Opposition calls for Sixfields deal to be ‘open to scrutiny’ – but council denies agreement is reached with Cobblers

Opposition councillors called for Northampton Borough Council to be open and transparent about any deal it does with the Cobblers for land next to Sixfields Stadium.

Friday, 24th July 2020, 11:21 am
Updated Friday, 24th July 2020, 11:23 am
The East Stand at Sixfields is yet to be fully completed.

The leaders of Labour and the Liberal Democrats also called for thorough due diligence to be carried out, after recent media reports that a deal on land next to the East Stand was close to being struck.

The issue was a hot topic of discussion at Monday’s full council meeting (July 20), but the council stressed that ‘no agreements’ were in place, and that it would carry out thorough checks before concluding any deal.

Last month, the BBC reported that a £500,000 deal was close to being struck which would allow the football club to be given an option to buy borough council-owned land next to Sixfields, on condition the East Stand was finished.

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It would then see the council sharing the proceeds of any subsequent development with the club. It was also reported that a £3 million cap on the cost of completing the stand was also likely to be part of the deal.

A criminal investigation is still ongoing examining how £10.25 million of taxpayers’ money, lent by the borough council to the club in 2013 to complete the redevelopment at the stadium, was allegedly ‘misappropriated’.

Current Cobblers chairman Kelvin Thomas acquired the club from former chairman David Cardoza in 2015. A spokesman for the club had told the BBC last month: “The overriding principle, as it always has been, is the development of the East Stand and that is an agreed point with Northampton Borough Council.

“In addition, NBC will need to demonstrate best value for any disposal of the freehold land, which is also accepted by the football club.”

Labour leader Councillor Danielle Stone was keen to see mistakes of the past not repeated, and tabled a number of written questions to the council’s cabinet member for regeneration and enterprise, Councillor Tim Hadland.

Councillor Stone asked: “Can the council confirm that all the details of the Option Agreement including any letters of intent, Memorandum of Understandings and the like will be open to scrutiny and debate by all councillors and the wider public before anything is signed?”

Responding, Councillor Hadland said: “We can confirm that should there be any deal acceptable to the council we will follow our established governance processes, including formal decision-making by cabinet. This will allow scrutiny by the public and councillors in accordance with our normal procedures.”

Liberal Democrat leader Councillor Sally Beardsworth wanted to find out more about the structure of the reported deal, asking: “The media reports state a 50/50 split of ‘profits’ is agreed between NTFC and NBC from the development. Precisely, what expenditure is to be deducted from the top line sale proceeds before determining the actual divisible profit?”

Councillor Hadland responded: “The terms of any deal have not yet been agreed and discussions are ongoing. The council will comply with its duties to achieve best value for the taxpayers of the town.”

The questions were tabled during a week in which all councillors were sent an open letter by the club’s supporters’ trust urging them to press for ‘full disclosure’ of the deal so that taxpayers’ and the club’s supporters would not be ‘ripped off all over again’.

The open letter read: “We believe it is the intention of those in charge of the negotiations with the owners of the football club to conclude a deal without allowing scrutiny of its details and therefore proper consideration of whether it is in the best interests of council taxpayers and the football club’s supporters.

“We urge you to press for full disclosure of the deal in the interests of openness and transparency, which is the very least the long-suffering football fans and council taxpayers of Northampton deserve.”

Councillor Stone ended the discussion by saying she was a bit more ‘reassured’ having been told that opposition parties would be kept in the loop with regular briefings, but added: “Rebuilding trust with the supporters is going to be really really important given the history of what has gone on. Speculation is very damaging to everybody, we need to be as open and transparent as we possibly can be and rebuild that trust so that everyone knows what is going on.”

Below are the written questions, and answers, in their entirety from Monday’s meeting.

Question from Councillor Danielle Stone (Labour leader):

“We know the Memorandum of Understanding entered into in November 2015 between Northampton Borough Council and the club’s owners is legally non-binding. But why are none of its commitments being honoured? This includes the commitment of the club’s owners to complete the East Stand from their own funds given to the Council in 2015?”

