concerns expressed to me to you attention in recognition of the seriousness and the importance of the statements and claims put to me in my capacity as a NBC Councillor.

 

I have also brought them to your attention so that if in the future there is any question of a failure of probity and governance in the process and decision to award a £12 million loan to NTFC at preferential interest rates not available from commercial sources I have carried out my duty as an elected representative on the Council.

 

I am concerned for the following reasons,

 

1. Sixfields Stadium whilst on a long term lease to the football club remains an asset of Northampton Borough Council and the issue that have stopped the redevelopment of the East Stand is therefore detrimental to the asset.

 

2. Was the information in the past three annual financial audits have warned that “there is concern about whether the business is viable” with a net worth of -£7.4 million and the fact that NTFC has had County Court Judgements against them in recent times taken into account when  taking the decision to loan the club £12 million from NBC funds.

 

 3. Has contractual and monitoring processes been put in place to ensure that the funding is spent on the development of the stadium for which the public were led to believe it was provided for?

 

4. The claims from members of the public raise questions about the ethical, legal and business practices of those involved with whom the loan has been agreed that if proven to be true would damage the reputation of Northampton Borough Council.

 

The claims and issues raised unfortunately bring into question the integrity of a number of people and organisations involved in the loan transaction which I believe it is in the public interest to resolve as soon as possible to avoid unfair and unjustifiable accusations continuing to be made against them

 

As an individual I clearly do not have the resources to carry out an investigation into the validity of the claims and issues brought to my attention.

 

In order to address the concerns and issues raised I formally request that NBC as the responsible organisation for the decision to award and governance of the £12 million loan to NTFC implement an investigation into the claims and issues raised.

 

Regards

 

David Palethorpe

Cllr – Billing Ward

Northampton Borough Council

 

 

Copy. 

Mr Francis Ferdinand, NBC Legal Officer

Cllr Les Marriott, Leader of Labour Group, NBC

Cllr Sally Beardsworth, Leader of Liberal Democrat Group, NBC

Also copied to members of the public who raised the issue with me. And 

 

 

Mr David Kennedy

Chief Executive

Northampton Borough Council

Guildhall

Northampton

22 March 2015

 

Dear David

 

NBC -NTFC Loan Agreement

 

Further to my letter of the 11 March 2015, I have now received the two emails attached regarding the subject of the use of the £12 million loan to NTFC from Northampton

Borough Council.

I would stress again that these are unsolicited emails and as such information that has been brought to me attention as a NBC Councillor and that I make no comment or judgement on whether the information being provided is either valid or reliable.

However in the current climate of people in public life being accused of hiding and covering up information provided to them I believe it is right to bring the allegations to your attention.

They are allegations that in my view are serious enough to be independently investigated and brought to the attention of the PWLB who provided NBC with the £12 million loan and the independent auditors for the following reasons,

1. If the allegations are false it needs to be clearly established that they are so to clear the names of those mentioned in the information provided to me. Which I have passed on to the Council, it will also if proved to be false protect the reputation of the Council and officers involved in the loan process.

2. It is important to the People of Northampton that the political decision to award the £12 million loan to NTFC was taken having received and taking into account the legal and professional advice provided by the officers of the Council who I fully expect carried out a due diligence examination before the loan agreement.

3. If due diligence has not taken place or if advice has been ignored that action be taken to receive the situation including withdrawal of the loan and it being ‘ clawed back’

I recognise that this is a sensitive political  and professional issue for NBC and one in which

I am already aware that following my previous letter to you rumours are already being spread amongst NTFC supporters that I personally and on behalf of the Labour Group have made allegations against those named in my letter to you.

I’m unsure who or how this situation has arisen but if it continues I will publish the full text of my letters and the information to make my position very clear.

Let me be clear that the Northampton Labour Group have always and continue to fully support

the aims and ambitions of Northampton Town Football Club.

Let me also be clear that I continue to support the Football Clubs ambitions, nevertheless I cannot ignore the concerns and information/ allegations that have been brought to my attention and will continue to forward them to NBC who have the resources and capacity to conduct any investigation that may be required.

Regards

David

David Palethorpe

Cllr – Billing Ward

Northampton Borough Council

Email 1 Received 

RE: NBC -NTFC Loan Agreement

13 March 2015 17:49

 

David,

 

Thank you for your email and the up date on how you are progressing with this issue.

 

I was told yesterday that xxxxx is going to give xxxxx £800,000 to pay him off so he has no more involvement with the sixfields scheme. 

 

I am a bit concerned as xxxxx of County Group is not a director of County Development (Northampton) Limited but somehow seems to still have a financial connection with the Sixfields. 

 

Part of the deal with the £800,000 pay off will mean the money xxxx has already squandered away will be written off as long as he agrees to relinquish all ties with Sixfields. 

 

How on earth can a man who has already taken £2.7million out of the pot now be given another £800,000. This means this man has got his hands on £3.5m leaving £8.5m for the development of the site.  This is also not including the fees paid to xxxxx and xxxxx.

 

I think the investigation needs to move quick before anymore money is lost. 

 

Regards 

 

xxxxx

 

Email 2 Received

 

RE: NBC -NTFC Loan Agreement

13 March 2015 18:10

 

David,

 

Further to my email I just sent I have found out the tie that xxxxx has with Sixfields. He has an option agreement that if planning permission is granted then he is part of the deal. 

 

Therefore xxxxx has to buy xxxxx out of this agreement to get him away from the scheme. I would expect this option agreement to be in the name of County Group which is xxxxx main company. 

 

I expect the £2.7m and the £800,000 pay off will be a lot less than the potential profit share if the site is fully developed but I know xxxxx has no money and will jump at the chance to get some of the money and have the £2.7m written off. 

 

I have someone trying to get me more information and will let you know this as soon as I hear anything. 

 

Regard 

xx


 

 

Copy. 

Mr Francis Ferdinand, NBC Legal Officer

Cllr Les Marriott, Leader of Labour Group, NBC

Cllr Sally Beardsworth, Leader of Liberal Democrat Group, NBC

Also copied to members of the public who raised the issue with me.

 

 

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