We revealed last month that the authority had agreed under emergency powers to give the town centre law firm a grant of £300,000 to help redevelop its new Churchgate offices.
Since we published that story we have asked council chiefs for specific information regarding the details, timing and decision-making process behind the grant agreement.
But apart from leader Cliff Morris’ announcement that an independent audit of the decision is under way, our questions had remained unanswered.
Reaction in the town has been so strong that the leader of the council has face repeated calls to resign and there have been demonstrations outside the town hall. Cllr Morris has always maintained he has done nothing wrong.
Today we finally have the answers after a full briefing and interview with council leader Cliff Morris and, Cllr Ebrahim Adia, primarily executive cabinet member for Development and Regeneration, whose portfolio covers this decision.
And Cllr Morris admitted that there were lessons to be learned on how they deal with such issues and to perhaps offer answers sooner.
Cllr Adia was keen to place the Asons grant decision within the wider context of the increasing financial challenges the authority is facing and the different way leaders are looking at boosting the coffers, specifically related to businesses in the town.
He said: “Since 2010 local government has had to take significant reductions in funding and as a northern metropolitan council we have had to take a disproportionate amount.
“The reality is that over the course of this decade the council has had to find cuts to the tune of £190 million, while our requirement to deliver services have not gone away and we have to look after some very vulnerable residents.”
He added: “The second part is that local authorities up and down the country award grants to businesses, there is nothing exceptional about what we do and it is part of our declared strategy that we will and have done historically, support businesses and paying jobs in the town.
“We do that in a number of ways, we will do it sometimes to help a business stay in the town and keep jobs here, on other occasions we will help companies because the business plan suggests that if we give them a bit of support they will grow and create more jobs.
“And we are also look very carefully about businesses that may be going through a bit of a difficult period and challenging circumstances and instead of a non-interventionist approach, we take the view that even when a business is struggling we will try and help.”
Cllr Adia said the approach of helping businesses in Bolton has become even more important after changes announced this year related to how the Government funds local councils.
He said: “What has changed in the last year is that the government has effectively indicated that our grant by 2020 will be minimal, at its high point a couple of years ago it was about £120 million and the projections show it could be as low as £15 million by 2020.
“In place of revenue support grant, the government has indicated that local authorities will be able to retain 100 per cent of their business rates, at the moment we retain 50 per cent.
“So the reality we are working in now is that we have to become self-sustaining and we have to be able to get to a position by 2020, where we can stand on our own two feet and rely on our ability to generate either income, council tax base or grow our business rates and the town centre strategy has to be seen in that context.”
He added: “The Asons decision, like a lot of decisions that the leader or other executive members have taken over the last year or longer is within that context.
“It is also worth pointing out that while that £300,000 could have been spent on other things, like a one off highways scheme, while would have been good for the people of Bolton, once that money is gone it is gone.
“What we get through an arrangement like this — because we are hoping we will get £90,000 a year in business rates from Asons — is a regular income on the back of that investment that helps to support services — that is the very logical and rational thinking here.”
He went on to describe the process of the grant procedure, the reason why emergency powers were used in this case and the terms of the grant.
Cllr Adia explained: “Asons approached (former director of development and regeneration) Keith Davies early this year to say that their lease at Bark Street had come to an end and they needed to relocate, for whatever reason.
“Their conversation at that time was that two other local authorities were offering them pretty good rates.”
Cllr Adia said that the initial assessment by the council was that it should, if possible, try to find a way of keeping the company — and its business rates — in Bolton.
He added: “The discussions with officers were that the local authority would be prepared to support Asons to help them remain here, however, that would be subject to an assessment against state aid rules, so that would take a bit of time and couldn’t happen immediately, it is a rigorous process.”
On the back of the informal agreement, Asons decided to remain in Bolton and began the process of moving into Newspaper House and refurbishing it.
What the council is clear about is that those refurbishments took place speculatively, ahead of the grant being approved and said Asons were well aware that if the state aid process failed, the firm would have to pay up for the all the refurbishments.
It has also been confirmed that the grant amount of £300,000, owing to state aid legislation, was arrived at as a percentage of how much Asons was specifically spending on the infrastructure of the town centre building.
The firm agreed a minimum spend of £1.8 million which allowed them the £300,000 council grant.
Cllr Adia added: ““So the informal indication was given earlier in the year and we were delighted that they wanted to remain in Bolton to keep those jobs in the town centre and the business rates, it was absolutely consistent with our town centre strategy.
