Tuesday 31 January 2017

How Carmarthenshire County Council funded a Rugby Region - Part 4 Writing the blank cheque

County Councils in theory are run by the elected members, the Councillors. However, this body of Councillors are often easily persuaded. In the last 9 years I've been a member of this Council the strategy is usually "There is a terrible problem" with whatever, for which there is only one solution "We need to give public money to elaborate and expensive project X"

This is usually not only the Council's money but free grants of public land, support for other grant aid or favourable loans, sympathetic planing permission, infrastructure added for free at the Council's expense and a promise of a massive boost in jobs/services/low cost housing which never quite materialises.

The "Leader" of the Council reads from a well rehearsed script and promises all the goodies but never mentions the real cost. This is of course not only the squandering of public money, but the reputation of the Council by the deceptive nature of the "Sell", Many councillors have been through this farce many times and appear unconcerned at the dishonesty and the usual loss of public land, regional funding gifts and arranging grants etc which could have financed grassroots local projects rather than our "friends",

The Scarlets' board had made friends with influential locals and not only within the Council. Llanelli AM Helen Mary Jones was, she said. won over by a display of desperation and weeping in her office by Huw Evans [Club Chair owed £millions by  the club in outstanding loans] and chief executive Stuart Gallagher. Overwhelmed by their plight she instructed Neil Baker,the Plaid Group Leader on the County Council to use the Whip to fully back the project,The Plaid members voted unanimously for the deal - the only political group to do so. The was despite the efforts of the local Llanelli.Plaid Cymru members who did not support the massive "investment" into a club who could play rugby with distinction but whose financial management was far from championship level.

In the manner of timeshare salesmen, Council Chief Executive Mark James  and Finance Director Roger Jones and others arranged a series of meetings selling the wonderful shiny new stadium to the elected councillors. The new stadium was going to bring millions to the area, save Rugby as a sport, put Llanelli on the map and make the councillors members of  the bestest ever council in Wales. If they didn't back the scheme Llanelli, the Scarlets and the whole local economy would die.

 The local community in the area was about to lose not only the benefits of a stadium local businesses depended on, their close association with the club and public access to  green open space. They would gain 450 houses and would get nothing from the deal. The section 106 funds would go to the new stadium miles away as a community asset for all Llanelli, They could not understand why the stadium could not be upgraded on site. The area was already prone to floods, traffic problems were already serious and would be unsuitable normally for housing development. The out of town stadium was no solution to local needs but this project was driven by money alone, and the likely major beneficiaries were not members of the local community.

  The move away was mainly motivated by the need to make money for Mr Evans and others who wanted the money they had invested in the Scarlets to return  to their own pockets,In order to spread the wealth smaller parcels of land around the site were bought up by mysterious investors in the expectation of sharing in the bonanza. The 106 deal had already privately been agreed in correspondence with the County chief executive and the fact that the Scarlets had no money to put into the Stadium until the site was developed was overcome by the offer of a £5.56 million loan from the County on interest only terms, so that they were "making their own contribution" to the build in theory but in practice had not put in a penny.

The Stradey Residents prepared and sent documents to every councillor. The Independent auditor described the Club's business case as "challenging" but Council leader Mrs Meryl Gravell and the senior council officers reassured the elected members that everything would be fine and any spanner in the works would spell disaster for Llanelli, whose entire future depended on the scheme,

More money slipped away. A further £2,6 milliom was loaned, A similar amount was gifted as a grant.The club blamed the local residents who had asked for the public access practice pitches to be retained as a village green [refused] and had insisted on the preservation of a public right of way through the site [achieved].

  evidence that they were not unrelated to the Scarlets.                                                                                                           

It looks like the Scarlets' Chairman may have speculated in the hope of extra little profit on the side. Two parcels of land were bought by a company in which he had an interest.

 The development land of the Stradey Park site as a whole was said to be worth £22m in 2008 but a Barclays loan was needed to support the club's cash flow and the degree of capitalisation of the site is unknown.

BBC report November 2007:
Artist's impression of new stadium at Pemberton
An artist's impression of the Scarlets' proposed stadium

Councillors in Carmarthenshire have agreed to lend the Scarlets £2.6m to help pay for a new £23.1m stadium.
The rugby club said delays and the cost of fighting two public inquiries had left it with a £5m shortfall.
Council leader Meryl Gravell assured members the loan would have no impact on services or council tax.

