Carmarthenshire County Council approves restructure of Scarlets loan

Carmarthenshire County Council has approved plans to restructure the current outstanding loan owed by Scarlets Regional Ltd. The proposal was presented to councillors at a meeting of the County Council today, Wednesday, 11 September 2024.

Under the new agreement, the loan will be converted to a repayment loan and the term of the loan, which is currently valued at £2.616m, will be extended for 15 years (from 1 April 2023) and repaid on an equal instalments basis, with the value being £218,000 per annum. Payments will be deferred for 3 years and commence in 2026.

Interest on the loan will continue to be chargeable throughout the loan period and will be set at a rate of 2.2% above bank base rate, which covers the cost of the borrowing to the County Council.

Cabinet Member for Resources – Cllr Alun Lenny said:

“We are pleased to be able to extend our support for the Scarlets during this most difficult time for regional rugby in Wales. The club’s activity makes a significant economic contribution to Carmarthenshire, so its sustainability is essential. Calling in the loan now might endanger the club’s future, which would impact on about 160 full-time and almost 250 part-time jobs. 

“In addition to this, some 87 local companies supply goods and services to the Scarlets, and the benefit to young people in our schools and colleges who come through the academy system is immeasurable. The club also delivers skill sessions and other sporting opportunities to over 20,000 pupils in our schools – including events for children with disabilities, and camps in socially deprived areas. Working alongside Llanelli Town Council, the Scarlets also deliver sessions for ethnic communities, at a time when others are trying to stir up racial tensions.  

“The Scarlets is a huge part of the sporting, social and economic fabric of Carmarthenshire, the club has a strong regional identity and is home to an iconic international rugby brand. Its stadium, Parc Y Scarlets,  is also a catalyst for a considerable level of economic and social activity.  

“Let me be perfectly clear, this loan has not cost the council taxpayers of Carmarthenshire a single penny. The interest paid by the Scarlets has been a fair one for this authority, that has covered the Council’s cost. 

“Some people have asked why the County Council should use public money to bail out a sports club. I would emphasise that the original £2.4m loan was made nearly 17 years ago. It’s not new money, nor is it money the Council is likely to get back if we called the loan in. It’s not money that’s available to us towards other things, such as filling potholes or building a new school, which would cost many, many times more. 

“Although the initial loan, agreed by County Council in 2007, has matured and the County Council has recuperated interest throughout the period on money lent, we are committed to supporting the Scarlets and elite rugby here in Carmarthenshire at no cost to council taxpayers.”