My own personal blog. Newham Council Cabinet member for Housing Services & Chair of Investment & Accounts. Councillor for West Ham ward, UNISON Branch secretary, Regional Council Officer & NEC member, Pension & Charity Trustee, Centre left and proud member of Labour movement family.
Thursday, September 21, 2017
Former Olympic Stadium Stratford report by Cllr Conor McAuley to his ward
Councillor’s Report to
Custom House Branch Labour Party September 2017.
Former Olympic Stadium Stratford
I have been approached by a few Party members concerned
about the stories they have seen in the local press about the apparent loss of
the £40 million Newham Council investment in the stadium, prior to West Ham
United Football Club moving in.
Members have asked me how and why Council came to invest
such a large sum of money in the stadium and is the money really lost?
There was extensive discussion prior to the Olympic Games in
2012, as to the future of the Stadium once the games were over. There were two
extraordinary meetings of Newham Council in November 2011 and March 2012 at
which this was discussed. (I was prevented from taking part in these debates as
I was a member of the Olympic Delivery Authority’s Planning Committee and it
was deemed that I might have a ‘prejudicial’ interest in the matter – so I took
no part in the decision making).
Under the heading ‘Securing a Community and Regeneration
Legacy for the Olympic Stadium’ members of the Council agreed to create a company
‘Newham Legacy Investments’ to which it would lend £40 million. This company
would then enter into a Limited Liability Partnership (LLP) with the Olympic
Park Legacy Company for the purposes of managing the legacy of the Olympic
Stadium and island site around the stadium. The £40 million would then be
invested into this new partnership.
Outside of the Council there has been much debate as to why
it was necessary to invest £40m into a stadium which would be used primarily by
West Ham United, a wealthy Premiership football club owned by two multi
The Mayor has argued ‘This is not just for a Premier League
football club, this is for community benefit. If it was purely about the
football club I could not justify doing this’.’We are not sacrificing anything
for this. We are doing prudential borrowing but we cannot use this borrowing
for anything else and it does not affect our borrowing capacity or what we can
spend. It has no negative impact’.
"Of course this is not entirely true. We could have used the
money to invest in other community priorities like social housing or
refurbishing some of our now closed community centres (like the Upton Centre). Sir
Robin was also quoted as saying; “even on the
most disastrous figures, even if everything goes wrong we still make a profit
on this. The risk is really, really minimal.”
So where is the money now?
It is shown in
the Council’s recently published accounts as an ‘Impairment’ totalling £44.4m of a Long Term Debtor
in one of the Council’s group undertaking, Newham Legacy Investments Ltd.
charges are subsequently written-off to
the Capital Adjustment Account.’
Mayor and one or two other councillors are arguing that an ‘impairment’ is not
a ‘write off’ but they are contradicted by the very next line in the accounts
which states that these charges are subsequently written off.
appalled not only by the loss itself but by the fact that we had to study the
annual accounts to find this information.
Such a fanfare was
made about the original investment, one might think that the Council was
seeking to bury the loss.
It tends to
remind me of the £4.3+ million lost in the Council’s investment in 2012 in the
London Pleasure Gardens project that was supposed to animate the Silvertown
Quays area south of the Royal Docks. The Council lost every penny of this investment
and it even had to pay the winding up costs of the company.
As I understand
it, Newham’s Overiew & Scrutiny Committee has never looked at this loss, so
I doubt their commitment to look at the Stadium debacle,
draft accounts will be discussed further at the Council’s Audit Board on 27
September. It could be a difficult meeting.
believe the whole Stadium deal deserves a proper scrutiny by an independent
agency. Perhaps Mayor Sadiq Khan can deliver this.