Other problems soon arose when the Directors of the Club, who promised in the funding meeting to cover any further losses,did not do so.

 The cost of building the Stadium was eventually £27m, the free ground lease to the club for 150yrs is valued at £5m. Ground preparation cost around £5m as the whole site- a boggy old rubbish dump with underlying mine shafts required heroic quantities of concrete to be pumped into it.

In Llanelli the project was not popular, the bad feeling was not against the club specifically but against the Club Executives who appeared to be the only beneficiaries of all this public money and the County Councillors who had supported the financial deal.

Such was the feeling  against the Indy/Labour Coalition that had promoted the new stadium deal that Plaid returned its best ever Council election results  in Llanelli in 2008. Both Labour County Councillors for the Stradey area Eryl Morgan and Keith Price Davies, lost their seats to Plaid. Neither supported the move and Eryl actually had the guts to vote against the financial package in Council while Keith went out for lunch and  "forgot" to come back to vote.

Here is a contribution to the Scrum V rugby forum on the subject, informed by land registry documents.

"Part of the land, covering the ground itself, is owned by the rugby club. But two sections of the la

nd are owned by a property company wholly owned by Scarlets chairman Huw Evans, and another section is owned by a company whose ultimate ownership is disguised by company registrations in the Isle of Man and the British Virgin Islands.

One Land Registry document shows part of the land covered by the club's planning application was bought by Stirling Property Management Ltd for £90,000 in October 2000. Another piece of land was bought by the company for £135,000 in May 2002.

All 100 shares in Stirling Property Management Ltd, whose registered office is in Cheltenham, are, according to the current information held by Companies House, owned by Mr Evans, 57, who lives in Cheltenham.

 The other company,Tollington, is registered in the Isle of Man, whose companies registrar holds a document showing that the firm has two shareholders - Scarlett Investment Holdings Ltd and Scarlett Nominees Ltd - both registered in the British Virgin Islands, a well-known tax haven. Registering companies in the British Virgin Islands enables those involved to keep their identities secret."
Barclays may have required some of the site capital as collateral. It is not clear yet how much of the the expected profit the club will eventually realise. However, the local County Council had not forgotten their "investment" and would continue to donate generously to the project, both in money and planning permission.
Siân Caiach

Wednesday 18 January 2017

The Scarlets - How Carmarthenshire County Council funded a Rugby Region - part 3

Much of Llanelli town is low lying. Many people do not realise how low. Many areas of South Llanelli are functionally below sea level and are utterly dependent on the man made tide locks, huge flap valves which stop the sea water coming in during the highest cycles of the tide. Twice a day these flaps shut and open at the mouths of every river and stream. They confine the rivers behind them which causes occasional back-flow flooding. Many of these rivers are hidden in culverts before going out into the estuary in the town area. This stops unwelcome visits from the sea flooding the town twice daily Some of these water ways have been built over. The major town river,the Lliedi, along with other local watercourses, had its course diverted in the 19th century to facilitate industrial development. Its exact route under the town centre buildings is not known.

Eventually, with the sea level rising, the system will have to "go Dutch" and start pumping the rivers out to sea over the flood defences. Alternatively large areas of the town will have to be abandoned. This prospect has not dissuaded Carmarthenshire County Council Planning Committees from building extensively in these low lying areas.

Adding to this is the fact that the town receives  massive amounts of water, partly due to the high rainfall in the river catchment areas but also due to the geology of the escarpments above the town which have many artesian springs and natural underground reservoirs. Sink holes are not unknown and during my time as a councillor several large holes have appeared inconveniently and suddenly in my ward alone. The level of groundwater is understandably, often high. 

In October 1896, one hundred and twenty years ago, the tail end of an Atlantic hurricane gifted to the town of Llanelli a 10 foot tidal surge. Known as the "Great Storm" the sea flooded all of the low lying areas of Llanelli, having breached the sea defences at Pwll and Machynys and washed away the main road and the railway. A funnel shaped shallow estuary is ideal to accentuate a tidal surge and the flood water hit the town just as workers were waking to go to work. No human lives were lost but large numbers of cattle sheep and horses were swept away and 500 homes were seriously flooded as well as mines, factories and commercial premises. I have been assured NRW that the current flood defences will probably not take a 10ft tidal storm surge but still the Llanelli waterfront is utilised more and more for housing and other projects. Currently the Delta Lakes area is earmarked for a project containing a care home.

