by Salford City Council has been criticised for granting a ‘hidden’ loan to a rugby league club.
The council paid Swinton Lions £100,000 in March after being told the club was at risk of “cash flow” problems. But the Salford Conservative group said it had not been informed of the payment and the decision had not been made public.
THE Manchester Evening News It was said that Swinton Lions had yet to repay part of the loan, which has accrued almost £3,000 in interest since March, as well as a penalty of around £3,500 for the missed payment.
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Salford Council said the loan was granted in accordance with the authority’s decision-making processes and current legislation.
This week Salford City Council – which had to plug a £5.9m black hole in its latest budget – announced plans to provide a second £100,000 loan to the rugby league club, drawing criticism from Conservatives in the council chamber.
Councillor Robin Garrido said he had “a number of concerns” about the situation. He said he was not against financial support for Swinton Lions after the council had previously lent money to Salford Red Devils rugby club, but he raised concerns about the council’s lack of transparency over the initial £100,000 payment in March.
He added: “We were not informed of the first loan and we should have been in my opinion. Why was it hidden? There was no notice of decision. The normal protocol is that there should be a notice of decision even if technically it is not necessary.
“We then come to the decision on Friday. Normally the CFO and the CEO should sign it, but that’s not the case. It was signed by the mayor of the city.
“We have a number of concerns about this. One of them is that decisions are being made without the knowledge of the official opposition or other members. That is a concern that we need to address.
“Another question is: should we have given Swinton Lions the extra £100,000? I don’t see how we can accept anything like that until we have firm guarantees that the previous money will be repaid.”
Salford Conservatives could “recall” the council’s second £100,000 loan to the club, meaning it would face further scrutiny before being accepted.
But Swinton Lions chief executive Stephen Wild said the loans were “vital” to help the club become self-sufficient.
He told the MEN:“We were fully aware in 2021/22, as we were developing and implementing a post-Covid recovery plan, coupled with a sudden drop of over £150,000 in annual central funding to our sport’s governing body, that we would experience cashflow issues over the next two years.
“We have discussed these matters with Salford City Council who have provided the club with an initial loan of £100,000. I stress that this was a commercial loan repayable with interest and underwritten by personal guarantees from the directors.
“A further loan of a similar amount with guarantees was then discussed, as well as a revised repayment plan that would cover both tranches.
“No donations have been made to Swinton Lions RLFC. However, these loans are essential to facilitate the ongoing internal restructuring and savings that will enable the club to become self-sufficient, whilst indirectly supporting the wonderful work of our Lions Foundation, which brings significant socio-economic benefits to the town of Swinton itself, but also to the city of Salford as a whole.
“We are extremely grateful to Salford City Council for their understanding of our situation and for recognising that as one of the oldest rugby league clubs in the world, the Lions are an important local historical institution.
“It is also a recognition for our Foundation which, in a short space of time, has mobilised 30,000 people and created social benefits for the city estimated at £2 million.”
A Salford City Council spokesperson said: “The council rightly recognises Swinton Lions RLFC, its founding branch, for all it does for local people and our city.
“The club is approaching the end of the current season so the loan will help to support the club financially whilst new options are considered. This financial arrangement has been made in accordance with the board’s decision-making processes and current legislation.
“Swinton Lions was founded in 1871 and the club is an important institution in our town, helping to promote health and wellbeing. They also work with local schools to encourage young people to stay healthy and active and help them reach their full potential. In addition, the club employs local people and has contracts that support wider employment.
“In Salford we are also developing a strategy for rugby, to support grassroots rugby and maximise the economic and cultural value that rugby brings to our city. We want to see rugby league in every school in our city and to embed the legacy of the game for future generations of Salfordians to enjoy.”
Salford City Council has also provided loans to Salford Red Devils rugby club recently. In March, it gave the club £315,000 in “immediate” financial support after Salford Red Devils asked for help to secure its long-term future.
Councillor Garrido has previously raised concerns about payments to Salford Red Devils, as well as the council’s plans to buy the Salford Community Stadium, where the Red Devils and Sale Sharks play.
