For those interested - re: the Newham £44.4m 'write off' of it's 'investment' in the conversion of the stadium for West Ham below is a statement from Newham Mayor Robin Wales (sent to all Newham Labour Party members):
"In 2012, Newham Council invested £40m into the stadium, to be repaid when it makes a profit. We did this to ensure that, rather than being an expensive white elephant as was originally proposed (and has happened in pretty much every other Olympic city), the stadium had a future as a multi-purposed venue that directly benefited the people of Newham. Through out investment we secured benefits including 100,000 West Ham United tickets for Newham residents each season, first opportunity for Newham residents for jobs at the stadium, and access to the stadium for community events such as the Great Newham Run.
As the stadium is not yet making profit, we need to make allowances for this in the Council’s accounts; this is done through an accounting process called an impairment. This is not the same as writing off the loan, and to suggest otherwise is simply untrue. We have been actively pursuing these issues with the Mayor of London and the GLA for some time to ensure that the stadium’s future is secure and to protect Newham’s investment, and these discussions will continue. I am confident that Sadiq and I will be in a position to announce progress on this in due course.
I would, of course, be very happy to discuss this issue – or any other aspect of the Council’s work – with Labour Party members directly, at branch meetings or at our forthcoming manifesto meetings. However, I am not prepared to have baseless accusations sent around anonymously using stolen data that are damaging both to Newham and to Labour’s campaign for the 2018 election.
In unity,
Sir Robin Wales Labour Mayor of Newham"
So Wales claims that the £44.4m 'impairment' in the accounts "is not the same as writing off the loan, and to suggest otherwise is simply untrue".
What Newham's draft accounts actually say on this is:
"Impairment totalling £44.4m of a Long Term Debtor in one of the Council’s group undertaking, Newham Legacy Investments Ltd.
These charges are subsequently written-off to the Capital Adjustment Account (Note 26) through the Movement in Reserves Statement (Page 26), ensuring neutral impacts on the General Fund and Housing Revenue Account balances in accordance with statutory accounting regulations. £4.4m of the debtor impairment has been charged to revenue, with the effect on the general fund being offset by a transfer from earmarked reserves". (Page 12 item 7 Newham Draft Statement of Accounts 2016/17 - link below).
I'm not an accountant so I'd be grateful that if anyone is they can explain how an "Impairment totalling £44.4m" (the full amount of the original investment) can be anything else than a 'write off' in full of the council's investment in the stadium (with, it seems, £4.4m to be charged to the council's revenue account and the rest transferred from reserves)?
For those interested - re: the Newham £44.4m 'write off' of it's 'investment' in the conversion of the stadium for West Ham below is a statement from Newham Mayor Robin Wales (sent to all Newham Labour Party members):
"In 2012, Newham Council invested £40m into the stadium, to be repaid when it makes a profit. We did this to ensure that, rather than being an expensive white elephant as was originally proposed (and has happened in pretty much every other Olympic city), the stadium had a future as a multi-purposed venue that directly benefited the people of Newham. Through out investment we secured benefits including 100,000 West Ham United tickets for Newham residents each season, first opportunity for Newham residents for jobs at the stadium, and access to the stadium for community events such as the Great Newham Run.
As the stadium is not yet making profit, we need to make allowances for this in the Council’s accounts; this is done through an accounting process called an impairment. This is not the same as writing off the loan, and to suggest otherwise is simply untrue. We have been actively pursuing these issues with the Mayor of London and the GLA for some time to ensure that the stadium’s future is secure and to protect Newham’s investment, and these discussions will continue. I am confident that Sadiq and I will be in a position to announce progress on this in due course.
I would, of course, be very happy to discuss this issue – or any other aspect of the Council’s work – with Labour Party members directly, at branch meetings or at our forthcoming manifesto meetings. However, I am not prepared to have baseless accusations sent around anonymously using stolen data that are damaging both to Newham and to Labour’s campaign for the 2018 election.
In unity,
Sir Robin Wales Labour Mayor of Newham"
So Wales claims that the £44.4m 'impairment' in the accounts "is not the same as writing off the loan, and to suggest otherwise is simply untrue".
What Newham's draft accounts actually say on this is:
"Impairment totalling £44.4m of a Long Term Debtor in one of the Council’s group undertaking, Newham Legacy Investments Ltd.
These charges are subsequently written-off to the Capital Adjustment Account (Note 26) through the Movement in Reserves Statement (Page 26), ensuring neutral impacts on the General Fund and Housing Revenue Account balances in accordance with statutory accounting regulations. £4.4m of the debtor impairment has been charged to revenue, with the effect on the general fund being offset by a transfer from earmarked reserves". (Page 12 item 7 Newham Draft Statement of Accounts 2016/17 - link below).
