Sunday 15 December 2013

Marstons land deal - Cllr Caiach's response

Cllr Siân Caiach has responded to the attack on her by council leader Kevin Madge with a statement of her own about the Marstons land deal.

Her statement casts some interesting new light on aspects of this latest scandal, and sadly it is unlikely that any of the titles owned by Local World will give it the time of day. So to try to redress the balance just a little, here is her statement in full.

"I would like to first make it clear that I am asking Kevin Madge to resign as Leader of Carmarthenshire County Council because of his responsibility in the decision to sell an overflow car park leased to the Scarlets rent free, providing considerable funds for the club. The Leader is expected, like all councillors, to always display openness and accountability. Although informed of the deal, he kept the details secret. The sale of public assets to benefit a private company should surely be discussed openly.

"I understand the council, under EU regulations, is only allowed to give private companies active in the EU the equivalent of 200,000 Euros or £169,000 over every 3 years, and one off grants of 50% costs to build, for example a stadium like Parc Y Scarlets. 

"We appear to have financed the Scarlets beyond the limits of this law. In this desperate economic situation we are reducing services and asking hundreds our own council staff to leave their jobs and, I believe, giving away too much money to the rugby club. 

"It is a matter of record that in July 2012 the council executive board, headed by Mr Madge, instructed an officer, Jonathan Fearn to take sole charge of the sale and consult Cllr Jeff Edmunds, executive board member for finance.  Prior to that time it was planned that the car park would be an out of town shopping area, not a pub, but that deal fell through and the land lease was later sold on to Marstons. 

"The area was sold for £850,000 according to the land registry. The Council’s accounts showed they got £200,000 and the fate of the rest of the money was not disclosed to ordinary councillors like myself, and then refused under the Freedom Of Information Act.

"Jonathan Fearn told me by email that following “normal negotiation and the agreement of allowable costs, the remaining proceeds were shared equally between the club and the council”. 

"Now Cllr Madge tells us that an independent District Valuer assessed the value of the land and advised as to how the remaining proceeds of the sale could be divided.  The proceeds seemed to be, on that basis, around £400,000, so the costs of the sale were over half the sale price.

"Cllr Edmunds asked to see me when I had asked him for information, and told me that he wished to be open and transparent and give me the full facts about the sale. Indeed the costs of the sale were very high. The original deal involving a retail use, he told me, had been suggested by HDD, the owners of the Llanelli Eastgate Centre who asked the Scarlets to take up some units there to set up their shop and café bar. They loaned them , I was told, £280,000 to fit up the shop units and start this new  business venture.  As the Scarlets needed to pay this back, Cllr Edmunds and Mr Fearn were persuaded to call this £280,000 an “allowable expense” of the car park sale. 

"Other payments deducted from the £850,000 were around £50,000 for architects and agents fees, £70,000 for compensation to the club for the car park lease, a £30,000 finder’s fee to the Scarlets for finding a buyer and in the end, I was told, more than half the “official “proceeds of £420,000. The Scarlets got £220,000, the council £200,000.

"Now I have no objection to the sale of unused council land to provide money for the people  of Carmarthenshire’s council services.  However, as the Scarlets had not ever paid a penny of rent for this lease the split seems very generous. They have had around £600,000 pounds.

"They may be entitled to compensation for the lease and a finder’s fee and a profit share, but do they really qualify for over half the profit plus the cost of setting up their private shop and café bar?

"The law says that 200,000 Euros  (equivalent to about £169,000) is the maximum allowed for councils to give bodies like the Scarlets every 3 years. So as I understand it, any informal grants, as the “allowable expense” may well be, or other financial help has to be less than this amount in a three year period.

"Councillor Edmunds told me that he had informed the Leader of the result of the decision delegated by the executive, but was not aware that the information had been passed on. This means that the other executive board Councillors, who recently granted the club more financial support by reducing the interest on the Scarlet’s loan from the council, may not have known that a grant already given from the sale may have exceeded the whole 3 year quota.

"I find it disturbing that the legal explanation of how we can give all this money to the Scarlets is kept secret.
I suspect all may not be in order. 

"I thank Councillor Jeff Edmunds profoundly for being open and honest about where this particular sale money went and why. I think he has acted bravely and with integrity.  He was under considerable pressure not to talk about this sale. 

"It is Councillor Madge as Council Leader who has ultimate responsibility for the County Council. If he or the Executive Board he leads instructs an officer to take over the Councillors’ responsibility for a major financial matter, he is still responsible for that decision.  Cllr Madge has not denied that he did not inform other councillors about the money from the sale, and he has not made it clear why State Aid Law does not apply to the Scarlets. 

Cllr Madge says he is “extremely proud” to be associated with what has happened, and there is no need to consider resigning. I disagree."


Anonymous said...

The Scarlets are important to the cultural life of many in the county and they also play a part in the economy of Lanelli. The Council is right to promote them. But such promotion needs to be absolutely transparent and fair. They are, after all, a business, with many very well paid executives and players.

So, when public money is seemingly showered on them, at a time when vicious cuts are being made or planned to services and facilities throughout the county, Kevin Madge needs to justify why the Scarlets deserve such generosity with scarce public funds, rather than try to hide information behind a wall of secrecy.

I don't have any expertise in valuation, but it seems incredible to me that the cost of a completely unrelated development in the Eastgate Centre can be recouped as an allowable cost. And why do the public have to pay for architects? If Marstons want a pub they should pay for it themselves.

The EU state aid question is no doubt riddled with legal complexity, but the bottom line is that the public is entitled to a very clear explanation as to why so much public money has ended up in the Scarlet's coffers.

Anonymous said...

What this does of course is undermine the trust of the electorate in local politicians. The leaders explanation seems complicated and to be honest shifty.

Quite frankly - given the problems experienced in Llanelli with the mis-use of alcohol - I am surprised that the couty would be using public funds to fund or facilitate a pub in Eastgate.

Personally I cant see how anybody could object to an independent arbitrator taking a look at this deal