Last week saw a hugely significant development in the continuing saga that is the relationship between the London Borough of Broken Barnet, and Saracens rugby club, owned by Totteridge resident Nigel Wray.
The club has been found in breach of regulations on the capping of players' salaries, and awarded a massive fine, of £5.4 million.
Faced with the choice of an audit of their accounts, or relegation, the club has chosen relegation: an extraordinary choice, you might think, in the circumstances. The club's new Chairman issued a statement last week in which he said:
We carefully considered the option of a full investigatory audit. However, that inevitably would have involved a long period of more financial and emotional strain and this in turn meant this was not a viable option for us.
This decision, however, is one that has very serious implications for the £22 million loan that Barnet Tory councillors approved last year, so that Saracens could build a new stand for the stadium at Allianz Park, the former Copthall, which the council has given them for a peppercorn rent.
The £22 million loan was made possible by the council applying to the Public Works Loan Board, a source of government funding that was set up in order to finance the improvement of housing, education, and sanitation, and is used by many authorities still, exactly for that purpose. - or rather it was, as the PWLB is meant to be abolished.
In Broken Barnet, we do things differently, of course.
Barnet Tories, culturally averse - (if we may suppose that reference to culture is appropriate, in their case) - to the idea of public subsidy in the form of say, social housing, or welfare support - are still open to the idea of helping out struggling private companies in the form of rugby clubs. So what, if, in the case of failure, tax payers may end up paying back the loan?
So much has changed since the agreement between the council and Saracens was approved. Relegation means a drop in income - does this affect the risk level of Barnet's investment, and the future of the promised repayments? And ownership of the club has passed now to a family trust. Today there are reports on social media that even the Allianz sponsorship of Saracens may be under threat, which clearly, if ended, would affect the club's financial health.
What is Barnet's position? They kept suspiciously quiet about the latest revelations - but hats off now to fellow blogger Mr Reasonable for spotting that, sneaked into the agenda for tonight's Financial Performance and Contracts Committee, is an 'update' on the Saracens situation.
A report, written by the deputy Chief Executive, who as you will know from the FOI material published here, was prominent in encouraging this loan, states that Barnet has temporarily halted payments of the money to Saracens.
But the club has already received £3.2 million worth of the loan.
Even if no further payments are made, and it is likely that some will push for this to continue - will Barnet taxpayers receive a refund of this money?
And erm: what has the money been spent on?
We know that the stand has not been built, nor has the old one been demolished: the stand has been 'on hold' since last summer. It seems an awful lot of money to draw down in that case.
And are officers suggesting to councillors that this loan should continue, on the basis of assurances that everything is ok?
According to a story in the local Times newspaper, council Leader Daniel Thomas appears not at all worried by the recent developments. He claims:
... the Saracens loan was well scrutinised. It factored in a wide range of scenarios, including the possibility that the rugby club could be relegated.
That is why the sums drawn down are fully covered by a guarantee from a UK-based company.
Ah yes. 'Fully covered' by a guarantee from a UK-based company.
That would be, as we read in the report:
A Guarantee, covering part of the liability under the Loan Agreement, between Company A and the council capped at £10million ...
1.6. Company A’s assets are valued in excess of £20m, consistent with the
requirement for the value of the guarantor’s assets to be at least double the
value of the guarantee. Confirmation of Company A’s net asset value was
most recently provided on 29 July 2019 in relation to the position as at 30
June 2019. Informal assurance that the position is maintained as at 31
December 2019 has been provided, with formal assurance due by 29 January
2020. Oral confirmation that this has been received will be provided at the
So, according to the report written by the deputy Chief Executive, Cath Shaw - we had 'informal assurance' (do we? From whom?) about Company A on 31st December, and formal assurance is due - oh. By the date of the committee meeting this week, on the 29th January - but how curious: only oral confirmation will be given that this has been received.
Is this 'guarantee' - a formal assurance, in the form of oral confirmation, worth the paper it is not written on?
Why are the elected members of this committee not allowed to see this assurance, which presumably the senior officers will have?
I think this is pretty outrageous. Members and the residents and local taxpayers who ultimately bear the risk of paying back this loan, if Saracens do not, have every right to know the truth of the current situation.
This loan should never have been brokered by the senior management team, and quite clearly the reasons why that is so are now made evident.
It is time that there was an independent inquiry into how and why we became saddled with this loan, and those responsible held to account. Why so much time, disproportionate to any alleged benefits to the borough - time paid for by residents and taxpayers - was spent pushing this loan, is a question that must be asked.
Saracens' core values
If the authority wanted to use PWLB money for the purpose it is intended, for the improvement of vital infrastructure, for housing, education, sanitation, things that are fundamental to the well being and basic needs of any community, it would be understandable: especially housing.
