Friday 19 November 2010

Newham Council Seeks £80m Loan For West Ham United Whilst Planning Massive Cuts In Local Services

Next week, there are two secretive public council meetings. Those who live outside of the borough of Newham might wonder what this means - how can a meeting be both secret and public? They'll be unfamiliar with a local authority where every elected member belongs to the same political party and assembles with regimented, almost cult-like discipline. But next Tuesday, a meeting of the Cabinet takes place, with every Labour councillor in attendance. Those councillors will then remain in their seats for a full Council meeting. The public and press will be excluded from a discussion on 'Securing a Community and Regeneration Legacy of the Olympic Stadium', although really the decision has already been made. And then councillors will nod through a vote to take out an £80 million loan so that it can support West Ham United plans to lease the Olympic Stadium after 2012.

Why is such a massive decision happening behind close doors? To protect West Ham's financial and business affairs, apparently. It is perhaps just as well that so many councillors are attending the Cabinet meeting, as a number of its Members and Mayoral Advisers have benefited from the football club's hospitality or are season ticket holders - they must declare an interest and exclude themselves. This includes the Dear Leader himself, who has made numerous visits to the Chairman's Suite at the Boleyn Ground. But the decision to take on such a massive debt, at the same time that the council is planning 25% budget cut over four years, will still go through. That's the way things work in Newham.

Anyone else would think such a decision was insane. Who would borrow £80 million to give to a club that already has staggering debts, estimated at £110 million by its new owners at the start of the year? Then there is the obvious question of West Ham's current position at the bottom of the Premier League. At the start of this month, co-owner David Sullivan admitted that West Ham's debt still stands at £85 million and that relegation gives him "sleepless nights" because the club might not survive a drop down to the Championship. Why give council tax payers' money to such a high-risk partner? And why finance a proposal that a survey of West Ham fans shows has little support?

The money itself will ultimately pass to the Olympic Park Legacy Company (OPLC), who take ownership of the Olympic Stadium and the park after the Games. It has no funds of its own, as its Chief Executive Andrew Altman told me in a meeting just after his appointment. The OPLC, which will soon disappear as it is subsumed into Boris Johnsone's 'Mayoral Development Corporation', is completely reliant on deals such as the one planned with West Ham to pay for the transformation of the Olympic Games site into a new Royal Park in 2013. Who would have thought that 'Olympic legacy' meant burdening the people of one of the poorest boroughs in the country with an enormous debt to pay, indirectly, for London's newest park?

And who could have dreamed that this decision would have been taken in secret - at a meeting where councillors also plan to rewrite the terms and conditions of its own staff, slashing redundancy/severance payments, cutting annual leave and destroying staff morale (see this PDF for more on these plans)?

People say that other local authorities behave in this way too, but I guess you have to live in Newham, dreading the impact that devastating cuts will have on local people, to appreciate just how terribly, terribly wrong this is. After Tuesday's meeting, any councillor with even a ounce of conscience should hang their heads in shame for the decision they are about to make.

Photo of work on the Olympic stadium is from September 2009 - see here


Anonymous said...

I don't suppose anybody at Newham calculated that cutting the Mayors own pay and conditions may help to reduce costs?

Any ideas of how much of that £80 million will make its way back into the hands of the Mayor and his cronies?

I reckon about 1% will be siphoned off through expenses, freebies, special advisory roles and some straightforward old fashioned graft.

Is there still actually a Labour Party in Newham or has it simply transformed itself into an exclusive club for those seeking status and personal enrichment?

In any normal place you'd seek the help of your Member of Parliament to challenge such obscene disregard to civilised democratic values...Oops I forgot. They're paid up members of the same club!

Anonymous said...

Dealing with things in secret is Newham's normal mode of business.

Council meetings are meant to be the place where issues are debated publicly and the Mayor held to account. But, as I have observed on the Newham e-democracy forum, the last 2 meetings have lasted just 6 minutes and 9 minutes respectively.

How is this possible? Because any debate and discussion goes on in Labour Group meetings beforehand, and these are not required to be public. So Newham's one party state is able to do its business unobserved, with the public effectively locked out.

Democratic accountability? Pah.

Random Blowe | Original articles licensed under a Creative Commons License.