‘Disappointing’ Government response to Cobblers loan scandal

The issue was discussed in the House of Lords yesterday

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By Natalie Bloomer

The Government’s response to the KPMG public interest report into Northampton Borough Council’s handling of the Cobblers loan was last night branded ‘disappointing’ and ‘dismissive’. 

This comes following an oral question on the issue in the House of Lords yesterday. Labour’s Lord Kennedy asked the Government what assessment it had made of the report and what steps were being taken in response.

Conservative Lord Greenhalgh who is a minister of state for housing, communities and local government said that although the government was aware of the report, it was down to the council to respond. 

Lord Kennedy went on to say:

“Does the noble Lord, Lord Greenhalgh, agree that this is a terrible scandal—a failure of due diligence, of governance and of leadership which has let down the residents of Northampton and lost them over £10 million, and has let down the supporters of Northampton Town Football Club, who have a half-built stand? The club was formed in 1897 and was affectionately known as “The Cobblers” in recognition of the town’s historic connections to the boot and shoe industry. Northampton Borough Council is about to be abolished, so can the noble Lord tell me how those responsible for this scandal will be held to account and made to pay?”

Lord Greenhalgh responded by condemning any situation where money is lent in a way that does not secure the amount that has been lent, resulting in taxpayers being out of pocket and added:

“We recognise the importance of carrying out the recommendations that were outlined in the public interest report and will monitor the situation and see how things progress.”

Speaking to NN Journal last night, Lord Kennedy said that the response was not satisfactory.

“It’s disappointing for them to suggest that this is simply a matter for the local authority, particularly as this council will soon no longer exist. I couldn’t get out of him what the mechanism would be to ensure those responsible will be held to account. 

“The response was quite dismissive, they should be looking into this much more carefully. It’s a shambles really and it raises bigger issues about due diligence in other local authorities.”

Lord Greenhalgh was asked a number of supplementary questions on the issue by several other peers but gave no indication that the government would be taking further action.


The fans

Northampton Town Supporters Trust board member Kevin Simons told NN Journal that although Lord Kennedy’s support on the issue is very welcome he is not optimistic that it will make much difference. 

“The response in the Lords seemed to just be ‘we’ll monitor it’-  well what does that mean?

“Too many people in public service have no honour and no shame. When something goes wrong like this they should apologise and fall on their own sword. What happened to that type of honour? If they put their hands up and apologised and then resigned that would sit a lot better with people.

“This whole thing has gone on so long now some of those responsible are probably coming to the end of their careers - so will they ever be held accountable?”


Background

Northampton Borough Council made a loan of £10.25m to the Cobblers between 2013-2014 for the redevelopment of the football club’s stadium and nearby land. The work was never completed and the money was not repaid. 

The scandal triggered a lengthy police investigation and an announcement over whether or not anybody will face criminal charges is expected shortly. 

The KPMG report which led to the issue being raised in the Lords identified “unlawful” decision making by the council in its handling of the loan. It said:

“We have identified what in our view are serious failings in the council’s arrangements when deciding to and subsequently making the loan to NTFC. The council has accepted in discussions with us that its arrangements fell short of the required standard in a number of  respects, and it has commissioned a complete review of governance arrangements in order to  address the shortcomings

“There was a near complete lack of an approved business case. Appropriate advice and documented risk management and proper governance process followed. Documents presented to members for decision making purposes and records of decisions taken by officers were deficient.”

The current leader of Northampton Borough Council Jonathan Nunn, who was not at the local authority at the time of the loan, recently apologised for how the situation had been handled and told a council meeting about actions that were being taken to ensure something similar does not happen again.