The Thomas Arms, Thomas Street, the highest point of the flood in 1896

But how did the Council and the Club deal with the flood risks? Money can be magical and make things disappear. In 2004 the Welsh Government DAM [Development Advice Map] for the Stradey Park devdelopment area showed a large portion of it was on a flood plain. 

In 2006 the flood plain had been conveniently removed in a report by the drainage and hydrology planning consultants Waterman Quadrant .

 In 2009 the flood plain was not just still there but extended on the DAM maps. Currently most of the site and its major access road is on a C2 flood plain. 

This WQ expert assessment in 2006 meant that the first formal considerations of planning at Stradey Park for the new housing estate to fund the Scarlets' new stadium were unhindered by flooding considerations as there was no apparent risk.

However since the "Great Storm" the area around the proposed new estate had been severely flooded twice, In the 1950's the sea visited  the Sandy Road area and in 1981 serious river flooding hit the area, flooding the surrounding homes in Iscoed and the ground near the old stadium, now part of the Stradey Park Housing Estate. History can be embarrassing, especially when in living memory, but the reassurance of the WQ report and the desperate need to sell the site for building overcame common sense,

Welsh Government DAM map 2004

Experts Waterman Quadrant report the flood plain has retreated. 2006 report for planning committee

Flood Plain still in Welsh Government's DAM map 2009

Iscoed Estate severe floods 1981
I suspect expert consultants can do wonders when paid to show development sites in their best light. In this case, the flood plain just magically disappears, then  embarrassingly reappears when further assessed by the environment agency in their regular updates. This is really concerning. Flooding is no joke and risks homes, livelihoods and even life itself. In order to fund a private sports club the welfare of this area and the future welfare of occupants of the new estate were low on the priorities. 

This project was seemingly driven by one thing, money. It seems to me that the inconvenient  truth about the unsuitability of Stradey Park for house building was dealt with by using extreme economy. Both Club and County Council knew of the history of these floods. Iscoed is a council estate .It continues to suffer floods affecting roads and gardens to the present day and now there are cases of buildings subsiding. At the time of the 1981 floods areas of Stradey Park, now built on, such as the practise pitches were also flooded.

At this point, 2006, it is clear that there was no plan B and the pressure was on to get the right decision through County Council to underwrite the project and fund the club.

In the next instalment - comedy and the cash cow

 Siân Caiach,

Monday 9 January 2017

The Scarlets - How a County Council Funded a Rugby Region - part 2

In the first part I described the beginings of the plan to build a new stadium at Pemberton, Llanelli, moving the home of the Lanelli RFC / Scarlets to an out of town site and use the proceeds of the sale of the site of the club's existing stadium and surrounding grounds for a suitable developer to build a huge and profitable housing estate.

 Much of the site was, according to the Welsh Government Development Advice Maps issued to planning authorities by Welsh Government was at the time of these plans, a C2 flood plain. C2 is an undefended flood plain and should only be used for vital infrastructure eg. a sewage pumping station . It should not, according to Planning Policy Wales. be used for vulnerable developments such as housing as people, their homes and safety would be at risk. Within a few years the entire site was C2 as sea levels rose.

 However it may have been expected that fellow officers in the Planning department and their compliant elected councillors would overlook any planning guidance. A good price for the land to the Scarlets will take them out of debt and in personal correspondence between the Council's Chief executive and The Scarlet's major benefactor Huw Evans, it is confirmed that a generous 106 payment - usually used for local infrastructure related to the area of the  development itself,- will be invested instead in the stadium

The County Council senior officers seek to fund the project by developing an old landfill site for a retail park and by selling part of this look to fund the stadium. This site is also on a flood plain, needs considerable preparation and has a large number of mine shafts running underneath it.

 What could possibly go wrong?

Unfortunately, Planning Policy Wales, the rules laid down by the Welsh Government can be appealed by anyone asking the WG planning office to call in a planning application which is being recommended for approval but clearly breaches government guidelines. So the application was called in and initially the WAG minister complied and did so.

Help was needed to stop Welsh Government from preventing an estate being build on a dangerous flood plain. It materialised in the person of Peter Hain MP, the Right Honourable Secretary of State for Wales. He decided to write to the Welsh Assembly Minister for Environment,planning and Countryside pointing out how important this planning permission was for the Scarlets in no uncertain terms and is basically asking him to bend the rules in this case.  The letter is below, .