I'm not an accountant so I'd be grateful that if anyone is they can explain how an "Impairment totalling £44.4m" (the full amount of the original investment) can be anything else than a 'write off' in full of the council's investment in the stadium (with, it seems, £4.4m to be charged to the council's revenue account and the rest transferred from reserves)?
The above explains impairment. In the light of the comments of Sir Robin Wales I've extracted this:
....."Impairment only occurs when the amount is not recoverable. This happens when the carrying amount exceeds the sum of the undiscounted cash flows expected to result from the use of the asset over its remaining useful life and the final disposition of the asset. The bulk of these cash flows are usually derived from subsequent use of the asset, since the disposition price may be low."....
For those interested - re: the Newham £44.4m 'write off' of it's 'investment' in the conversion of the stadium for West Ham below is a statement from Newham Mayor Robin Wales (sent to all Newham Labour Party members):
"In 2012, Newham Council invested £40m into the stadium, to be repaid when it makes a profit. We did this to ensure that, rather than being an expensive white elephant as was originally proposed (and has happened in pretty much every other Olympic city), the stadium had a future as a multi-purposed venue that directly benefited the people of Newham. Through out investment we secured benefits including 100,000 West Ham United tickets for Newham residents each season, first opportunity for Newham residents for jobs at the stadium, and access to the stadium for community events such as the Great Newham Run.
As the stadium is not yet making profit, we need to make allowances for this in the Council’s accounts; this is done through an accounting process called an impairment. This is not the same as writing off the loan, and to suggest otherwise is simply untrue. We have been actively pursuing these issues with the Mayor of London and the GLA for some time to ensure that the stadium’s future is secure and to protect Newham’s investment, and these discussions will continue. I am confident that Sadiq and I will be in a position to announce progress on this in due course.
I would, of course, be very happy to discuss this issue – or any other aspect of the Council’s work – with Labour Party members directly, at branch meetings or at our forthcoming manifesto meetings. However, I am not prepared to have baseless accusations sent around anonymously using stolen data that are damaging both to Newham and to Labour’s campaign for the 2018 election.
In unity,
Sir Robin Wales Labour Mayor of Newham"
So Wales claims that the £44.4m 'impairment' in the accounts "is not the same as writing off the loan, and to suggest otherwise is simply untrue".
What Newham's draft accounts actually say on this is:
"Impairment totalling £44.4m of a Long Term Debtor in one of the Council’s group undertaking, Newham Legacy Investments Ltd.
These charges are subsequently written-off to the Capital Adjustment Account (Note 26) through the Movement in Reserves Statement (Page 26), ensuring neutral impacts on the General Fund and Housing Revenue Account balances in accordance with statutory accounting regulations. £4.4m of the debtor impairment has been charged to revenue, with the effect on the general fund being offset by a transfer from earmarked reserves". (Page 12 item 7 Newham Draft Statement of Accounts 2016/17 - link below).
I'm not an accountant so I'd be grateful that if anyone is they can explain how an "Impairment totalling £44.4m" (the full amount of the original investment) can be anything else than a 'write off' in full of the council's investment in the stadium (with, it seems, £4.4m to be charged to the council's revenue account and the rest transferred from reserves)?
Emperor's new clothes - however he wishes to dress it up, if it's £44.4 million that's been wisely invested as an impairment then it's £44.4 million that could have been invested elsewhere
Good tips there, thanks, will pass it on to the team. Probably don't need to pass it on to Khan's team, as they are forensic accountants, and presumably all over it.
TBF, any 'investment' in the Olympic stadium was never going to be repaid in cash, the pay back was in other ways. The issue has been the deal that West Ham got after the Olympic's were over. I would have thought what Newham's residents should be asking is not so much about how and why this has been 'not-written off' as to how if there is future non-incoming cash flow to be booked from the deal how it is going to impact services etc in the borough.
If Southwark council gave Dulwich Hamlet £40 million of free money Champion Hill could be wonderfully transformed. If the taxpayers then weighed in with a further £300 million then Dulwich Hamlet could win the Champions League in a decade or so. West Ham have gone from being a decent club to a kind of freak show over all this and there must be thousands of decent West Ham fans who are hating it...you really can't fool all of the people all of the time.
Nah, he was off to Bucharest, apparently. Wonder who flies him around (at our expense).
Afterwards my wife and I had a laugh about my little fantasy that there was a flash of recognition in his eyes, and that he was thinking "Hang on, I know that bloke. But what is he doing here? Cripes he's stalking me around the world"
Yes, Boris, we are on your case and we are going to take you down
I'd remind you @PragueAddick, unbelievable as it is, but that moron is in charge of MI6. I'd be watching my back for poisoned tipped umbrellas and exploding cigars if I were you...