“However it was made absolutely clear to them that when they started working on the building and getting it up to scratch — because they were under pressure to move from Bark Street — they were doing it at their own risk. We could not absolutely guarantee that they would get the funds because we were still doing the appraisal of getting state aid and they understood that.”
So why did it need to be done under emergency powers? According to the council’s constitution this process can only be used for ‘urgent’ cases.
Cllr Adia added: “This was partly because the officer needed permission to start the state aid process and we know that takes several months, so without that agreement the officer would not have had permission to start that process and it is a slow process as it is.”
He said it was also to give Asons a ‘degree of comfort’ that the informal agreement with officers had political backing.
State aid regulations say that any agreement must be ratified by the European Union, which can cause delays.
The council said that while the official letter confirming the grant was produced on September 20, the EU clearance did not arrive until early October.
Cllr Adia said: “That clearance didn’t arrive in time for the leader’s October executive meeting, because the agenda must be produced five clear days before any meeting — so it went to the November meeting which is when (Tory leader) Cllr David Greenhalgh first raised an issue.”
He added: “The actual grant was released and given to Asons on October 20 after the state aid decision was agreed in Europe.”
Among the many theories regarding the specific £300,000 amount awarded to Asons were ideas relating to the firm’s former plans to launch a new headquarters on land at Clarence Street which it bought from the council.
When restrictions were placed on the personal injury sector Asons had to shelve those plans and sell the land back to the authority.
Council chiefs have now guaranteed that the Clarence Street land was sold at a ‘market rate’ price and was bought back by the council for the same amount.
It has also been stated that the reason car dealership group RRG has paid more for the land — which it acquired last month — was because of the difference in market rate prices specifically for car dealership ventures, which is higher.
On Clarence Street, a council spokesman added: “When the Clarence Street land was sold to Asons there were clauses put in the contract — like we always do — to prevent land banking, meaning work must start before a certain point.
“So either way the council would have clawed that land back, because those conditions would not have been met.”
Another rumour rebuffed by the leadership is that the £300,000 had anything to do with a reported HMRC tax bill that the company may have been facing and council leader Cliff Morris also went on record to state that there was no one within the council who had links to Asons who may have been involved in brokering any deal.
There have been suggestions that the cash could have been used more wisely for example, to help keep school crossing patrols in operation — a service facing the axe in the forthcoming budget.
Cllr Adia explained: “We set aside several million pounds in our 2013 budget specifically for the town centre. Within that there’s about 1.5 million for the refurbishment of offices, so we anticipated that support may be required. So we’ve got the money, it’s there for a specific purpose and then a business comes and asks for support, it is just normal business for the council, it is day to day operations and it would not make sense to not make that decision.”
Cllr Morris admitted that the personal attacks on him in the wake of the revelations have made an impact on him.
He said: “Today we are just trying to put it in context that this isn’t something different than what we normally do, it is council business.
“But there are lessons to be learned on how we report it, how we give out information and perhaps in coming forward with answers sooner.”
He said there will also be a new system set up relating to ensuring that the major opposition leader is notified of such decisions — as there was potentially a mix up in this case.
Regarding the reaction, he added: “I have been surprised, particularly by one or two senior members of the opposition because I would have thought that they understood business.
“I am the leader and I do understand that the buck stops with me and I have to take the hits.
“But it can be difficult when reporters come to your home and when people are saying horrible things on the internet which your children are reading.
“But what really shored me up was when my entire Labour group stood behind me 100 per cent.
“In terms of my position, if I was considering it, I am certainly not considering it now, because as we have shown we have done nothing wrong.
“My group are solid behind me and I must be solid behind them.”
ASONS: THE TIMELINE
DECEMBER 2015 - Asons scraps plans to develop Clarence Street site after changes to personal injury law sector
START OF 2016 - Asons bosses approach Bolton Council for support in moving to new Bolton premises
Council agrees in principle to help
JUNE 2016 - Council retains ownership of Clarence Street site from Asons using emergency powers
JUNE 2016 - Asons confirms it will be purchasing and moving into the Newspaper House building in Churchgate, refurbishment work begins
AUGUST 2016 - Company officially opens new Newspaper House offices
SEPTEMBER 2016 - Confirmation letter of grant published by council, but still awaiting European agreement
OCTOBER 2016 - European Union agrees to the state aid funding agreement
OCTOBER 20 2016 - Grant is full ratified and given to Asons
NOVEMBER 7 2016 - Grant is finally confirmed and signed off by the leader of the council at executive meeting and The Bolton News becomes aware of the grant