The boss of the building firm sub-contracted to build the Sixfields East Stand believes Northampton Borough Council failed to protect the public purse by handing all of a £10.25 million loan to the Cobblers down when the stadium was only part finished.
The authority granted the Cobblers a loan of up to £12 million back in 2013 to complete the a revamp of its stadium and it was agreed the amount could be drawn down by the club in £1.5 million instalments once certain “trigger points” had been reached.
However, Paul Wheeler, director of the stadium builders for Sixfields, Buckingham Group Limited, has said he believed those trigger points were based on very “loose criteria”.
As a result the football club managed to draw down £10.25 million of the loan by August 2014 - at which point he says evaluators had assessed only £1.6 million worth of work had been completed on the East Stand.
He said: “I don’t think the council should have handed over - at any stage - any more money than had been certified as being spent on the stadium.
“It seems all the football club had to do was to meet very loose criteria.”
The first £1.5 million was given over on signing the loan agreement, then following tranches were given on the stadium receiving planning permission, on appointing a contractor to carry out the works, once builders had been on site for two months and another once safety regulations had been signed and implemented.
It is understood a further £1.25 million was given once work had started on plans to develop the proposed hotel and conference facility at Sixfields.
Speaking on BBC Radio Northampton yesterday, Mr Wheeler said that he felt the council had “emptied the public purse” rather than protected it by allowing the loan to be drawn down by the football club and then chairman David Cardoza.
A total of £8.75 million was passed from the football club to the development company 1st Land, which is now in administration, though to date Buckingham Group has been paid a total of £442,000, net of vat, by its initial client 1st Land Limited.
Currently Buckingham Group is still attempting to recoup the £3 million it is owed for completed stadium works from the remnants of both 1st land and County Developments (Northampton) Limited, the David and Anthony Cardoza owned company which took on the stadium development once 1st Land folded.
Mr Wheeler said the council’s trigger points were not rigorous enough.
He said: “This venture was widely publicised as being a joint venture between the council, the football club and the County Group (of which 1st Land was a part of).
“If you are in a joint venture and you are the party putting up the cash you surely want to make sure your investment is being protected?”
Leader of Northampton Borough Council, Councillor Mary Markham (Con, Park) said the trigger points were written into the loan contract after undergoing proper scrutiny.
She said: “They were set up and agreed by legal teams and finance teams and went through two audits. Nobody said they weren’t fair.
“But this is why I have instigated an investigation and external auditors. They will examine all our procedures and processes.
“There may be criticism from that, but I can assure you that we will make that public and any recommendations they make, we will implement them.
“Did we make a mistake? I don’t know, but this is why KPMG (the auditors) are looking at it.”