Thursday, 4 June 2015

Those 'allowable expenses' - a postscript

Update 5th June; The story has appeared in today's Western Mail. Plaid AM Rhodri Glyn Thomas is quoted as saying that "serious questions now need to be asked about the use of public money in the first place". With Plaid now the leading power in Carmarthenshire council, now is the time...This deal was outrageous.


One of the more curious financial arrangements involving our county council in the last year or two was the division of the spoils between the council and Scarlets Regional Ltd from the sale of a car park adjacent to the Parc Y Scarlets stadium, see The Council, the Scarlets and the Allowable Expenses - a Revelation. The car park was sold to Marstons' Inns so became known as the Marstons' Deal.

Out of a sale price of £850,000 the '50/50 split' turned out to be £650,000 for the club and £200,000 for the Carmarthenshire taxpayer. One of the 'allowable expenses' deducted from the total was a surprise £280,000 for the Scarlets to pay off a third party loan. The loan had been from HDD Developments for the fixtures and fittings of the Scarlets shop and restaurant, The Red Room, in the council led Eastgate development in Llanelli.

The actual details of the split, and the 'allowable' deductions were eventually revealed by the now former Exec Board member for Resources, Labour's Cllr Jeff Edmunds. In other words, he spilled the beans.

Some time, and several FoIs later, it transpired that both the Council's Director of Resources and the Head of Corporate Property had deemed this payment of £280,000 to be unacceptable.

However, at the last minute they were both overruled by Mark James, and the deal, with this 'allowable expense', was done.

However, despite the generosity of our council the Red Room didn't last and around October last year the Scarlets sub-let the premises to another company, run by two rugby players, rent free for the first eighteen months.

As reported recently in the press, Scarlets Regional Ltd made a net loss of £1.7m and an excess of liabilities over assets of £4,1m in the financial year 2013/14. The council's generous involvement in the club, led by our chief executive, has been well documented and was most recently featured in the Herald's Cadno column (see Today's papers).

So what happened to the allowable expense of £280,000 which left the taxpayer somewhat shortchanged by the Marston's deal? According to the Scarlets' latest accounts it went down the pan along with the Red Room.

As the future rental income is now dependent on the new management remaining viable after the 18 month free rent period, the value of the premises as a fixed asset for the Scarlets is now 'nil' and £275,000 has been written off as an 'exceptional cost'.

All a bit ironic really for Cllr Jeff Edmunds, it was his honesty over this matter (he'd even resisted the persuasive charms of the chief executive who urged him not to reveal the details) which undoubtedly marked his card as 'unreliable' and unsuitable Leadership material by Pam and Meryl, and of course, Mark.


Anonymous said...

So we have 'allowable expenses' and 'exceptional cost'.
sounds par for the course.

Cneifiwr said...

Follow the money, as they say. And where did it go? This was in reality nothing more than a scam to boost occupancy rates in Eastgate and give the developer a back door payment of public money.

The Scarlets derived no benefit out of this, quite the reverse. By getting tangled up in this sordid deal, their reputation has taken another knock.

caebrwyn said...


Yes, you're right the only ones to benefit were the developers. As for the Scarlets, they were refusing to go ahead with the Marstons' deal unless this debt was paid off.

The council's Head of Corporate Property, who had been delegated to finalise the deal was adamant that this debt was; "a private matter for the Scarlets from their share of the proceeds..and is nothing to do with the Council. The Council would happily wait for a few years for the disposal of the site rather than have to pay HDD anything".
The council's Director of Resources said "I cannot support any of the deductions put forward"

They were then both overruled.

The real question was whether this was correct use of public money, in my opinion it was highly incorrect, and possibly fraudulent.

Anonymous said...

£280,000 - should public money be spent on vital public services or should it be frittered away to bankroll an exalted cabal of businessmen? It's a no-brainer just like Sepp Blatter acts in the best interests of football.

Anonymous said...

When will all this end?Plaid must get a grip on things soon.

Anonymous said...

Plaid do indeed need to start proper investigations very soon. If they don't, they will be complicit in a cover-up. They are only delaying the inevitable - look at FIFA - 17 years on (I believe) from first allegations of corruption. Many parallels there, including the decision-makers self-perceived indestructibility. It's false. Sooner or later, there's going to be some knocking on doors. Sooner is better - with now being the very best time as there has been a shift in rule and will give Plaid an opportunity to disassociate themselves. This is without any doubt in my mind (as an ex - and highly disillusioned - Audit Commission employee) misuse of public funds and misconduct in public office.

Anonymous said...

Strong words anon @ 8:38 but very true.It is good to see there are people like you who can confirm what everyone else suspects.David Cameron has shown the will to deal with corruption and a good place to start should be CCC.

Patricia B said...

Corruption is a cancer. It affects everyone who comes into contact with it. There has been so much evidence of highly questionable practices uncovered by bloggers and newspapers over the years, not withstanding evidence from whistleblowers and others, I include myself in that, the question should now be asked - are these practices simply utter incompetence or is it corrupt practice. It has to be one or the other, I know which one I plumb for, as one who has been affected by this cancer for years. If CCC are that incompetent then they need to be put into 'special measures'. Let there be an investigation into which of these it actually is.

Anonymous said...

Patricia B is just one of many who have evidence of dubious practices by those who hold positions of trust within the council.Even elected members cannot escape criticism especially those who have supported senior officers and members who hold special posts of responsibility.I don't know what the answer is except that someone must eventually have to take control of,primarily the chief executive who most people hold responsible for all the woes that have befallen the county.