Star date: 8th December 2012

A Salford Star Exclusive


Having finally forced Salford City Reds to reveal its accounts, the Salford Star now believes that if Tuesday's £750,000 loan to the rugby club goes ahead, it will take Salford Council's support to the club in loans and payments to well over £3million – at a time when the Council is being forced to make cuts to public services and jobs.

Full story here…

Salford Council Urgent Key Decision Notice for Salford Reds
click image to enlarge

For weeks there has been speculation about just how much financial support Salford Council has provided, and is about to provide, for Salford City Reds rugby club.

The Salford Star, in possession of a loan contract for £1million, plus a quote from former Council Leader John Merry admitting to a further £350,000 loan, has reported the total loan figure as £1.35million. Karen Garrido, Conservative opposition leader has publicly stated that the loans totalled £2.2million. We now believe the figure is £2million.

With a media leak informing that the Council is about to provide a further £750,000 loan to be ratified in secret on Tuesday, the Salford Star understands that, with other payments, this would take support for the Reds from public money to over £3million. At a time when more cuts to public services and jobs are about to be announced.

With the controversial decision on the £750,000 Council loan about to be made - with no `call-in' scrutiny allowed - the Salford Star was wondering how the City Mayor, Ian Stewart, could agree this without even a set of accounts from Salford City Reds being lodged at Companies House.

Yesterday, we revealed that Companies House itself was proposing to dissolve the Salford Reds company, Salford Football Club Company (1914) Ltd, if it didn't produce accounts (see here). A few hours after the article appeared, Companies House had received those accounts which were accessible this morning.

The accounts were prepared by James Barden, Senior Statutory Auditor at Barlow Andrews LLP in April 2012, were due to be lodged with Companies House in August, and yet were only produced yesterday. Questions must be asked whether the Reds board were trying to hide them from the public before Tuesday's decision.

The `abbreviated accounts' (as opposed to `full accounts') are a snapshot of the rugby club's financial health for the year to November 2011 – and show that it had `current liabilities' and `creditors' totalling £4,594,604*

The accounts also show creditors `amounts falling due after more than one year' of almost £1.9million, which we believe could be the `hidden' loans from Salford City Council.

The Salford Star is not full of accountants - and if we've got this wrong we'll hold our hands up – but the Salford Reds accounts show `creditors: amounts falling due after more than one year' as £872,654 in 2010, leaping to £1,878,497 by 2011.

Although it's not stated anywhere in the accounts, we believe that these are the Salford Council loans. The hunch is further underlined at the end of the accounts where it states `the aggregate amount of creditors for which security has been given amounted to £1,013,497', with an amount for 2010 of £872,654.

Add them up and, given added interest and some payments back, the figures more or less match up. Almost £1.9million.

Now, looking at Salford City Council's accounts for the year 2010/11 the picture becomes incredibly complicated, or just full of creative accounting. The accounts state that in April 2009 the loan to Salford Reds was £240,000 – but the `long term loan' in March 2010 was £500,000 and, in March 2011 £1million.

While the accounts show this £1million loan in March 2011, the contract that Salford Star has showing a loan of £1million wasn't signed until April 2011.

Meanwhile this year's accounts for Salford Council show a long term loan of £1million for March 2011 and long term loan for March 2012 at £800,000 with £200,000 `current'. While the figures look like they are all the same £1million loan, we now believe that they are two separate loans totalling £2million from Salford Council to Salford City Reds. And, cross referencing with the new Salford Reds accounts, this would appear to be the case. We challenge Salford Council to prove otherwise.

On top of these £2million loans, there was also a bizarre payment of £250,000 from Salford Council to Salford Reds for the Willows car park lease; funding and grants to the Salford City Reds Foundation of over £350,000, of which over £200,000 found its way back to the rugby club; plus £5000 direct sponsorship to the Reds (see full details here).

If the further £750,000 loan goes ahead on Tuesday, payments and loans from Salford Council to Salford Reds will total over £3million, if our figures are correct…

…And if the figures are correct, so many questions remain unanswered, such as…

 Why Salford Council hasn't come clean as to how much public money it's actually handed to Salford Reds and if there is any more that the public doesn't know about

* If there were two loans of £1million - what was the security on the first loan?

