SIXFIELDS AUDIT REPORT: Loan to Northampton Town showed '˜breathtaking incompetence' claims former finance boss
The former finance chief at Northampton Borough Council who turned down Northampton Town's approaches for a development deal before 2011, says the fact the club was later handed a huge loan years later showed a 'breathtaking level of incompetence.'
Former Liberal Democrat borough councillor David Perkins was the portfolio holder for finance when the Lib Dems held control of the borough between 2007 and 2011.
During that time he and then chief officer for finance Isabell Proctor dismissed demands from Sixfields for a deal to develop Sixfields.
In 2009 the Cobblers proposed the authority hand over the freehold of Sixfields stadium and parts of the surrounding land, which the club said could be usede as security for a loan.
But Mr Perkins turned down the deal because the club’s financial position was too risky.
He believes the decision to then loan the club up to £12 million in 2013 under a new Tory administration was simply reckless - an opinion now backed up by a damning audit report into the affair, released this week.
He said: “I believe the decision to loan this money to the football club demonstrates a breathtaking level of incompetence and disregard for public money.”
Mr Perkins, who is now retired and lives in Devon, said The Liberal Democrats advised against a loan to Sixfields because the group had carried out due diligence on the Cobblers by obtaining their accounts from Companies House and seeing that they were “hopelessly insolvent”.
At the time the club had net liabilities in excess of £7 million.
“Myself as finance portfolio holder and also Isabell Proctor, the finance director, were adamant that no loan would be offered because of the...company’s insolvent position,” he said.
Mrs Proctor left the authority in June 2013, but the cabinet approved a loan of up to £12 million the following month, a move which was partly attributable to political pressure, the PwC report found.
The Conservative group had promised support for the club in its election manifesto.
The PwC audit report notes the football club also rejected plans to allow the money to be drawn down after work had started.
Such a move might have required the club to approach a commercial lender for a bridging loan to get building moving.
The report stated: “Without the money up front the football club were unwilling to invest in the development of the land and a result the council took a view that the money should be provided up front.”
But Mr Perkins feels this was the authority’s crucial error.
“The council is not a bank,” he said.
“If a sport club wanted a loan they should first be asked to put a business case to a high street bank so that the council could see how they risked assessed it.
“If a bank declined it as too risky that would be conclusive that the council should not touch it.”
Yesterday the borough council’s leader Jonathan Nunn apologised unreservedly on behalf of the authority, stating a host of new measures had been put in place.