I am Spartacus wrote: Dave Wayne wrote: Sandy Pate Best Stag wrote: Dave Wayne wrote:
stagmanrob wrote:Chesterfield Borough Council have confirmed that their half of the loan is indeed from taxpayer's money.
No they haven't. Derbyshire County Council have said their half is taxpayers money. CBC have said theirs is coming from internal borrowing.
Serious question Dave. If its internal borrowing does that mean that it's taxpayers money that they have saved in other budgets?
Councils get money from various sources which makes it very difficult to specifically state where any of it actually comes from. The only priority is ensuring through cashflow management that you have money when you need it. The 'taxpayers' money as people call it is collected by the district councils, but the majority is then paid over to county councils, police and fire. Cash balances fluctuate throughout the year but surpluses are invested to generate income. All that these councils are doing is lending it to CFC instead of to a financial institution. With the base rate as low as it is, returns are very low at the moment, so if they can get a better return by loaning the money to CFC it is good financial management. By putting a legal charge on the ground they have guaranteed getting their money back as long as they have the bottle to evict the club for non-payment.
Invariably, because football clubs always do, Chesterfield FC will have to go to their owners and previous lenders for additional monies. Would they be able to do this from a local authority? Can an authority write off that sort of cash if things go spectacularly (hopefully) wrong.
You have said the loan is against the ground though look at the mess at Bury with the ground and even the car park mortgaged to the hilt.
Difficult to comment on whether they would be able to ask for further funding from the council. I guess it would be an option for them to make the request, and then the elected members would make a decision. But if they reason they needed to borrow more money was due to their initial financial plan not succeeding then I would think it highly unlikely that more money would be forthcoming. With the council securing the loan against the ground it suggests they have no intention of writing off the loan if things go wrong.
I am not in the legal profession so I don't fully understand how the 'legal charge' works that they have put on the ground, but it will be registered against the property with the Land Registry and would show up on any searches carried out if a mortgage application was made, and would therefore probably stop them from doing what happened at Bury.