• Why Salford Reds didn't show its accounts until yesterday, with a decision due on another public money loan on Tuesday

• Why John Merry, the then Leader of Salford Council only admitted to a loan of £350,000.

• Why City Mayor Ian Stewart has shrouded negotiations and funding for Salford Reds in secrecy

If anything should be subject to Scrutiny at Salford Council, it is its dealings with Salford City Reds and the advancement of another £750,000 loan. Yet the Chair of Salford Council's own Finance Scrutiny Select Committee, Councillor Dave Jolley, has signed off a request by the Council that "an Urgent Key Decision be made without being published in the Forward Plan, and/or that the Key Decision be exempt from Call-In for Scrutiny".

Even Salford City Reds supporters on the fans forum, some of whom delight in slagging off the Salford Star, now believe that the ongoing, unaccountable support for the club is kind of immoral in a climate where jobs and public services are being cut.
See Scarlett Turkey Fans Forum for further details…

See previous Salford Star article - Salford Council To Bail Out Salford Reds - click here

• The Salford Star is not interested in the day to day running or finances of Salford Reds, being a private company – only the accountability of public money that has been poured into the club.

* The `abbreviated accounts produced until November don't reveal much detail, like turnover, dealings with related companies etc but do give a snapshot of a company's financial health. And they show that in November 2011 the club had to stump up almost £3million over the next twelve months, with `current assets' of only £221,209, including £185 cash in the bank, and `fixed assets' of only £15,724.

Minus those assets, Salford Reds had `Net Current Liabilities' (amounts due in one year) of £2,716,107, and Creditors (amounts due after more than one year) of £1,878,497 – making a total of £4,594,604.

The accounts state that "the company has received loans from subsidiaries of The Wilkinson Corporation Limited and pension schemes…Without these loans, the company would be unable to meet its working capital requirements."

The statement, which makes no reference to Salford Council loans, adds that the directors won't push for repayment "unless other sources of funding become available", and hoped that, with the move to the new stadium, "revenue streams should increase to a sustainable level"…


