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Financial Integrity, Football

Lennoxtown Initiative a financial disaster: Celtic sale only recouped half their clean-up costs

How did the plan in the NHS Greater Glasgow trust proposal for Lennox Castle Hospital pushed by Chief Executive, Tom Divers work out? Did all the millions roll in for the land sales?

From the proposal it says the demolition/clean-up costs for both the upper site, Celtic’s land, and the lower site, NHS/Mactaggart & Mickel’s development, were estimated at £1.9 million. Taking half for each site that’s £950,000 clean-up cost per site. So with Celtic PLC paying £493,000 plus VAT, the NHS got about half of their clean-up costs back plus nothing for the value of the actual land.

The NHS would have been better leaving the buildings untouched and selling the land as-is. If the land sale is not a subsidy then what is? 

The Proposal Costs to be Recouped

According to the proposal, millions were to roll in over and above the recouping of the following costs:

Clean-up costs  £1.9 million

Bridging finance  £1.475 million (Provided by the Scottish Executive for replacement community facilities)

New Health facility  £1 million 

That amounts to  £4.375 million costs to recoup.

And to quote the proposal ‘The balance of receipts will allow the NHS to contribute to the wider socio-economic agenda of a community which has been, for decades, dependant on the hospital for employment and health’. 

And on the Credit side of the Ledger

Only Celtic’s  £493,000 plus VAT which as we have seen above only recouped half of the demolition/clean-up costs on their part of the site.

What about the NHS/Mactaggart & Mickel site? There is a FoI outstanding on that deal but I would not look for a large lump sum payment coming from that deal. Mactaggart & Mickel had land at a Hole Farm and it appear that they may have swapped that for the Lennox Castle lower site.

The NHS Greater Glasgow and Clyde Trust appears to still own the lower site and Mactaggart & Mickel is just the developer which means the capital return comes in dribs & drabs with each house being sold. That is after Mactaggart & Mickel get their money returned also.

It really has to be asked of the UK/Scottish governments why it’s main health provider in Scotland has turned into a property developer. And not a very good one at that.

Lennoxtown Initiative Funding

Originally East Dunbartonshire Council, NHS Greater Glasgow Health Board and Scottish Enterprise Dunbartonshire were the main financial backers of the Initiative with other ‘residual’ funds supposed to pour in from the Lennox Castle land sales. Obviously the ‘residual’ funds have not eventuated or the NHS Trust repaid any of the capital from central government. Scottish Enterprise could see the blackhole that was the Lennoxtown Initiative and bailed out very quickly. That has left the EDC and the NHS funding, for the last couple of years, an organisation whose main purpose appears to be the redirecting of funds to Celtic PLC for their Service Level Agreement.

This whole proposal has been a financial shambles and needs to be wound up as well as being investigated by the Scottish and UK governments. 

 ©footballtaxhavens.wordpress.com 2014 CC-by icon



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