Salford City Council has been criticised for giving a “hidden” loan to a rugby league club.
The town hall paid Swinton Lions £100,000 in March after being made aware that the club was in danger of having “cash flow” problems.
But Salford Conservative Group said it was not told about the payment, and notice of the decision was not made public.
The Local Democracy Reporting Service (LDRS) has been told Swinton Lions has not yet paid back any of the loan, which has accrued nearly £3,000 in interest since March, as well as a penalty of around £3,500 for the lack of payments.
Salford Council say the loan was made in compliance with the authority’s decision-making processes and the relevant legislation.
This week, Salford City Council – which had to plug a £5.9 million blackhole in its last budget – shared its intention to give a second £100,000 loan to the rugby league club, sparking criticism from Conservatives in the council chamber.
Coun Robin Garrido said he has “a number of concerns” about the situation.
He said he is not against supporting Swinton Lions financially after money was previously loaned to Salford Red Devils rugby club by the council, but he raised concerns over a lack of transparency from the town hall around the initial £100k payment in March.
He added:
“We were not notified of the first loan and we should have been in my opinion. Why was it being hidden?
“There was no decision notice. The normal protocol is that there is a decision notice even if technically it is not needed.
“Then we come to the decision notice on Friday. Normally, the chief finance officer and chief officer would have to sign it off but this has not been. It’s been signed off by the City Mayor.
“We have a number of concerns about this. One is that decisions are being made without the knowledge of the official opposition or other members. That’s a concern we need to be looking into.
“Another is, should we have given Swinton Lions the second £100,000? I can’t see how we can agree to anything of that kind until we have some firm guarantees that the previous money is going to be repaid.”
Salford Conservatives could ‘call in’ the council’s second £100,000 loan to the club, meaning it would face further scrutiny before being agreed.
Stephen Wild, CEO at Swinton Lions, said the loans are “vital” to helping the club become self-sufficient.
He told the LDRS:
“We were fully aware back in 2021/2022, whilst in the process of constructing and delivering a post-Covid recovery plan, coupled alongside a sudden drop of over £150,000 in annual central funding from our sport’s governing body, that we would experience cash flow issues over the following couple of years.
“We discussed these matters with Salford City Council who extended the club an initial loan of £100,000. I emphasise that this was a commercial loan repayable with interest, and was underwritten by personal director guarantees.
“A further loan of a similar amount with guarantees has subsequently been discussed, as well as a revised repayment plan which would cover both tranches.
“No monies have been gifted to Swinton Lions RLFC. However, these loans are vital to facilitate ongoing internal restructuring and economies which will enable the club to become self-sufficient, whilst also indirectly supporting the wonderful work of our Lions’ Foundation, which earns significant socio economic benefits for the town of Swinton itself, but also for the wider city of Salford.
“We are extremely grateful to Salford City Council for their understanding of our situation, and recognition that as one of the world’s oldest rugby league clubs the Lions are an important local historic institution.
“There is also recognition here for our Foundation which in a short space of time has engaged 30,000 people and created an estimated £2 million worth of social benefit to the city.”
A spokesperson from Salford City Council said:
“The council rightly recognises Swinton Lions RLFC, their foundation arm, all they do for local people and our city.
“The club is nearing the end of the current season, so the loan will help to financially support them while new options are considered. This financial provision was made in compliance with the council’s decision-making processes and the relevant legislation.
“Swinton Lions were formed in 1871 and the club is an important institution in our city, helping to promote health and wellbeing. They also work with local schools to encourage young people to stay healthy and active and help to achieve their full potential. On top of this the club employs local people and has contracts that supports jobs more widely.
“In Salford we are also building a Rugby Strategy, to support grassroots rugby and maximise the economic and cultural value that rugby brings to our city. We want to see rugby league in all schools in our city and embed the legacy of the game for future generations of Salfordians to enjoy.”
Salford City Council has also given loans to Salford Red Devils rugby club recently.
In March, it gave the club £315,000 in ‘immediate’ financial support after the club asked for help to secure its long-term future.
Coun Garrido has previously raised concerns about payments to Salford Red Devils, as well as the council’s plan to buy Salford Community Stadium, where the Salford Red Devils and Sale Sharks play.