No.9000653357787 wrote
at 06:34:55 on 27 December 2012
Freedom of information act, and birds home to roost sadly for the council
Insider wrote
at 06:31:20 on 14 December 2012
We and my colleagues in the council staff call this kind of crap urban plannig "Merryisms" . Usually supported by overpaid (£200K) per year "Scary Spicerisms" which mean decisions were made by John "scruffy" Merry and Scary Spicer without any thought of how they impact on the communty. Regeneration at any cost. As usual no challenge form Hinds and co provided they get their expenses ect they are happy.We now have an overpaid Regenration Director Karen Hurst (£129K per year plus exs) who came from the same stable (URC) as the overpaid scouse consultant Chris Marsh. When is our Faceless Mayor going to do something useful other than run an xmas card competition.!
Insider wrote
at 07:40:29 on 13 December 2012
So James king in spite of you trying to out me my claims were right! You really must try harder to intimidate a whistleblower! I will continue to reveal on here what our Mayor, Deputy , Scary spicer and those useless assistants mayors do to ruin this City. There does appear to be a similarity between you and Councillor King ie you both spout crap!
James King wrote
at 09:32:44 on 11 December 2012
If i was Councillor King would i be calling the council the "clowncil" in my comment, it just happens i also am called James King and i put that instead of hiding behind a made up name. I will say again anyone with evidence get it made public, i like many others would like to see this clowncil brought to justice.
Salford Star wrote
at 07:48:25 on 11 December 2012
See comments below - no, we don't think this is Councillor King, in fact, we're pretty sure of it.
Insider wrote
at 07:45:43 on 11 December 2012
To Councillor JIm KIng _ The bullying comment you have made on here about me just shows what it is like to work for Scary Spicer, a useless Mayor, ignornat Lancaster and those weak ineffective assistants who challenge nothing! I will continue to reveal how coucnil money is wasted whether that be inflated wages of scary(£200K), your allowances or those hidden loans and venture companies the coucnil secretly run! Catch me if you can! King!
Joking James King wrote
at 07:45:28 on 11 December 2012
Is that former Mayor James King? Is he encouraging "insider" to become a whistle blower? I,m pretty sure that would result in him/her losing their job. If you are Former Mayor King, can I suggest that you do a bit of whistle blowing as I,m sure you will have more interesting things to tell us. Maybe standing by and saying nothing is the best option if you get paid to do it?
James King wrote
at 15:58:58 on 10 December 2012
Insider you seem to work for either the club or the clowncil so to finish this story i suggest you take your figures to the relevant press officer and ask him/her to release these and all other related figures to the media. You then will not need to waste any more of the public money we pay you writing unsupported statements on here that you are not prepared to back up.
Winston Smith wrote
at 15:57:14 on 10 December 2012
There should be a law that says councillors should personally act as guarantor on loans like this. If they're so certain we'll ever see the money again, they'd have no good reason not to, would they?
Salford Star wrote
at 14:39:04 on 10 December 2012
See Insider comment below...Ok so we now have Salford Council giving the Reds loans of either £1.35m or £1.5m or £2m or £2.2m. Doesn't the fact that no-one knows for sure say something? If you have evidence of £1.5m please send it over. And, even if the true figure is £1.5m in loans - add on the £250k car park, the £350k to the Foundation, the `up to £750,000' loan plus Council officers time, £5k sponsorship and who knows what else,and you're looking at near enough £3m anyway...
Insider wrote
at 14:33:03 on 10 December 2012
Short on facts. Uses the lame excuse 'if we cant understand what accountants say, dont blame us for getting things wrong'. Ridiculous. Couldnt be taken seriously by anyone with half a brain. The council has given the Reds £1.5 million. (actually its precisely £1.497 million). The proposal is to contribute UP to £750,000 more - it could be a lot less. Its not £3million - thats just fantasy land. Stick to the facts and you might gain some credibility.
Not as disillusioned as Bewildered wrote
at 09:44:13 on 10 December 2012
Bewildered, you summed up my thoughts on people like you to the letter. Go and write your "drivel" elsewhere, if these so called "wild accusations" are not correct why don't both the council and the club answer the questions put to them? If they put the facts in front of us all regarding the "investment" of public money instead of doing things in secret then this article would not be here and nobody on here would have reason to demand answers.
James Walsh wrote
at 09:43:55 on 10 December 2012
Quality article, would it be possible that Salford Council money ring-fenced for the Quays Cranes restoration has been spent, & is continuing to be spent, on loans to the rugby club ?? James Walsh (Save Our Cranes, Save Our Heritage Campaign)
T Wright wrote
at 09:43:27 on 10 December 2012
Doubtless 'Bewildered' is one of the little nobody non-job clowncil muppets , who live the good life by robbing the Taxpeyers of this Dead City . Obviously , this excellent article has rattled the inept wasters at Clowncil H.Q. I demand an independent investigation into this squandering of OUR money , with the cretins involved made personally responsible to return OUR money back to the ripped-off , shafted Taxpayers .
Salford Star wrote
at 07:21:37 on 10 December 2012
See `Bewildered’ comment below… No name on it, of course. Brave. If this article is `drivel’ maybe you’d like to explain why it’s drivel, given that every single figure is taken off Salford Reds and Salford City Council accounts? If there’s confusion it’s because the accounts are virtually impossible for anyone who is not a very smart accountant to understand. Yet, how many times do we have to repeat it, this is public money we’re talking about - £millions of it. You might think investigating that is `drivel’, we call it accountability. PS the Salford Star website has never been so popular, we’re delighted with how it’s going, so thanks for asking.
