UPDATED: Meeting will discuss if there were ‘weaknesses’ in way council handled £10.25m loan to Northampton Town

Northampton Borough Council is to discuss the loan it made to Northampton Town on Monday night.
Northampton Borough Council is to discuss the loan it made to Northampton Town on Monday night.

Northampton Borough Council is to outline how it will conduct an internal investigation into its managing of a £10.25 million to the Cobblers for a failed stadium development.

The authority’s upcoming audit committee will discuss a report entitled “review of loan to NTFC and development at Sixfields” when it meets on Monday night at the Guildhall.

Between 2013 and 2014 the borough council loaned Northampton Town Football Club £10.25 million to complete a stadium development, with funds it had drawn down from the government’s Public Works Loan Board (PWLB).

But the East Stand was never completed and the builders Buckingham Group Limited, have to this date only received a fraction of the money they are owed for the work.

In November, the council agreed a memorandum with the new Cobblers owners that it would assume all of the football club’s £10.25 million debt and repay it to the PWLB by developing around 33 acres of land around Sixfields itself.

Leader of the borough councillor, Councillor Mary Markham (Con, Park) also vowed to pursue all the parties involved in the failed stadium development to recover its cost through legal means.

But today the council has revealed that it will also be carrying out an internal audit, through its audit committee, which will be assisted by the firm Price Waterhouse Cooper.

The council says the committee “will carry out an internal investigation that will look at the policies and procedures followed by Northampton Borough Council when granting and monitoring the loan for the improvement of the of the football club’s stadium and the development of the associated land at Sixfields.”

Leader of the council, Councillor Mary Markham (Con, Park) said: “I welcome the fact that the audit committee is investigating the circumstances around the loan, the procedures that the borough council followed in considering the proposed loan and the processes used to manage and monitor progress once money was passed to the Club.

“I am committed to pursuing the debt of £10.25 million that we lent to the Football Club under its previous ownership to improve the stand and develop a hotel, but also to looking at how we managed this project and where we could improve so that nothing like this can happen again.”

“Through the memorandum of understanding agreed with the Club’s new owners, the debt owed to the Club by 1st Land Limited transferred across to the Borough Council. This means the Council now has control of the land development and the pursuit of the debt.”

The council’s internal audit will effectively become the third investigation into the £10.25 million Sixfields loan.

In parallel to this KPMG is carrying out an external audit and Northamptonshire Police is still carrying out a criminal investigation into “alleged financial mismanagement” of the funds that were loaned by the council.

The man leading the KPMG investigation, Andrew Cardoza, has confirmed he is no relation to former Cobblers chairman David Cardoza.

As for the meeting on Monday, leader of the Labour opposition group, Councillor Danielle Stone (Lab, Castle) has welcomed the chance to discuss the ongoing moves to recover the £10.25 million as she is also an audit committee member.

She said: “What I’m hoping is we are going to be told exactly what steps are being taken to recover the money.”