lt was July 2009 when it was ﬁrst publicly announced that Eastleigh Borough Council was to borrow £30m and loan it on to The Rose Bowl Company to enable them to fund the building of their luxury Hotel. Its existence was said to be essential if Test Match Cricket was to be secured and the further development of the stadium site was to be achieved. (As it happens neither was correct).
The Council Leader was reported as saying:
“We have invested in this for the good of the community, not to make money, but the Council will not end up out of pocket”.
Win Win Win Win!
It was also stated that it would create up to 200 jobs, generate £14 to £20m of spending in the local economy, would be a great focus for “world” class sporting events — plus Test Match Cricket.
It had also been said that because of the crisis in the Economy, the Rose Bowl Company could not acquire sufficient credit. (Nothing was mentioned about other signiﬁcant reasons as to why that was the case)
From the outset, I was intrigued as to how this proposal was processed and determined, and the reasoning applied in support of the loan request being granted.
It didn’t help that so much was said to be commercially sensitive, which meant that early on, the Council decided to treat the whole subject matter as “Exempt Business” which meant it would discussed behind closed doors, away from the scrutiny of the press and public.
It was an exceptionally large amount for a Borough Council to borrow and commit to ,for the beneﬁt in the main of what I thought was known to be a ﬁnancially fragile company.
County Clubs struggling
Its core specialist area was cricket, a sport in which just about every County Club in the country ﬁnds hard to avoid ﬁnancial losses, and in Test Match terms, is struggling to maintain its credibility and popularity, let alone long term survival around the world.
When I started asking questions, I was shocked. There appeared to be numerous areas that hadn’t been properly evaluated, questions that wouldn’t and or couldn‘t be answered and an attitude that eventually seemed indicative of a “money no object“ policy towards obtaining the preferred answers required – post the decision having been seemingly already made and announced.
There has also existed what myself, and others I suspect, would perceive to be an unhealthy relationship between the two organisations which in my view, has contributed to the Council being seen to be commercially naive and biased. What was supposed to have been a Hotel project vital to be completed promptly, had developed into an expensive, complex, onerous and so far, as anyone would surely have to acknowledge, a “dogs dinner” of a process, flawed and altered in so many ways.
From my ongoing personal experiences and observations, I have been genuinely shocked at the lack of meaningful challenge, or for that matter, almost any challenge by Councillors, who passively exhibit no grave concerns whatsoever. How can such a contentious, hugely expensive, debt laden project be voted through “en-masse” by every single individual Liberal Democrat Councillor? Not even an abstainer amongst them! Only the few alternative political party opponents objected.
I believe the majority of members, and they do have my sympathy, have been unreasonably put upon to a point where it was impossible to properly assess the material being provided for analysis. Perhaps that is why the last Full Council vote taken, on 15 December 2011, (in agreement with the Council Leader’s proposal) delegated the ultimate decision to just ﬁve people – – three un-elected Executive Employees, the Council Leader, and one other. There were still 14 issues outstanding!
Final decision still to be made
Is that not simply amazing? Yet I would suggest that everyone throughout the Southampton media area would believe that Eastleigh Borough Council was already formally committed to this project. But actually it was not and still is not! The District Auditor confirmed as much, both at the newly formed Audit & Resources Committee meeting on the 31 May and previously elsewhere. I attended this meeting, and others, whereby members have shown themselves to be embarrassingly unsure of their position, let alone the facts. I have found it all very disconcerting.
Sit down and shut up
At the latest Hedge End, West End and Botley Local Area Committee meeting held on the 11 June 2012, (the Committee responsible for passing. or otherwise, planning applications by the Rose Bowl Company) I made another attempt to highlight some of the issues of concern. In the open-minded spirit of democracy, I am ﬁrst told that I have 3 minutes to complete my address. I object on the basis that with no one else there wishing to speak in this, the Public Participation section, could or should I not be allowed longer, perhaps up to I5 minutes if needs be? After all, I may well have had things to say that could be signiﬁcant and important, useful even. But no deal!
In fact, the atmosphere from thereon in felt quite hostile from some quarters. Whatever could I say that Councillors would not want to hear? Nonetheless, I did my best. After a few points were made. I started to go through some ﬁgures, details of which I was unable to complete. My time was over and out. It felt like being on some kind of Beat the Clock Game Show.
The ﬁgures to which I was referring concerned aspects of the Councils ﬁrst years’ external expenditure. (June 2009 to 2010) In this day and age, big numbers sweepingly trip of the tongue and become almost unreal. The following I believe starkly highlights amounts that were so easily and generously spent. Some are substantial amounts that I contend could or should have been avoidable.
The power of wellbeing
Before listing these figures, which are more or less in date order, I would remind readers that within a short time of making the ﬁrst announcement, the Councils external legal advice was that the proposal would fall foul of state aid rules and be open to challenge by others. (Primarily likely to be other Hoteliers) Hence, a different approach and new reasons would have to be adopted.
Subsequently a way was to be found to justify the Council being the “builder” and now also owner of the Hotel.
Consequently, the “Power of Wellbeing” rules were utilised under the Local Government Act 2000, and an embellished reference to the Rose Bowl Project was conveniently added to the new and upcoming Strategic Community Plan, 2009 to 2013, formally produced and launched in November 2009. This was a legal necessity if the venture was to be acceptable within the above mentioned Act.
Nice work if you can get it.
My main concentration was on Norton Rose, the Councils external legal advisors of choice in London. (Regarded as “as good as it gets”) Their general charges are for Professional Services and Legal Advice re Hotel Acquisition and Development Finance. I have also included some of the other key payments made.
