SALFORD City Reds' finances are in question after the council agreed to give the club a £350,000 loan.
The club has until 2012 to pay back the money. It is understood part of the cash will be used for day-to-day running of the club, specifically the club's community programmes.
Last month, it was revealed the council is planning to borrow £20m to build a community sports stadium at Barton - which the Reds would use.
Liberal Democrat councillor Mary Ferrer said: "I find it appalling that we can be lending money this way. It is a worrying situation if a loan of this size (£350,000) is required by the club and they are still planning to go to Barton."
And Conservative leader Cllr Karen Garrido said the Reds must have a better business plan.
She said: "The future all depends on the business plan. If this business plan does not stand up, then this money should not be used. At this moment there has been no commitment from the club for it to stand up."
The Reds' current ground does not meet league standard and it is no longer owned by the club. Residential property developer Godilman Watson Homes purchased The Willows last year.
Planning permission for a £35m, 22,000-seat stadium was given in in 2006 and with the council's investment, the new facility in Barton would meet this requirement.
Property giant Peel Holdings, own 30 acres of the proposed site at Barton and Salford council 40 acres. A joint venture company is being set up between the council and Peel to deliver the stadium.
And Cllr Garrido wants to ensure the stadium is for the entire community and not simply for the Reds and their Super League status.
She said: "As far as I am concerned we have signed up to a community stadium. The stadium is a joint venture between Peel Holdings and the council. Salford City Reds will be one of hopefully many tenants at the stadium."
Salford council leader John Merry said: "We're committed to ensuring the club sees its way into 2012 at is new stadium, and last year we provided a loan of £350,00 to them to help them do this.
"Salford City Reds is a Premiership club and its presence plays an important part in the city's economy and its future. The club puts back a lot into our communities and works tirelessly with young people and schools and we will support it, like any other organisation that benefits the city in such a way."
Liberal democrat leader Norman Owen said: "It is not the first time we have leant money to the Reds. We are allowed to do this by law.
"We know there needs to be security to make these kind of loans and if there was a great risk, I would not be in support of this."
A club spokesman said: "The secured loan from the council has been vital in sustaining the club's community program. Salford City Reds take great pride in the work our award-winning community team delivers throughout our City.
"We have responded to the economic downturn and where possible made cut backs throughout our operations. The work that we are committed to in our community is the one area where we are reluctant to compromise - and in fact are continuing to develop and expand the programs within the city for the benefit of the people of Salford.
"The club has over the last three years also invested heavily on the renovation of our academy facilities. This provides an essential base for our scholarship, foundation and academies which delivers coaching and education at the highest level to pupils in Salford.
"Last week saw the launch of our latest community investment - The Red Devils Learning Zone - situated within the current stadium and tasked with delivering educational programs for both adults and children in Salford.
"Through these and many other innovative projects over 50,000 Salford residents have benefited directly from the Reds community programmes in the last 12 months.
"The partnership approach with our City Council has been key to ensuring that these principle aims and objectives are not only delivered in the short term, but will also ensure further expansion of our award-winning community work, which is widely regarded as one of the best community programmes in UK sport."
The Reds must submit an application for Super League franchise status to the league's governing body by the end of February. The Reds' current contract expires at the end of the 2011 season.
Showing comments 1 to 12 and replies | View All
alan marshall (22/01/2010 at 01:57)
Higgs Boson, Greater Manchester (22/01/2010 at 08:57)
Alan. Do the council usually ask for your agreement before spending any money? They don't need your permission. Labour voters accross the city gave them permission at the ballot box.
FrostySnowman (22/01/2010 at 09:28)
Councillor Merry says the club "plays an important part in the City's economy", well he isn't wrong , it must be a fine balancing act propping up struggling businesses against the real needs of its citizens. It also raises the question of what happens if the club cannot repay the money , the council are clearly not going the send the bailiffs in. Last weeks game managed to attracted just over 1000, that’s not going to pay the bills.
I'd also be interested where this figure of 50,000 people locally have benefited from the club community schemes comes from. As it's about a quarter of the population I think a high degree of spin has been given to the figure.
Its difficult to see what sort a community use a 15000 stadium is , you don’t need something that big for community facilities. It seems the trend in recent years is build something on the understanding it’s being built for the community whereas the bottom line is the community don't really need it, or anything approaching that size.
jean hardway (23/01/2010 at 00:57)
I have just read this artical, yet again this council use OUR money. We give the BBC orchestra 20 million, we then say we could fund the stadium at a cost of 10/20 million. We hold events that cost the city,proms in park cost £190.000+ The Pink rink £95.000+ Now we are giving loans to Rugby clubs and what for, is it to help move to Barton, is it to pay wages or is it to run community projects.
The residents of Salford can't get proper services.We can't get our roads cleaned, the potholes filled in, We have little or no provishion for our youth. The building schools programme is a joke, we are building JR schools that are too small. Our childrens services are poor.
Yet in their wisdom this Labour run council think its ok to waste money, lend money or just give it away. When will it end.
julian caine (23/01/2010 at 10:26)
GRAHAM ASH, SALFORD (24/01/2010 at 07:40)
samantha fogg (24/01/2010 at 13:31)
alan marshall (24/01/2010 at 23:09)
No i don't expect the council to ask about every penny they spend,as I would hope this benefits all taxpayers.Tell me how this loan to Salford Rugby Club benefits anyone other than those connected to Salford Rugby Club.
I note that now the Ice has gone the roads are left in many cases pot holed, I wonder if the council budget stretches to repairing theses roads,I suspect not! Now for me they can spend money as everyone would benefit...don't you agree?
Steve Evans (25/01/2010 at 11:04)
MarkinIrlam, Irlam (25/01/2010 at 13:58)
If this was a viable project do you not think that the commercial banks would have made the loan.
John Merry! Start looking after day to day business rather than trying to get into the press every day with yet another of these white elephant projects.
Learn to manage the business of local council rather than squandering tax payers money.
Also try and get out of your unholy relationship with Peel, do you honestly think that no one realises whats going on.
Mark
andy waytomakeacomment, Greater Manchester (25/01/2010 at 14:05)
You make excellent and valid points about the possible conflict of interest arising from the multiple roles of Councillor John Merry in his capacity as a Board member of the influential North West Development Agency (NWDA), in addition to his role as the Leader of Salford City Council.
Readers may also be interested to read more about Councillor Merry's numerous roles with other organisations on the NDWA web site:
www.nwda.co.uk/who-we-are/the-board/john-merry.aspx
In July 2009 the MEN Business section published a profile of former Deputy Chairman of Peel Holdings, Robert Hough, on his appointment to the role of Chairman of the Northwest Regional Development Agency.
www.manchestereveningnews.co.uk/news/business/s/1125241_urmston_boy_who_rose_to_the_top
Given these close working relationships, some MEN/Salford Advertiser readers may be keen to observe how the activities of Peel Holdings and Salford City Council develop.
Schwyz (28/01/2010 at 17:35)