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Newham Council may not claw back the loan it have for the conversion of the Olympic Stadium that allowed West Ham to move in
BAD DEBT

Newham Council may NEVER get back £40million loan handed out to help West Ham move to the London Stadium

NEWHAM COUNCIL fear the £40million loan to help West Ham move to the London Stadium may never be repaid.

The local council made funds available to help rebuilding work turning the Olympic Stadium into an arena able to stage Premier League matches.

 Newham Council may not claw back the loan it have for the conversion of the Olympic Stadium that allowed West Ham to move in
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Newham Council may not claw back the loan it have for the conversion of the Olympic Stadium that allowed West Ham to move inCredit: Rex Features
 The Hammers moved into the London Stadium at the beginning of last season
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The Hammers moved into the London Stadium at the beginning of last seasonCredit: Rex Features

But the East London borough now class the loan as "damaged" and admit there is a chance they will not see the money again.

The stadium failed to provide the income anticipated in its first year in operation, which also saw West Ham move in as tenants under a 99-year lease.

And unless there is better use of the 60,000 capacity arena in the future it is unlikely to bring in the money needed to pay off the loan.

The £40m payment was made by the council in 2012 through the Newham Legacy Investments Ltd it set up to work in conjunction with the London Legacy Development Corporation developing the stadium.

The LLDC and NLI invested a total of £257m on refurbishment costs, with the Hammers stumping up £15m to contribute to the conversion work.

But the poor financial performance of the London Stadium last year means the NLI now owes a total of £44.4m after it declared a loss of £41.6m for the year 2015-16.

Until the NLI is in profit, the loan cannot be repaid and there are now fears the money won't be seen again as Newham Council faces more cost cutting to cope with austerity.

Though the World Athletics Championships were staged there over the summer, that is not close to being enough to start bringing in the money needed.

There is a feeling the arena will need to be used to stage a series of music concerts to really make money - but under the agreement with West Ham the club have the final say over events that may impair their ability to play football matches.

 The London Stadium played host to the World Athletics Championships last summer
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The London Stadium played host to the World Athletics Championships last summerCredit: Getty Images

Labour councillor Rokhsana Fiaz said: "It's alarming for residents to read about a £44.4million impairment relating to a loan Newham council has given to refurbish West Ham's stadium via a company it owns.

"I have asked for urgent clarification and details including any further financial implications facing Newham Council.

"Residents need assurances that their money hasn't been wasted and that the financial benefits promised from this much-heralded council investment continue to flow."

 Though athletics was staged in the arena over the summer it needs to start hosting music events
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Though athletics was staged in the arena over the summer it needs to start hosting music eventsCredit: EPA

A spokesperson for Newham said: "The loan is shown, for accounting purposes, as currently 'impaired', or damaged, due to the current financial performance of the stadium.

"It is not a write-off of the loan. It was widely anticipated that the first full year of trading would be particularly challenging.

"Newham council is working with the Greater London Authority, the London Legacy Development Corporation and our other stadium partners on a range of options to improve the financial performance of the stadium.

"The future value of our loan, and its treatment in our accounts, is directly linked to that future performance."


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