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County council answers questions around loans to cricket club
THE Northern Echo asked Durham County Council a series of questions about its financial backing and relationship with Durham County Cricket Club.
Q: What loans has the council advanced to the cricket club since becoming a unitary authority in 2009?
A: £3.1m to date. In 2011 we also gave the club a grant of £500,000 as a contribution to the latest phase of their ground development. This included an extension to the main pavilion building with additional covered spectator seating and an upgrade to the electricity supply.
Q: What process is undergone before the council decides to provide such support to what is essentially a privately run business? Is there any monitoring of how the money is subsequently spent and would it not make sense to have a council representative on the board?
A: The latest loan in 2013 was only authorised after a full evaluation of the potential economic impact on Durham and the North-East if we didn't provide the club with financial support. A full due diligence process was gone through and a final decision taken by the council's cabinet. The council does have an 'observer' who attends all the board meetings.
Q: Has any of this money been paid back to date? Also why was the holding company granted a 12 month repayment 'holiday' with the latest loan?
A: The 2013 loan has been released in installments and repayments are not due to be received until July 2014. The 12 month holiday was put in place to enable the cricket club to consolidate its financial position in line with its business plan. Previous loans to the cricket club were advanced in 2009 and 2011 and repayments are being received in line with their repayment schedule.
Q: Is it really a sensible use of taxpayers' money to support the club financially given the pressure on the council to make budget cuts?
A: The loans to the cricket club are part of the council's Capital Programme and are not impacting upon the council's Revenue Account pressures.
Q: What discussions are taken place between the council and club over plans to further develop the Emirates and the land surrounding it? What valuation has been placed on the land?
A: The redevelopment of the ground includes a number of opportunities, but until the cricket club have finalised their proposals it would not be appropriate for the council as the local planning authority to disclose any of the issues discussed. In terms of the valuation of the land outside of the ground, there has not been a valuation that looks at any one part of the ground. Figures were submitted [by the club] in respect of a funding application and are part of an overall business case, which is commercially sensitive.
Q: The council has a corporate hospitality box as a result of its relationship with the cricket club. Is this really necessary and should the authority not be trimming costs such as these, as many other councils have done?
A: The hospitality box was originally owned by Chester-le-Street District Council and was passed to the county council in 2009. There is no annual charge for it. There are a range of circumstances when the chairman, vice-chairman, leader, cabinet portfolio holders and/or senior members of the council may invite guests to attend an event. This is primarily to thank individuals and organisations for their contribution to the community and economy of County Durham and to promote and showcase the county to business and investors.
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