Throughout the course of the negotiation for the Saracens loan, all eyes, it seems, were diverted away from the state of the borough's social housing needs.
The only focus of interest to Barnet Tories and their senior management team, as well as their Capita partners, is in development, on a mass scale, for profit, not as an answer to the real needs of local people, but for its own sake, and that of the various carpet bagging developers flocking to the open opportunities of a borough whose planning and regeneration service is now run by a privatised company focused on facilitating their schemes, and generating a huge income in the process.
The first of these schemes was in West Hendon: begun as a renovation of a council housing estate, somehow transformed, by stealth, into a luxury development on publicly owned land given away to Barratts, for the sum of £3.
Council tenants were in the way of this grand scheme, by the beautiful waterside of the Welsh Harp, so any moving in there were put on terms of non secure tenancy, maybe for ten years, with no rights, no knowledge of how and when they might one day be evicted.
As the monstrous tower blocks grew up around them, surrounding them with the dirt, noise and intrusion of constant construction work, the remaining social housing tenants and lease holders were left in decaying buildings, neglected, with no effective maintenance.
Last year the BBC's Victoria Derbyshire show reported on the state of the slum standard accommodation in which Barnet Tories had left their tenants in Marsh Drive, the last blocks of the old estate: here were families with babies and young children forced to live in squalor that would have shamed a Victorian slum landlord: damp and mouldy walls, infestation of rats and cockroaches - the latter biting the children, and crawling over food and eating surfaces - and no security to prevent drug addicts regularly entering the buildings to shoot up on the stairs outside their front doors.
Other issues were even more fundamental: the safety of the buildings themselves, with evidence of risks of collapse, gas leaks and fire safety.
None of this had been as important, however, as arranging the Saracens loan, or waving through more and more non affordable housing developments.
Not one Barnet Tory would appear on the first Victoria Derbyshire programme: in their place, suitably, was the disgraced former Tory councillor Brian Coleman.
The Leader would not appear, nor the Chair of the Housing Committee that had not met throughout most of last year - supposedly due to a lack of 'issues'.
Unluckily for them all, last week the same show decided to revisit the tenants of Marsh Drive, to see what progress had been made. In short, 'progress' consisted of a couple of wardens, inadequate to the task of replacing proper security; some belated attention to the rodent and cockroach infestation - and the news that in ten months they would be turfed out of Marsh Drive.
Where will they go? They didn't know. Non secure tenants have no rights, effectively, in Broken Barnet. They might be sent to another 'regeneration' estate, with similarly awful conditions. They might be 'decanted' miles away, to become the problem of some other authority - in Peterborough, or Milton Keynes, or anywhere - so what if their jobs and schools are here? And if they refuse to go? They have made themselves homeless.
As for jobs ... as was exposed on the second Derbyshire show, and reported here, when Helene Richman, one of the new Tory councillors for West Hendon, was at a meeting with tenants, she informed them:
We don’t want to pay for you to live for free your whole life because you don’t have a job.
Told by the outraged tenant that they did have a job, she then commented that they should 'move somewhere cheaper'.
When asked about this, Leader Daniel Thomas, now forced to appear to defend his administration, said that such comments were not the view of his party. Oh.
Tory Leader Thomas on the Victoria Derbyshire show
When asked if he could live in conditions like Marsh Drive, he agreed that he could not.
Which means that he was quite happy to leave others living there, because he had no sense that anything that was intolerable for him should be considered unacceptable for others.
Here in these statements by members is the key to the mind of a Barnet Tory: the absolute lack of empathy, or ability to see others who are different to you as as worthy as you, or as important as you, or to try to imagine what the effect of hardship might be on their lives.
Thomas stated that it was precisely because of the conditions of Marsh Drive that 'we' are regenerating the estate, and other estates.
This is not true. Marsh Drive has been allowed to deteriorate during the long years of this faux regeneration, which was intended to improve the buildings lived in by social tenants but will see luxury housing displacing those who lived there.
And the same story is true all around the borough. Rather than invest in new social housing, or borrow the money to invest in social housing, to accommodate them in decent homes, they will decant them elsewhere, waving in an army of developers to build non affordable new housing, at vast profit - for others to live in.
All of this amounts, for once inarguably, to an act of social cleansing, as was observed on Monday night by Labour councillor Sara Conway, at the 'Housing and Growth' committee at Hendon Town Hall.
The room was packed with angry residents, most of them tenants from Marsh Drive, including three who had featured in the Victoria Derbyshire show, and who had submitted questions. Faced with a furious room of residents, and mindful of the fact that the proceedings were being filmed, the Tory Chair Cornelius, previously the Tory Leader, failed to apply the ludicrous new gagging rules on public participation, as all three asked questions of the committee.
