For six years, Trust board member Kevin Simons has personally tracked the saga of the 'missing millions' Northampton Borough Council loan to Northampton Town Football Club.
Kevin will tonight address NBC's full council meeting and will draw from the following statement, which has been issued in full to all borough councillors.
STATEMENT
I have been a member of the Northampton Town Supporters Trust since 2015 and a board member since late that year.
At that point, the club was facing a winding-up petition and the future of League football in the town was under serious threat.
That the club had been put in such a perilous position could so easily have been avoided as a number of Trust members and other supporters had publicly raised questions about the financial shenanigans surrounding the loan and associated redevelopment of the East Stand.
Many had openly questioned the corporate construct behind County Developments and First Land and had been digging deeper into the affairs of the club's then owners and their business associates.
In that context it beggars belief that this council conducted minimal due diligence; in the corporate world we might call it “back of a fag packet”.
It was clear from reading council meeting agendas, pre-reads and minutes that the loan arrangement and the commercial negotiations surrounding it that this was a fiasco in the making.
An absence of clear delegations of authority; negligible documentation of discussions and conversations between NBC officers and the loanees; next to zero control on release of funds and staged payment gates; the absence even of a design statement or technical drawings for the new East Stand; the absence of any sort of business case or business plan; absence of monitoring and scrutiny; absence of any sort of corporate or personal guarantees. I could go on.
And all this when the football club company had already accumulated £7m of net debt, which I shall come back to.
In early 2014 (I stress early 2014, March) I submitted a Freedom of Information request to NBC requesting copy of the loan agreement.
That request was initially rejected by the then Senior Information Governance Officer at the Council on the grounds that it was a “commercially confidential agreement”. Now where have we heard that before?
However I challenged this and made it clear that I was quite prepared to escalate the request; initially I was advised that the release would require the consent of the counterparty, that is David Cardoza.
Finally the loan agreement was released to me under FoI on 1 May 2014, although I might add that it was not published on the NBC website for several more months.
At this point, having made certain Trust board members aware of the loan terms and its implications, ever more questions began to emerge from a number of fans as to what was going on at Sixfields.
This culminated in the We Want Answers campaign, although it is true to say that the vast majority of the fans remained trusting and supportive of the owners and in disbelief at each turn of events.
On 25 March 2015, the very same day that David Mackintosh announced that he was stepping down as leader of NBC to focus on his general election campaign, I wrote to Roger Helmer MEP, questioning the whole process surrounding the granting of the loan, as most observers were under the impression that the loan from the Public Works Loan Board had been sourced from EU funds: I quote:
“Not only does this raise questions about NBC and its own controls - I have seen the loan agreement as a result of a FoI and there is a crass lack of conditions placed upon NTFC - but it also casts doubt on whether EU funds have been used, disbursed, and controlled appropriately in accordance with EU funding rules . The only hook appears to be that NTFC repay the loan (neither David Cardoza nor other shareholders are jointly and severally liable for the loan despite the fact that the football club company has net debt of in excess of £7m, virtually no assets, and just one main shareholder). My understanding is that in this type of scenario where EU funding is greater than €5m, the construction project should have been put out to tender, which it was not.”
I never received a reply from Mr Helmer. Everyone at NBC appeared to be turning a blind eye to the metaphorical smoke billowing from Sixfields: a halt to construction, spurious excuses being rolled out by its owners at every turn. There was smoke, but no-one at NBC seemed to recognise that there might be a fire behind it.
I must say that many other actors failed in their duties: the NTFC board directors were seemingly blindsided into signing documents on the basis that “they were a mere formality”. That should serve as a warning to anyone serving in public office and as corporate directors or officers should read and, more importantly, understand what they are signing.
The Trust did have a nominal director on the Board of the club at that time, but it was clear that the club was for all intents and purposes being run behind closed doors by a cabal of its owners and their business associates.
The lesson has certainly been learned at the Trust, which it is worth pointing out is regulated be the Financial Conduct Authority and as such is subject to a much higher governance standard than most non-FCA regulated entities and probably higher than local authorities.
The Trust wholeheartedly welcomes the KPMG report and the accompanying PIR. There are two key points to come out of it.
Firstly, the past actions and the consequences of those actions.
Regrettably the whole fiasco has stained the Club for a generation. Even now, the first question most local people ask – and let’s not forget, taxpayers who may not be regular supporters – when talking about the Cobblers is when are we going to get that money back and when are the court cases going to happen?
The Trust recognises that formal charges are yet to be brought by the CPS, but those criminal proceedings do need to happen and allowed to run their course.
We are sure that the best, but unlikely, hope of recovering any of the £10.2m will be through a consequent Proceeds of Crime sequestration, if indeed any of the money can be traced and assets seized.
However, should any councillor or officer be implicated as having some responsibility in this matter but is not subject to proceedings brought by the CPS, then this Council has a public duty to consider what alternative actions might be appropriate for the failings which the KPMG report has deemed to have been unlawful.
It is not acceptable, if it is correct as reported by the NN Journal, that the CPS proceedings should suffice and that civil action should not follow on grounds of cost.
Nor will it be acceptable to brush this under the carpet of the new West Northants Authority, which surely needs to commence life with a clean slate?
Secondly, we are of the view that the PIR and its recommendations do not go far enough.
The recommendation appears to single out loans as the sole subject of their recommended protocols, procedures, scrutiny, monitoring and controls.
Looking forward, commercial deals made in the name of the local taxpayer should be open to public scrutiny. At the very least, we should expect that all deals are open to competitive bid where practical to do so. And especially where we have commercial counterparties with deep local interest be it for example sports clubs, bus companies, or highways contractors.
The events of 2013-15 should recognise that “commercial confidentiality” is not an excuse.
Further, delegations of authority to negotiate, common in the private sector, still appear to be lacking; all meetings with counterparties should be recorded or at the very least be minuted independently of the counterparty.
I do not have adequate time to cover all the additional protections that we might suggest. But a repeat of this sorry affair must never be allowed to happen.