"The investment that’s gone in by the owners of the stadium on behalf of football West Ham has had a great benefit for us as the summer tenant. We’ve got a 50-year deal and all we have to do is pay the cost of the stewarding."
Interviewer - Mr Warner, where did the owners who are investing £m and pay tenants to use their stadium instead of charging a rent get their money from?
Mr Warner - The taxpayer
Interviewer - What happened to the money that UK Athletics made from the
For those interested - re: the Newham £44.4m 'write off' of it's 'investment' in the conversion of the stadium for West Ham below is a statement from Newham Mayor Robin Wales (sent to all Newham Labour Party members):
"In 2012, Newham Council invested £40m into the stadium, to be repaid when it makes a profit. We did this to ensure that, rather than being an expensive white elephant as was originally proposed (and has happened in pretty much every other Olympic city), the stadium had a future as a multi-purposed venue that directly benefited the people of Newham. Through out investment we secured benefits including 100,000 West Ham United tickets for Newham residents each season, first opportunity for Newham residents for jobs at the stadium, and access to the stadium for community events such as the Great Newham Run.
As the stadium is not yet making profit, we need to make allowances for this in the Council’s accounts; this is done through an accounting process called an impairment. This is not the same as writing off the loan, and to suggest otherwise is simply untrue. We have been actively pursuing these issues with the Mayor of London and the GLA for some time to ensure that the stadium’s future is secure and to protect Newham’s investment, and these discussions will continue. I am confident that Sadiq and I will be in a position to announce progress on this in due course.
I would, of course, be very happy to discuss this issue – or any other aspect of the Council’s work – with Labour Party members directly, at branch meetings or at our forthcoming manifesto meetings. However, I am not prepared to have baseless accusations sent around anonymously using stolen data that are damaging both to Newham and to Labour’s campaign for the 2018 election.
In unity,
Sir Robin Wales Labour Mayor of Newham"
So Wales claims that the £44.4m 'impairment' in the accounts "is not the same as writing off the loan, and to suggest otherwise is simply untrue".
What Newham's draft accounts actually say on this is:
"Impairment totalling £44.4m of a Long Term Debtor in one of the Council’s group undertaking, Newham Legacy Investments Ltd.
These charges are subsequently written-off to the Capital Adjustment Account (Note 26) through the Movement in Reserves Statement (Page 26), ensuring neutral impacts on the General Fund and Housing Revenue Account balances in accordance with statutory accounting regulations. £4.4m of the debtor impairment has been charged to revenue, with the effect on the general fund being offset by a transfer from earmarked reserves". (Page 12 item 7 Newham Draft Statement of Accounts 2016/17 - link below).
I'm not an accountant so I'd be grateful that if anyone is they can explain how an "Impairment totalling £44.4m" (the full amount of the original investment) can be anything else than a 'write off' in full of the council's investment in the stadium (with, it seems, £4.4m to be charged to the council's revenue account and the rest transferred from reserves)?
Sorry @PragueAddick wasn't ignoring you, didn't have my hearing aid in.
Not an accountant but an impairment in accounting terms means the asset is viewed as being permanently reduced in value. Normally in a business the hit would be taken by knocking it off your revenue account, just as if it was sold for a profit it would be taken as an increase in revenue. But because this would mean the council tax would have to make good the loss, the law requires the Council to knock it off reserves so that it is accounted for as capital expenditure met from central funding not local rate payers. It's accounting argy bargy to protect the numbers on which council tax has to calculated.
Doesn't change the fact that it's written off. Sir Robin is I suppose suggesting that the assets is still owned and could come good, and only the book "value" is written off, but currently Sir, it means it's worthless.
I notice that the annual Saracens/Harlequins game which often gets played at Wembley or Twickenham, will be played at the Olympic stadium in March 2018 (during an international break I think). The first time the stadium has held an event during the football season?
I notice that the annual Saracens/Harlequins game which often gets played at Wembley or Twickenham, will be played at the Olympic stadium in March 2018 (during an international break I think). The first time the stadium has held an event during the football season?
Good spot, and I am sure you are right. As we showed, any other event needs to find a clear three day window, as the contract stipulates a one day handover either side of the event day. When there are so many midweek games, and games moved by Sky at short notice, an international break period is the only feasible option. Not what the Mayor at the time promised, which is why no one should believe his promises about Brexit or anything else.
A little piece coming up on BBC London (BBC 1) @ 6:30. Apparently West Ham have been getting away without paying business rates. Who would have thought that.
Comments
Brings the national lottery into disrepute.
