Jobs for a few of the boys, the sack for hundreds of others

Update

For a very well researched and informative review of the Scarlets story, take a look at Caebrwyn's take (here). The WAO's concerns about the council's exposure to a potential failure of the Scarlets venture should make all councillors sit up and take notice, and as Jacqui notes, the discussion which took place on this warning at the recent Audit Committee meeting has been entirely omitted from the minutes.

What you will also see from Jacqui's post is the very selective nature of the council's approach to what information it is prepared to put into the public domain when it comes to the Parc y Scarlets deal. The decision to publish the proposed refinancing deal described below is beginning to look suspiciously like a PR tactic. 

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Compare and contrast this headline from the BBC:

Carmarthenshire council warns hundreds of jobs will go

or this one from the Tivyside Advertiser:

 County council may have to give up playing fields

with a report up for approval by the council's Executive Board next week which recommends a further significant softening of the terms of the financing package extended by the council to the Scarlets back in 2007. The report (here) is a carefully written exercise in self-justification which contains the eye-popping statement that "members need to balance the interests of the taxpayer with that of the club".

The main recommendations of the report are that interest on the club's debt of £2.616 million to the council should be reduced from 7% to 3.5% above base rate (which would currently mean an effective rate of 4%), and that just in case interest rates should soar, the rate would be capped at 10%. 

So if interest rates spiralled and meant disaster for businesses and anyone with a mortgage, the club would be protected from the worst.

The sinking fund, set up to ensure that there would be enough money in the kitty to carry out maintenance work on the facilities leased to the club, was meant to have been receiving annual payments of £125,000 from the club by now, but in 2010 payments were "deferred" (actually "cancelled" would be a more correct term) for three years, and are due to resume again this year, with the payment by the club of £25,000.

The council's officers are proposing that this obligation should be further reduced to just £10,000.

In return, the club will make members of its squad available for any PR activities the council might want to undertake (subject to further negotiation on the number of days they would pose for pictures).

According to the report, the club also offered to reduce the thresholds at which it starts paying rent for the council-owned stadium and facilities (it has not actually paid any to date) in the event that it one day makes a profit.

The report's recommendations appear to let the club off that rather hypothetical hook, leaving the original thresholds in place and therefore deferring the day when the council might actually get some revenue from the venture to an unknown and most likely very distant future date.

Readers will recall that the club treats the stadium as an asset in its accounts and recently made a tidy profit from the sale of a chunk of land on the site, even though it does not pay rent or currently contribute towards the maintenance fund.

The report places the blame for all this not on the council and the officers who originally entered into the deal, but on the economic downturn. The best the council's crystal ball can come up with is a statement that, "the current economic conditions will not last forever, and it is hoped that sometime between now and 2023, the financial climate will improve".

Hundreds of people losing their jobs means hardship for them and their dependents. Thousands of people, in other words. Users of the council's bowling greens, rugby, football and cricket pitches face huge increases in charges or the loss of their sports facilities. Council taxpayers face drastic cuts in services and another painful hike in council tax.

But at least the council is balancing their interests with the interests of the Scarlets, or rather with the interests of its chief executive whose brainwave the whole Parc y Shambles disaster was.

And let's not forget that we'll be able to enjoy the PR photo shoots. 

And finally......

Council watcher anoraks will have spotted that the report was not hidden behind the usual public interest exemption.

Bearing in mind that many much less commercially sensitive matters are kept firmly secret (the pensions tax dodge, the proposed transfer of public loos to community councils, etc.), this is striking. Of one thing we can be sure: it does not herald a new dawn of openness and transparency.

Anyone with any ideas why this piece of heavily laundered linen has been hung out for all and sundry to gawp at should get in touch.