Northampton Town: Borough council lent £10m 'despite concerns'
A council which lost £10.25m in a loan to a football club handed over the money despite previous concerns about the club's finances, it has emerged.
Senior figures at Northampton Borough Council were not prepared to proceed with an initial development proposal four years earlier, without safeguards.
But weeks after the chief finance officer left in June 2013, a loan to Northampton Town FC was approved.
The disappearance of the money is now subject to a police investigation.
In the summer of 2009, the Cobblers, under then chairman David Cardoza, proposed the authority hand over the freehold of Sixfields stadium and parts of the surrounding land.
The club would then use the site as security for a loan to attract investors while the council would share any development proceeds.
But the Liberal Democrat councillor in charge of the finance portfolio at the time, David Perkins, says conditions were added after the council's chief finance officer Isabell Procter expressed concern over the club's £7m debt.
- August 2009: Northampton Borough Council (NBC) rejects initial development proposal from Northampton Town Football Club (NTFC) then approves revised plan. Deal does not go ahead.
- May 2011: Council control changes from Lib Dems to Conservatives.
- November 2011: David Mackintosh becomes leader.
- June 2013: Chief finance officer Isabell Procter leaves NBC.
- July 2013: NBC cabinet approves in principle multimillion-pound loan to NTFC.
- September 2013: First £1.5m tranche of loan paid to NTFC then transferred to County (Oundle) Ltd.
Mr Perkins told the BBC: "Our investigations of the football club's finances ensured that we adopted a very cautious approach towards any proposal from them.
"Consequently we rejected the proposal put forward by the football club and offered our own proposal, which imposed financial and legal safeguards to protect the assets of the council."
A loan from the council itself was not on the table at this time.
Mrs Procter declined to comment, but it is understood at the time of her departure she had not been told of any plans to lend Northampton Town millions of pounds.
Mr Perkins, who worked with Mrs Procter for a number of years, said she would have blocked any loan to the club.
In July 2013, Northampton Borough Council's cabinet approved the £10.25m loan to the Cobblers, delegating authority to the then Conservative leader David Mackintosh and chief executive David Kennedy.
The money was intended to rebuild parts of Sixfields stadium and build a hotel on adjacent land.
According to claims made in court documents, payment dates were then agreed between the council and employees of County Group, owned by Howard Grossman, the developer in charge of the project.
The first £1.5m of the loan was paid to the football club in September 2013, and was then almost immediately paid to a company owned by Mr Grossman called County (Oundle) Ltd.
Subsequent payments were then made to another of Mr Grossman's companies, 1st Land Ltd.
Mr Grossman has previously described claims made in court papers that he had misappropriated the money as "outrageous and deeply offensive".
Mr Cardoza, who is currently on police bail, could not be reached for comment.
But he had previously said: "It is our intention to have the debt repaid."
Mr Mackintosh, now the Conservative MP for Northampton South, has previously told the BBC that he welcomed the police investigation into the missing money.
Northampton Borough Council said: "In August 2009, a proposal went to the Borough Council's Cabinet to support entering into a development agreement with Northampton Town Football Club, the Homes and Communities Agency and a development partner to facilitate the development of the land at Sixfields. This proposal was agreed.
"The cabinet agreed to support in principle the transfer of part of its freehold interest in the Sixfields Stadium prior to physical development taking place on that land.
"The 2009 proposal also did not suggest that the Borough Council lend money to the club.
"No development between those four parties was taken forward in the way the cabinet report had proposed at that time."
"Following the 2010 election, the administration of Northampton Borough Council changed and an agreement was reached with NTFC to make a loan to support the development of the stadium and surrounding land."