After reading this plea from a politician who clearly outranks him, Carwyn  obviously wanted to comply. He probably realised that it would look odd, even corrupt, if he just relaxed building regulations on just one flood plain for the convenience of a favoured rugby club. So he relaxed the regulations for the whole of Wales. Any planning authority could now use his letter of instruction to justify building on flood plains and the Environment Agency [now NRW] was told that they no longer had a duty to object to developments an flood plains. Instead they could mitigate the potential flood problems, even if the usual "mitigation" involved raising the land and took no  consideration of where the flood water would be displaced to. In order to protect the future of a severely financially challenged rugby club and suck up to the Secretary of state for Wales, Carwyn Jones allowed any planning authority in Wales to build on any old flood plain. Technical advice note 15 can be disregarded as his letter to every local authority in Wales below shows.

 The message is that he doesn't care about the environment or the safety of the existing local residents in these areas. The underhand actions of the political elites depend on escaping scrutiny and evading publicity. No wonder  Tony Blair said that he regretted the Freedom of Information Act.

However, it takes time to find the right documents and a degree of expertise and understanding to put the story together. Many of these underhand actions probably remain hidden from the public.

How can we be happy to be citizens of a country where the rules are suddenly changed quietly without public consultation or any sort of vote by an elected representative under pressure from a more senior politician who acts as a representative of a private sporting club? How we trust Carwyn Jones now with this record of him as a minister changing the  rules designed to protect the environment and assure the safety of the people of wales, I presume his motivation was to only to further his career but he has harmed his country without a thought to the protection of  people and the environment he was supposed to defend. Selflessness,openness and honesty were obviously not on his personal list of Nolan Principles.

This policy change was only made public to a group of civil servants, tame Associations and industry organisations. Nor even individual  AM.s or County Councillors. including elected members of Planning committees, are specifically informed. The copy list includes civil servants and private enterprise professional associations who can now harvest a development bonanza by building on all that cheap flat land next to rivers and the coast which was not previously thought safe to build on..  As far as I know this ministerial letter of instruction has never been rescinded.

Carwyn would of course, get his desired  promotion to the post of First Minister.

Part 3 soon!

 Siân Caiach,

Thursday 5 January 2017

The Scarlets - how a County Council funded a Rugby Region - Part one

A lot of Carmarthenshire's County Councillors probably enter the chamber completely ignorant of any prior dubious dealings or failings of the Authority. I was lucky,  before my election as a County Councillor I was a local community councillor in the Hengoed Ward {which includes the Stradey area}.I was aware of some of the financial shenanigans and double dealing rife in the issue of the Scarlet's new stadium project.I watched in horror as our County Councillors were persuaded to give millions to the Scarlets Rugby club, ignoring independent financial advice and to the obvious detriment of my area and voters and impoverishing the council as a whole. And the fairy tale is more Brothers Grimm than Jackanory.

In 2002 an ambitious new Chief Executive Officer, Mark James, was appointed to Carmarthenshire County Council.  The Council then was controlled by a coalition between Plaid and the Affiliated Independents I was told that part of his interview pitch was the promise to build a new shiny stadium in Llanelli, just like a project he had started in Boston, Lincs, his previous post. Meryl Gravel the Council Leader and her executive board were all for it, apparently. And it wasn't going to cost the people of Carmarthenshire a penny, it was said. True,as it turned out, it was going to cost the local taxpayers millions.

The main aim of the plan was to bail out a seriously indebted club and put it back in the black. It was money ,primarily, which was the issue, not value for money. The guardians of the public purse were ready to act to "save" the Scarlets, by which they meant  not the team or its players but the financial fortunes of a group of business men who had lost millions in supporting the team.

Thanks to the Freedom of Information Act and the Sterling work of  local community activists, the background picture has gradually emerged and shows total control of the project by Council Officers and Llanelli RFC.

 Llanelli Rugby Club, as was, had acquired the ground occupied by the stadium and surrounding area very cheaply. It had been donated by the local Mansel Lewis family in the 1950'sfor the recreation of local people and was originally managed by the Athletics Association. The original stadium was built  largely from donations of materials and labour and many could still remember their older relatives helping with construction. The final capacity was 10,800 or so, Average gates were closer to 7,500.

A boggy area lying at the base of an artesian escarpment with many springs, it was deemed suitable for rugby pitches and was well used by the local community, not just for Rugby  The practise pitch area, outside the stadium was used locally as parkland, although when the club players or juniors were using a pitch it was vacated and often attracted a touchline audience . Children played, dogs were walked and the local Carnival utilised it too.

