MPs keep up heat on airport cash deal

Nov 20 2008 by William Green, The Journal

A SECRET deal involving millions of pounds of public money between Newcastle Airport and its ex-bosses could come under fresh investigation after a Government minister intervened.

A High Court case was due last month in which the airport was claiming £8.5m from former boss John Parkin and the estate of former finance director Lars Friis, who died in 2006.

But a row erupted after the parties reached a confidential out-of-court settlement over the bonus payments to the ex-directors after they re-mortgaged the airport in 2006 in a £163m deal.

Some £83m was shared among the five Tyne and Wear councils and Durham and Northumberland county councils that collectively own 51% of the airport. The rest went to the other shareholders at Copenhagen Airport.

But Hexham MP Peter Atkinson said he would refer the situation to the Audit Commission after Local Government Minister John Healey responded to his calls for an inquiry.

In a written Parliamentary response to Mr Atkinson, Mr Healey said: “Any concerns that a local authority has not achieved best value should be addressed to the auditor in the first instance.”

The Tory MP said: “There is a lot of money involved here. We need to find out more details to make sure that taxpayers in the North East have not been short-changed.”

He added it was unclear what happened to some of the money involved in the refinancing of the airport and how local councils agreed to bonus payments to the former executives in the first place.

Newcastle Central MP Jim Cousins, who has also raised concerns about the deal, said: “I am considering what steps to take next because there are issues not only for the district auditor but also the company itself and its auditors.”