SHARE

Newham Council has admitted that the £40million loan to help Premier League club West Ham move into the Olympic Stadium may never be repaid.

The east London borough said the loan was ‘damaged’ and not currently being paid off because the stadium was failing to make a profit.

Newham stressed the loan had not been ‘written off’ but appear to give up any hope of getting back the cash.

Newham Council have admitted a £40m loan that helped West Ham move into the Olympic Stadium may never be repaid because the venue doesn't turn a profit 

Newham Council have admitted a £40m loan that helped West Ham move into the Olympic Stadium may never be repaid because the venue doesn't turn a profit 

Newham Council have admitted a £40m loan that helped West Ham move into the Olympic Stadium may never be repaid because the venue doesn’t turn a profit 

West Ham moved into what is now called the London Stadium at the start of last season

West Ham moved into what is now called the London Stadium at the start of last season

West Ham moved into what is now called the London Stadium at the start of last season

The admission has sparked concern from councillors and residents as the borough, one of the most deprived in the country, faces further austerity.

The £40m deal was agreed by the council back in 2012 through its Newham Legacy Investments Ltd (NLI) in conjunction with the London Legacy Development Corporation (LLDC).

The money paid for the conversion of the stadium from the London 2012 athletics venue into a football ground up to Premier League standards. It is now known as the London Stadium.

The LLDC had initially invested £257m towards the refurbishment costs and West Ham contributed £15m as they were granted a 99-year lease on the stadium by then-Mayor of London Boris Johnson.

Bubbles as West Ham walk out for Monday's Premier League match with Huddersfield Town

Bubbles as West Ham walk out for Monday's Premier League match with Huddersfield Town

Bubbles as West Ham walk out for Monday’s Premier League match with Huddersfield Town

According to the Newham Recorder, NLI currently owes £44.4m after declaring a loss of £41.6m for 2015-16 and a further deficit of £2.5m in 2016-17.

It is because of a poor year financially for the London Stadium, which hasn’t made the expected income from events.

Mayor of Newham Sir Robin Wales said last week the council was working with the Greater London Authority and the LLDC to ‘improve the financial performance of the stadium.’

He said: ‘It was an honour to host the para-athletics and the IAAF World Championships, but in future years large music concerts are likely to raise more revenue.’

Newham Labour councillor Rokhsana Fiaz told the Evening Standard: ‘It’s alarming for residents to read about a £44.4million impairment relating to a loan Newham council has given to refurbish West Ham’s stadium via a company it owns.

The London Stadium was plagued with problems at the beginning of last season

The London Stadium was plagued with problems at the beginning of last season

The London Stadium was plagued with problems at the beginning of last season

‘I have asked for urgent clarification and details including any further financial implications facing Newham Council.

‘Residents need assurances that their money hasn’t been wasted and that the financial benefits promised from this much-heralded council investment continue to flow.’

A spokesman for Newham said: ‘The loan is shown, for accounting purposes, as currently ‘impaired’, or damaged, due to the current financial performance of the stadium.

‘It is not a write-off of the loan… it was widely anticipated that the first full year of trading would be particularly challenging.

‘Newham council is working with the Greater London Authority, the London Legacy Development Corporation and our other stadium partners on a range of options to improve the financial performance of the stadium.

‘The future value of our loan, and its treatment in our accounts, is directly linked to that future performance.’

Newham Council said the £40m loan hadn't been 'written off' but was classed as 'impaired'

Newham Council said the £40m loan hadn't been 'written off' but was classed as 'impaired'

Newham Council said the £40m loan hadn’t been ‘written off’ but was classed as ‘impaired’

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here