Norton Rose. 15 Jun – 15 July £ 58,112
Norton Rose. 20 July – 20 Aug 106,914
Norton Rose. 21 Aug – 18 Sep 131,463
Norton Rose. 19 Sep – 16 Oct 205,869
Douglas Grant Assoc
(consultancy services) 9,940
Douglas Grant Assoc. 7,839
Norton Rose. 11 Oct – 13 Nov 150,531
Douglas Grant Assoc. 17,572
(valuation advice) 11,500
Douglas Grant Assoc. 13,881
Vail Williams. 2,719
Norton Rose. 14 Nov- 18 Dec 86,420
(Judicial Review) 23 Nov – 18 Dec 83,191
Douglas Grant Assoc. 6,946
Norton Rose 19 Dec – 15 Jan 69,976
Norton Rose. 19 Dec – 15 Jan 12,701
Norton Rose 16 Jan – 23 Feb 93,253
Douglas Grant Assoc 14,485
Douglas Grant Assoc 7,343
Norton Rose 24Feb – 23 Mar 39,384
Douglas Grant Assoc. 5,579
Norton Rose 24 Mar – 20 Apr 14,801
Norton Rose 21 Apr – 21 May 19,220
Norton Rose 28 May – 11 June 4,140
Note: The Judicial Review was decided on 4 March 2010.
Approximately £500,000 was spent in the ﬁrst 4 months alone — and yet along the way, it’s been said that no money has thus far been invested in the project. Seems misleading to me. The Council has certainly got borrowings outstanding and payments to continually make, without income to offset.
Of course, it’s also been stated that all fees will be lumped onto the bill for the Rose Bowl to pay back on the ‘never-never’. Incredible. What sort of business would agree to such an “open ended blank cheque book” arrangement? And why isn’t anyone concerned at the sums being wasted? Many of the reports have been rendered useless, with other new plans and opinions and partners being introduced, new assessments and consultants reports to pay for, revised business projections being externally assessed, etc.
Even the Judicial Review could have arguably been avoided had the Council consulted with the Hoteliers, as they were obliged to, and in fact as they eventually did so in yet another private meeting held in June 2010, when apparently agreements were made.
Interestingly MacDonald Hotels Ltd (Boorley Green) who headed the Judicial Review, Meridian Leisure Hotels (responsible for the Holiday Inn Hotel situated immediately next to the Rose Bowl Stadium) and Daniel Thwaites plc.,(trading as Shire Hotels) all extremely experienced Hoteliers, were initially disregarded in terms of their concerns and know how, and yet Rose Bowl plc and Rose Bowl Hotels Ltd were eagerly listened to.
Was I the only one who was nonplussed by the Councils later statement in which it was said “The Councils defence was successful with the Judicial Review being rejected at the oral hearing stage. This was an excellent result ……”? According to the ﬁgures I’ve provided above, the Judicial Review advice I defence costs amounted to a whopping £317,000. The costs awarded via the court, payable by the Hoteliers was as I understand, just £30,000. Can such an outcome really be described as being a success?
There becomes ever more other disturbing aspects that arise, not least in respect of the most recent position accepted and adopted by the Council. Apparently, there is now to be 520 odd “Full Time Equivalent “jobs created, and £55million extra spend in the Economy. (No longer the Local Economy you will note) I consider the basis on which these ﬁgures have been estimated to be inaccurate and ﬂawed.
The “out of the blue” proposal to purchase the “peppcrcorn rent” lease on the land was also astounding. To then in combination, also want to purchase the stadium, whilst providing a multi -million pound cash injection into the Rose Bowl Company, which also meant imposing on them £35,000 per month rental payback, was staggering. Were we now as desperate as them to keep the Company alive?
There seems to be hardly any clear indicators to show how this extra monthly payment is to be met, and there is little in the way of regular income streams available over and above that generated in previous years. Evidently, the risks and costs were becoming bigger, hence the necessity to cut playing budgets and staff numbers etc.
Have these matters genuinely received intense scrutiny and challenge by Councillors?
Council steps in as borrower of last resort
It is generally accepted that the Country is over loaded with debt, Public Sector Borrowing being almost out of control. We are doing everything we can to reduce the deﬁcit. Yet this Council is sprinting in the opposite direction, and on very unstable footwear! This £35m to £40m corporate orientated Hotel project is surely not the business of a Borough Council, but a venture only worthy of hardnosed private enterprise. Tellingly, business investors, previous partners, Banks and the like, have rejected and or walked away from involvement. Others seemingly comforted that the Council is now the guarantor and underwriter, (and direct payer of their invoices!)
This cannot be a balanced and prudent atmosphere in which to commit the Council and its resources. (Which effectively belong to and are those of its ordinary residents).
To try and conclude, surely there must be plenty of people out there who seriously share these many concerns? Over 90% of Eastleigh residents I suggest will rarely, if ever, stay over in the Hotel, with countless being unable to justify, let alone afford, the use of its expensive high-end facilities. Also, less that 0.5% – yes, less than one half of a percent, will beneﬁt from one of the new future jobs predicted to be created in the distant years to come. ls this really proportionate? Should not Councils primary functions be to concentrate on and provide services, and to support socially inclusive projects, the less able and well off always being top of the agenda?
To Councillors who would relate to such thoughts, I would say it is not too late to ﬁnd a voice against those who wish you to think otherwise. To those who would take just the pragmatic approach, it is not too late to challenge the ﬁgures and outcomes you have been encouraged to accept. In both respects, there is still time to re-evaluate your decisions so far made.
Within realistic ambition and resources, The Rose Bowl /Hampshire Cricket will always continue, so long as its supporters and members, related sponsors, T.V broadcast media, the England and Wales Cricket Board and keen wealthy individuals, wish it to do so. Logic says Eastleigh Borough Council do not need to play, and indeed should not play, such an involved, costly, uncertain and risk loaded role. There is still time to change course.
Photo: © Stephen Slominski
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