Council defends decision to discuss recovery of £10m loan behind closed doors

Northampton Borough Council has come under fire for choosing to hold a cabinet meeting in private to discuss a report on recovery of a £10m loan made to Northampton Town Football Club.

A statement in response to public concerns said the meeting this week would be private as it “will be hearing legal strategy in a live litigation case against named individuals, together with further proposed legal recovery actions against other named individuals.

“The meeting will hear from external legal advisors and will contain information about the financial affairs of named individuals. The council’s recovery actions will also have a connection with the police investigation, which is live and ongoing.”

The dispute concerns money loaned by a previous administration to the former owners of the club, which was intended to facilitate improvements to the Sixfields stadium. A nearby housing development was also planned.

In February 2017 the council failed to gain summary judgment against a former chairman of Northampton Town Football Club David Cardoza.

Northampton in November 2016 issued an unreserved apology after a report by its independent auditor PwC identified significant failings in its approach towards making the loan.

PwC’s report to the audit committee said the council had approved the loan based on limited information as a business case had not been made available and auditors had been unable to determine whether conditions laid down by the cabinet had been followed.

It said: “The fact that the council has taken months to identify and collate a series of thousands of emails to evidence the adequacy of the actions undertaken highlights that the arrangements were informal and did not follow a strict procedural process. Where issues have been identified the volume of evidence available makes it very difficult to demonstrate that all issues were adequately resolved.”

Mark Smulian