Opposition to try and halt plans to use extra £500,000 in recovering £10.25m Northampton Town loan

Opposition members are considering 'calling in' Northampton Borough Council's decision to use an extra £500,000 from reserves to recover missing millions to loan to the Cobblers, a cabinet meeting heard last night.

Thursday, 14th July 2016, 6:00 am
Updated Thursday, 25th August 2016, 4:32 pm
Northampton Borough Council's cabinet has approved plans to use £500,000 from its reserves to recover the money loaned to the Cobblers.
Northampton Borough Council's cabinet has approved plans to use £500,000 from its reserves to recover the money loaned to the Cobblers.

At the meeting the Conservative cabinet approved the money to be taken out of it’s long term savings to help with costly legal fees in recovering the £10.25 million loaned to Northampton Town Football over 2013 and 2014.

That loan was meant to fund a stadium development, though only around £440,000 was ever passed directly onto the builders.

At the cabinet meeting several opposition councillors said they were worried about the decision to take more out of reserves for legal fees. The extra £500,000 comes on top of £450,000 already drawn down for the same matter.

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Councillor Sally Beardsworth (Lib Dem, Kingsthorpe) said: “If we bring this amount down, along with the £450,000 already taken out, that’s 10 per cent of the overall money we are hoping to recover.”

Leader of the Labour Group, Councillor Danielle Stone, (Lab, Castle) said: “I don’t really understand why we are after another £500,000.

“How much is it you think we are going to recover?

“If you are going to spend £1 million and only get £1 million back that is clearly not a good idea.”

Councillor Arthur McCutcheon (Lab, Headlands), said Labour was looking at “calling in” the decision to take the extra reserves.

If the call-in is made, the council’s overview and scrutiny committee would then have to rule on whether the draw-down is the right option.

However leader of the council, Councillor Mary Markham (Con, Park) defended the need to take the funds from the savings pot - which currently stands at around £22 million.

She said that the council may well make all £10.25 million back by selling on the land around Sixfields to developers, of which she claimed there are interested buyers.

But she said the will to pursue the lost money was also about getting justice for the taxpayer.

“It’s easy on your side of the line saying - ’we don’t agree with you spending any more’.” She said.

“I ask you to give some credit to our officers.

“We are not going to be spending up to a million only to get back half a million.

“We don’t believe we need as much as the £500,000, but we can’t keep coming back and asking for more money in stages.”

And she added; “We are talking to interested parties (in buying the land).

“And let me tell you that would return all of the money. It doesn’t mean we shouldn’t chase the debt.”

Councillor Markham said that, so far, the council has had to hire lawyers as part of the liquidation of 1st Land - the development company set up to oversee the stadium rebuild at Sixields.

She said litigation fees in seizing some of former Cobblers chairman David Cardoza’s assets had also proved costly.

Some of the legal representation, she said is on a no-win-no-fee basis.

The opposition call-in is expected to be made in the next few days.