Response from Councillor Tim Hadland (Conservative, cabinet member for regeneration and enterprise):

“For some time, the football club have been keen to pursue development of land in the area of the Sixfields Stadium, and have put forward ideas for a number of possible development schemes. Although discussions are ongoing between the club and the council there are no agreements in place and any deal must deliver best value for the taxpayer.

“The non-binding commitments in the Memorandum of Understanding entered into in November 2015, were made at a point in time and have, where possible been largely honoured.

“There was no commitment given in the MoU for the completion of the East Stand. In discussions with NBC, Kelvin Thomas and David Bower [club director] did make commitments at the time to build the East Stand but this was not part of the MoU or any formal binding agreement.”

Question from Councillor Danielle Stone:

“An article in The Athletic stated that a ‘significant sum’ of money had changed hands in 2017 when the Chinese owned 5USports acquired control of NTFC’s holding company, Northampton Town Ventures Ltd. No receipt of any funds is recorded in the statutory accounts of Ventures or its controlling company at that time, the English registered Fantastical Ltd.

“Given the existence of serious questions surrounding this transaction, the wider ethical issue of an English local authority dealing with a company under the ultimate control of an offshore tax haven company in respect of the sale and development of public land, can you confirm that full professional due diligence has been carried out on NTFC and all its connected companies to satisfy the council of their finances, source of funds and the tracing and whereabouts of any Chinese funds?”

Response from Councillor Tim Hadland:

“As with any commercial transaction the council enters into, appropriate checks will be undertaken at the relevant time to ensure that the council’s interests are protected. These checks vary in their scale according to the size and type of agreement, but we can confirm that thorough checks will be undertaken in relation to any transaction around Sixfields.”

Question from Councillor Danielle Stone:

“Kelvin Thomas in response to the recent media reports said in a BBC Northampton interview on June 25 that he expects any new agreement between the club and the borough to be open to public scrutiny. Can the council confirm that all the details of the option agreement, including any letters of intent, MoUs and the like will be open to scrutiny and debate by all councillors and the wider public before anything is signed?”

Response from Councillor Tim Hadland:

“We can confirm that should there be any deal acceptable to the council we will follow our established governance processes, including formal decision-making by cabinet. This will allow scrutiny by the public and councillors in accordance with our normal procedures.”

Question from Councillor Sally Beardsworth (Liberal Democrat leader):

“This agreement is being negotiated at a time when the CPS has not yet filed charges and the KPMG [auditors] report is not finalised. What protocols are being followed regarding delegation of authority to councillors and officers to agree terms and involving the section 151 officer [chief finance officer]?”

Response from Councillor Tim Hadland:

“Any agreement will be made in line with the council’s formal procedures with recommendations being taken to cabinet for a decision to be made. Relevant officers, including the section 151 officer will be involved in the normal way. Full due diligence will be undertaken of any agreement in relation to this matter with appropriate levels of scrutiny.”

Question from Councillor Sally Beardsworth:

“What protections will be contained in any agreement for NTFC (meaning its supporters as distinct from its owners) concerning its original leasehold land and the future retention within the club of income from the development rather than it being moved through the club to repay debt to the club’s owners?”

Response from Councillor Tim Hadland:

“There have been no changes to the agreement with CDNL (County Developments (Northampton) Ltd) since the agreements entered into in 2015. Any new agreement will need to consider and undertake the obligations relating to the site as an Asset of Community Value. It will be up to NTFC, which is a separate legal entity to decide how it allocates its finances relating to its business.”

Question from Councillor Sally Beardsworth:

“The media reports state a 50/50 split of ‘profits’ is agreed between NTFC and NBC from the development. Precisely, what expenditure is to be deducted from the top line sale proceeds before determining the actual divisible profit?”

Response from Councillor Tim Hadland:

“The terms of any deal have not yet been agreed and discussions are ongoing. The council will comply with its duties to achieve best value for the taxpayers of the town.”