The original Stradey Park Stadium, now demolished

Naturally, in the elitist tradition of Carmarthenshire local government, it was not thought important enough an issue to consult local people or the town as a whole . There was no objection to renovating or upgrading the stadium site but to demolish it and build a stadium elsewhere had little support. It was not until the motivation became clear, the desire to sell the ground for housing to fund the new stadium and enrich the Scarlets financial backers, that anger grew. The land was clearly unsuitable for housing, was on a C2 flood plain and the build would also change the neighbourhood for the worse, increasing flood risk to the homes nearby, especially if the land was raised. The 450 houses originally planned were described as" a suburban slum".

Now the fairy stories emerged. The general line was that the Scarlets needed a state of the art stadium and there was no way of doing it other than to move it out of town, The Chief executive, Mark James and Director of Finance, Roger Jones sold the scheme to the Council political groups but were very economical with the truth.

From the documents I have been able to obtain the plans were made by discussion between Council Civil Servants and the club's management without councillors being involved. On 9th February 2004 Mark James attended a meeting with Llanelli RFC who confirmed their plans to form a public limited company. MJ confirmed that the "political groups" (the inverted commas are in the minutes, not mine) within CCC had been briefed on the proposals and unanimously supported the scheme. The commercial development of the out of town retail park at Pemberton was to fund the scheme. A project board was set up . Membership as follows:

For Carms County Council
Mark James,  Chief Executive
Roger Jones   Director of Resources /finance
Dave Gilbert   Director of Regeneration
Cyril Davies   Head of Corporate Property
Council officers John Tillman  [executive assistant] and Debbie William [press manager] also attended all later meetings I have records of.

For the Rugby Club:
Huigh Evans   Chairman LLanelli RFC
Stuart Gallagher, Chief Executive Llanelli RFC
Mike Bishop      Finance Directorate Llanelli RFC

Noticeably there is no involvement by Councillors. The reports back to them were probably not complete In the initial February meeting the cost of the stadium was estimated at £8-10 million.
 CCC had appointed a firm to assess the real costs of preparing the site and the build and start preliminary works etc and by June 2004 the costs had risen to £27m There was a £7m shortfall.

Rather than come clean with the representatives of the people MJ and RJ decided to prepare a report to convince the elected members that the club had the £7m covered, To quote from the minutes of the 29th June.

"MJ/RJ that is was essential that they be able to report to the elected members of the County Council that the shortfall could be covered by other sources of income, in order for members to have confidence to commit further sums of money to enable preliminary works to proceed.
A report was a requirement for progressing the project beyond the preliminary work already undertaken and would be made in September 2004. It would not be possible to seek the approval of Council for a proposal with a funding gap of £7 million."

"Huw Evans stated that the Scarlets wished to maximise return from the development of Stradey Park and that a contribution of £7m from this return would be difficult for the club."

"A discussion took place on this issue  as well as the position of the Chairman and Scarlet's shareholders. The division of the income from the proposed development of Stradey was looked at. RJ emphasised that CCC would seek to maximise grant funding and CD stressed that it may be possible to reduce some of the costs specified for the development, whilst also increasing income.IT was emphasised that any income from sponsorship, branding of the stadium etc had not been taken into account to cover development costs.

The conclusion was:-

Agreed that there was a basis to move forward, dependent on £7m being available from the Stradey re-development for residential use, to underwrite known costs at this stage.

 There follows a large block of redacted text under the heading  "Strradey Park",Too sensitive for FOIA, I presume.

wet conditions during the development at Stradey Park
It is not always clear from the minutes who is paying for what but CCC officers seem in control. The meeting ends with a statement  that the short list of planning consultants is 3 candiates, the news that CCC would be ready to enter into a legally binding contract in September and the submission of planning permission for the Stradey Park site is to discussed with the Head of Planning, Eifion Bowen. Inaccurate information had  by a third party. been provided to the press. DW was to put out an immediate press release regarding the Pemberton Site.

The pattern is now set, CCC officers are in control and trying to support the Llanelli RFC with as much help and money they can. Information released for both the public and the Councillors is to be carefully controlled.

"Success" now depends on selling Stradey Park, building houses on a flood plain with enough money left over to fill the £7 million pound black hole in the stadium budget and to pay off the club's debts.
Democracy, openness, public consultation and honesty have already flown the nest.

More to follow:

. Siân Caiach,