Charity Commission looks into Palace lease

8:30am Friday 4th July 2008

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Allegations that Haringey Council wasted taxpayers' money on the short-term lease of Alexandra Palace are being investigated.

The Charity Commission is looking into complaints over a temporary contract for the running of the palace which left Haringey Council with debts of more than £3 million.

In May 2007 the board of palace trustees, made up of Haringey councillors, agreed to issue Firoka Ltd with a temporary lease allowing the private company to trade in the landmark building.

Under the terms of the contract the council was still required to pay the running costs, such as routine maintenance, while the leisure company retained any profits raised from events.

But critics accused trustees of spending £3.1m of council taxpayers' money improperly because of the terms of the lease.

A Charity Commission spokesman said: "Concerns have been raised with us regarding the charity's decision to issue a short-term licence for occupation to Firoka.

"We are currently considering these concerns to determine the appropriate way forward in this matter."

The commission first received a complaint in March and, after an initial assessment, it opened a case in April, which is ongoing.

The Palace lease was supposed to end in August last year when it was expected a more permanent sale covering a 125-year period would be agreed.

This fell through after a High Court judge ruled the sale was unlawful because of a flawed public consultation.

It was not until January 2008 that the organisation was ordered to leave the building after its bosses refused to give written confirmation that they were still interested in signing a permanent lease.

Councillor Jonathan Bloch, Liberal Democrat member of the general purposes committee, said: "Council taxpayers have a right to know what happened to their money.

"There now needs to be a thorough investigation into whether £3m of taxpayers' money and charity funds were used correctly."

However, Palace trustees are adamant the Charity Commission case is not an investigation.

Councillor Matt Cooke, said: "We have spoken to the Commission today and can categorically say that there is no ongoing enquiry into Alexandra Palace and there are no proposals to instigate an enquiry in the future.

"In December, issues were raised about the terms of the licence to Firoka which were answered."

He said that any financial support provided by the council is done in a completely transparent manner.

He added: "Our trust's accounts, debated in public, clearly show the financial information, as do the accounts of the local authority."

Haringey Council pays on average £1.5 million to make up the shortfall of Alexandra Palace's accounts.