"In 2012, Newham Council invested £40m into the stadium, to be repaid when it makes a profit. We did this to ensure that, rather than being an expensive white elephant as was originally proposed (and has happened in pretty much every other Olympic city), the stadium had a future as a multi-purposed venue that directly benefited the people of Newham. Through out investment we secured benefits including 100,000 West Ham United tickets for Newham residents each season, first opportunity for Newham residents for jobs at the stadium, and access to the stadium for community events such as the Great Newham Run.
As the stadium is not yet making profit, we need to make allowances for this in the Council’s accounts; this is done through an accounting process called an impairment. This is not the same as writing off the loan, and to suggest otherwise is simply untrue. We have been actively pursuing these issues with the Mayor of London and the GLA for some time to ensure that the stadium’s future is secure and to protect Newham’s investment, and these discussions will continue. I am confident that Sadiq and I will be in a position to announce progress on this in due course.
I would, of course, be very happy to discuss this issue – or any other aspect of the Council’s work – with Labour Party members directly, at branch meetings or at our forthcoming manifesto meetings. However, I am not prepared to have baseless accusations sent around anonymously using stolen data that are damaging both to Newham and to Labour’s campaign for the 2018 election.
In unity,
Sir Robin Wales
Labour Mayor of Newham"
So Wales claims that the £44.4m 'impairment' in the accounts "is not the same as writing off the loan, and to suggest otherwise is simply untrue".
What Newham's draft accounts actually say on this is:
"Impairment totalling £44.4m of a Long Term Debtor in one of the Council’s group undertaking, Newham Legacy Investments Ltd.
These charges are subsequently written-off to the Capital Adjustment Account (Note 26) through the Movement in Reserves Statement (Page 26), ensuring neutral impacts on the General Fund and Housing Revenue Account balances in accordance with statutory accounting regulations. £4.4m of the debtor impairment has been charged to revenue, with the effect on the general fund being offset by a transfer from earmarked reserves". (Page 12 item 7 Newham Draft Statement of Accounts 2016/17 - link below).
https://www.newham.gov.uk/Documents/Council and Democracy/DraftStatementOfAccounts2016-17.pdf
I'm not an accountant so I'd be grateful that if anyone is they can explain how an "Impairment totalling £44.4m" (the full amount of the original investment) can be anything else than a 'write off' in full of the council's investment in the stadium (with, it seems, £4.4m to be charged to the council's revenue account and the rest transferred from reserves)?
The above explains impairment. In the light of the comments of Sir Robin Wales I've extracted this:
....."Impairment only occurs when the amount is not recoverable. This happens when the carrying amount exceeds the sum of the undiscounted cash flows expected to result from the use of the asset over its remaining useful life and the final disposition of the asset. The bulk of these cash flows are usually derived from subsequent use of the asset, since the disposition price may be low."....
I wonder what percentage of Newham's reserves, the other £40m was.
Gerrymandering at its finest.
And Newham get 5,623 free tickets for every game
West Ham have gone from being a decent club to a kind of freak show over all this and there must be thousands of decent West Ham fans who are hating it...you really can't fool all of the people all of the time.
So was the Olympic Stadium Coalition
Afterwards my wife and I had a laugh about my little fantasy that there was a flash of recognition in his eyes, and that he was thinking "Hang on, I know that bloke. But what is he doing here? Cripes he's stalking me around the world"
Yes, Boris, we are on your case and we are going to take you down
https://www.thesun.co.uk/tvandshowbiz/4545975/the-apprentice-star-karren-brady-insists-the-bbc-boss-tony-hall-must-act-urgently-on-equal-pay-for-female-stars/
footballWest Ham has had a great benefit for us as the summer tenant. We’ve got a 50-year deal and all we have to do is pay the cost of the stewarding."Interviewer - Mr Warner, where did the owners who are investing £m and pay tenants to use their stadium instead of charging a rent get their money from?
Mr Warner - The taxpayer
Interviewer - What happened to the money that UK Athletics made from the Sorry @PragueAddick wasn't ignoring you, didn't have my hearing aid in.
Not an accountant but an impairment in accounting terms means the asset is viewed as being permanently reduced in value. Normally in a business the hit would be taken by knocking it off your revenue account, just as if it was sold for a profit it would be taken as an increase in revenue. But because this would mean the council tax would have to make good the loss, the law requires the Council to knock it off reserves so that it is accounted for as capital expenditure met from central funding not local rate payers. It's accounting argy bargy to protect the numbers on which council tax has to calculated.
Doesn't change the fact that it's written off. Sir Robin is I suppose suggesting that the assets is still owned and could come good, and only the book "value" is written off, but currently Sir, it means it's worthless.
The first time the stadium has held an event during the football season?
Apparently West Ham have been getting away without paying business rates. Who would have thought that.