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 millionaires.

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’.

He said.

"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. 

‘These charges are subsequently written-off to the Capital Adjustment Account.’

The 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.

I am 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,

The Council’s draft accounts will be discussed further at the Council’s Audit Board on 27 September. It could be a difficult meeting.

Frankly I believe the whole Stadium deal deserves a proper scrutiny by an independent agency. Perhaps Mayor Sadiq Khan can deliver this.

Cllr Conor McAuley

20/09/17

(John Gray - This is a huge issue also to my constituents - I posted sensible concerns about this issue by Cllr Rachel Tripp here"

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