Simone asked if Cornelius, faced with evidence about the Marsh Drive buildings being unsafe, did not consider that there was a 'risk to life'. With all the confidence of a very comfortably placed man who lives in a lovely house in Totteridge - and who once appeared for a tv interview on the 'grotty' (his word) West Hendon estate in a silk cravat - he answered merely - No. Residents in the public seats (those that had not been taken up, in the usual arrogant manner by the senior officers and Capita managers, before the public are 'allowed' in) erupted in derisive laughter.
Cornelius later commented, with wounded pride, how offended he was at the suggestion that under his leadership Barnet had not achieved anything in terms of housing. I suggested, as loudly as possible, from my seat, while scribbling notes, that he had at least managed to make Barnet the worst slum landlord in North London, which was an achievement, of sorts. He did not entirely welcome this observation.
Marsh Drive residents filmed as they watch the Tory councillors at the committee meeting
Marsh Drive tenant Ahmed Padori, who had so efficiently held Dan Thomas to account on the second programme, managed to get away with a speech to the table, in which he tried, with great articulacy and dignity, to educate the empty headed Tory members as to the impact on tenants of their appalling situation, not just in the squalid buildings in which they have been left, but in terms of the anxiety and uncertainty that hangs over their future. He briefly broke down when talking of the inability of his children to feel secure, to put down roots, - to be enabled to achieve: all the things you would think the neo-Thatcherite Tory group would want to encourage.
He pointed out that they should not have to demand things that they deserve by right. He explained the anxiety created by facing homelessness if they refuse whatever terrible place they are offered, eventually, before eviction from Marsh Drive: he claimed tenants on the estate had been threatened with having their children taken from them if they did not co-operate, and spoke of the 'lies and abuse' experienced when dealing with Barnet Homes. He spoke of the fear of not knowing if your children would be able to stay at the same schools - again, he stressed, to achieve their potential. He ended with a plea for support from the Tory members, a request that will always go unheeded by ears that cannot register the sound, in the dust ridden air of the committee room, of this Town Hall: to 'do the right thing'.
Do the right thing.
Dan Thomas sat defensively at the table, next to the vice Chair of the committee, Sarah Wardle, who quite properly made declarations at the beginning of the meeting in regard to the fact she lives in the new development, and is also employed by the Built Environment Communications Group, BECG, which is active in many developments.
Also present for the Tories was a West Hendon councillor Alex Prager, Cllr Smith, and Group chair Peter Zinkin. They appeared to have little to say. Well: what could you say?
Thomas, who as you may read above, had refused to intervene in the crisis at Marsh Drive, now filled in the empty space of nothing to say, with a stream of ill judged comments to the effect that he could do nothing to offer any firm offer of a more secure tenancy, in decent housing, that the authority could not give 'lifetime' tenancies anymore - because it wasn't 'fair'. Apparently what is fair is to leave people for years on end, and what must seem like a lifetime, in non secure tenancies in virtual slums, as they have done in West Hendon. Oh, and it would be wrong to prioritise, as Labour proposed, to give priority to the tenants of Marsh Drive, because there might be people in 'greater need' than them. FFS.
After refusing to support Labour's common sense proposals, or to recognise any duty to their tenants, under any vestigial sense of humanity or decency, the Tories turned their face away from the results of their own abominable work, and moved on to the next item.
The residents left in disgust, and who could blame them? They and their children return to damp, mouldy, infested and unsecured buildings, addicts shooting up on the stairways, and burglaries - there was another one last week.
As Sara Conway commented, what happened in West Hendon, and what remains in Marsh Drive, is not by chance, or a recent development: it is the result of years of indifference and neglect - the result of choice: a deliberate Tory policy. This council has never hidden their underlying agenda: yes, one of social cleansing - (and some might argue, gerrymandering, I muttered to myself). The previous Tory housing lead (ignoring Gabriel Rozenberg, who was Chair last year, before self identifying as a Libdem, but had almost no meetings to attend) was Tom Davey, who boasted openly about his group wanting only residents who did not need affordable housing. Social housing has never been wanted, or accepted in principle, in Broken Barnet. The very idea! Why would you subsidise the cost of housing?
Subsidy, as we know, is only acceptable for those we approve of: which brings us back to Saracens, and the £22 million handout from public funding.
As you can see here, in the material obtained by FOI, two officers who thought this deal was a good idea were the deputy CEO, and Stephen Mc Donald, both of whom were present last night.
Mr McDonald - who is apparently now 'Director of Growth' - commented in the trail of emails uploaded in the post that he thought the loan arrangement was 'the right thing to do'.
Two stories, two versions of 'the right thing to do'.
Decent homes for families, or handouts for rugby clubs.
You know how this ends.
This is Broken Barnet, after all.