Bewildered wrote
at 07:21:05 on 10 December 2012
Sadly the Internet has given a voice to frustrated cranks who are disillusioned with their daily grind. This gives them the chance to 'publish' badly written drivel such as this. No name on it of course. Brave. Some wild accusations here, accompanied by an astonishing amount of ifs, buts and self doubt, followed up by the usual no life busybodies in the comments. Honestly, if anyone thought more than about 3 people read this site it would no doubt have been sued into non-existence long ago as there is no attempt to abide by any rules or code. How high is the print run these days? Going well is it?
odear wrote
at 14:25:42 on 09 December 2012
Adar you quote 3000-4000 supporters, that is less than 2% of the population of Salford, i am sure a much larger percentage of the population of Salford used the services that have been cut by this council. As for wanting the club dead, no i don't think many want that, but the club must be run within it's means and not rely on funding from public money, and that unfortunatly may result in it's withdrawal from super league, however real die hard fans of the club will not be bothered by this, it will still be Salford reds and the real fans will still go and watch the games. Unless you are as you what you accuse others of being in another article on here "glory hunter of clubs".
Mary Ferrer wrote
at 08:25:49 on 09 December 2012
Having read the artical in the m.e.n today I know what some of the £750.000 is going to be used for, it will be used too pay off the two players who were going to take the club to Court for none payment of their wages. The artical also says the club still has an outstanding bill to the Tax man for something like £150.000, so I suppose that will also come out of the money. Its great WE are now paying the bills for the players and I expect the tax man as well. Lets not forget this Labour Council have put in mothballs the grade two listed Mansion House in buile hill park for the last 5 years for Mr Wilkinson and Mr Watson.Given them planning permission for a hotel and then extending the time on the application,because guess what, they did not have the money to do the project,and no bank would give them a loan. We lost a lottery bid for the park that would have been worth £4Million because of the hotel plans.During this time we have had to maintain the Mansion,because the city still own the building (thank God) This Council have a lot of questions to answer. All I can say is that £10.000 Mr Wilkinson gave our Hazel Blears some years back,was the best investment he has ever made ,because just look at what he has got in returm. This Council has a lot of questions to answer.
Stephen Kingston wrote
at 08:25:41 on 09 December 2012
Hi Adar Molyneux - I'm sure that's your real name - no-one wants to see the club dead. What I personally want to see is Salford Council being open about its dealings with public money, so there can be a proper debate with people in full knowledge of the facts. There's been way too much secrecy and economy with the truth. Do you think that's any way to run a city?
Adar Molyneux wrote
at 08:16:08 on 09 December 2012
OK so this paper has done some investigative journalism. Now what?? Do you want the club dead or something which will hurt 3000-4000 supporters or a genuine hope for the club to turn around Stephen?
Tony Packer wrote
at 15:43:37 on 08 December 2012
Salford Council have already lent the Reds £2,000,000. Going forward the Council will not only need to provide a further £750,000 but each year the Reds will need at least a further £400,000 to cover losses. The funds being given to the club will probably be used to pay back loans from Wilkinson,s company, without this he will go bust.
mary ferrer wrote
at 15:43:15 on 08 December 2012
The first loan of £1MILLION+ took place 2008 or early 2009.I have an email I sent to someone dated December 2009 where I wrote about the loan and the securities,one being the Harold Riley paintings.In the statement of accounts for the Reds dated November 30th 2010,it states and I quote "The investments a set of paintings which were valued by Bonhams on 25th Feb 2009.On a historical cost basis the value of the paintings is £NIL.Now I think this could mean that they are CRAP or that they had already been given to the council as security and if that's the case, how the hell were they given again in 2011 as security.So somewhere out there must be proof of this and I bet other loans that we don't know about.The Reds have charges on the former site which is part of their securities on the loans to the council,they being. The Cooperative bank £2.200.000.Wilkinson pension fund £1.700.000.This was back in 2011.The statement also states that and I quote" Also within other creditors is a loan from Salford City Council which is secured on fixed asset investments and by personal guarantees from the directors J A Wilkinson,H Claugue, R I Watson.The £250,000 the Council paid for the lease on the car park was in fact another hand out by the backdoor.Quote from Decision notice."This would enable a RECYCLING of the £250.000 into the rugby club,reducing the clubs borrowing needs" I also like the quote from the city solicitor "There appear to be some creative financial manoeuvres here,and the assessment of risk above seems to be optimistic and on the low side" But they went ahead and bought the lease back and in doing so gave more of OUR money to the club. While services are being cut and staff within the council are worried abut their jobs.This council can find another £750.000. Wonder what services will suffer so we can keep a private company afloat.
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