Herefordshire Council and Hereford United linked by council's "arm's length" company (From Hereford Times)
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Herefordshire Council and Hereford United linked by council's "arm's length" company
An HF business plan from 2011 reveals the role of the “arm’s length” company set up by Herefordshire Council also played in advising the council over the future for the ground and to lead negotiations with development partners.
The report - confirming a direct link between the council, the club and HF - refers to the ground as “generally in a state of considerable disrepair” with the club constantly facing the challenge of maintenance to a standard required by the Football League and other statutory authorities.
That acquisition of the club in 2010 and subsequent buying of debt is said to have “cleared the way” for HF to lead negotiations with the club on the council’s behalf over redevelopment.
The report says the club had appointed “professional advisers” with HF supporting the club’s work in identifying potential development partners and “suitable uses” for the ground.
As reported by the Hereford Times earlier this year, Herefordshire Council has paid out nearly £3 million in financial support to HF over years.
The council has denied that the sum shows HF as having been “exclusively funded” by the public sector, either directly or indirectly, throughout its existence.
However, the council has conceded the appearance of having “wholly funded” HF since 2012.
HF was set up by the council in 2010 as an “arm’s length” company to drive redevelopment in the city.
It was a successor to Edgar Street Grid (Hereford) Ltd.
In May last year, the council confirmed HF was being wound up.
The company – with the council acting as guarantor – was not subject to audit and accountancy obligations that apply to regulated local authority companies, nor was it covered by Freedom of Information regulations.
Figures produced for a council scrutiny report show the council’s total contribution to HF from 2004-05 to 2014-15 to be £2,891,556, with a peak annual contribution of £409,405 in 2012-13.
Support over the last financial year is shown as £355,322, reducing to £130,628 in 2014-15.
The council funded a five-figure pension contribution to the chief executive of HF.
In the year ending March 2013, HF made a contribution of £31,392 to chief executive Jonathan Bretherton, compared to £12,667 in the previous financial year.
The council has conceded that as the sole funder, to all intents, of HF since 2012 it had, in effect, funded the payment.
But the payment, the council said, was a decision for HF recommended by the remuneration committee and sanctioned by the HF board.
The council says it was for the HF board to determine how to reward its chief executive, and he had advised officers he exercised a contractual option to waive salary and to take payment as an additional pension contribution instead.
Concerns were raised over any “residual liabilities” in relation to this pension with HF wound up.
Councillors and the council’s former chief executive attended HF board meetings, with the council saying that any councillor who attended an HF board meeting would have done so only “in their capacity as a director of the company”.
In March, the council effectively ruled out further scrutiny investigations into issues around HF with a tacit acceptance that “things could have been done better.”
The council is now under increasing pressure to “come clean” on what it knew about Hereford United's finances ahead of the leases relating to development at Edgar Street being re-assigned five years ago.
As landlord to the ground, the council has ruled out an immediate scrutiny inquiry into the handling of the re-assignment.