A SECRET deal involving millions of pounds of public money was last night agreed between Newcastle Airport bosses and their former chief executive.
MPs and unions reacted with fury over the secrecy of the arrangement – revealed yesterday at
JournalLive - North East news, Newcastle, Tyne & Wear, The Journal newspaper – and demanded to know where the cash had gone.
A High Court case was due to begin today in which the airport was claiming £8.5m from ex-boss John Parkin and the estate of former finance director Lars Friis, who died in 2006.
But the parties reached a confidential 11th-hour out-of-court settlement yesterday over the bonus payments made to the former directors after they remortgaged the airport in 2006 in a £163m deal.
Newcastle Central MP Jim Cousins said: “It is our money, not theirs and we have a right to know what sum of money was involved.”
More than half the cash – £83m – was shared among the five Tyne and Wear councils and Durham and Northumberland county councils, which collectively own 51% of airport shares. The remaining £80m went to the other shareholders at Copenhagen Airport. But the confidentiality deal signed yesterday means council tax payers will have no idea how much of the bonus payments will now return to public funds and what Mr Parkin and Mr Friis were alleged to have done wrong.
Mr Parkin was suspended in March last year, three months after the refinancing deal, before moving on to take charge of Leeds Bradford Airport. He had insisted he would clear his name at court.
He secured a bonus and wages worth £5.956m and Mr Friis the remainder of the total bonus of £8.547m.
Yesterday the High Court confirmed the case had been settled and removed from its listings. The case had been due to last up to three weeks.
A Newcastle Airport statement said: “The trial due to begin on October 22, 2008, will not now take place.
“Newcastle International Airport Ltd, Mr Parkin and Mrs Friis have reached agreement as to terms of settlement of their dispute.
“The terms of their agreement will be subject to a court order to be made in the next few days and are confidential. No further press release or comment will be made by any of the parties regarding the dispute or the settlement.” Mr Parkin’s spokesman would not comment, nor would South Tyneside Council, which is “lead authority” for the airport councils.
Graham Eastwood, spokesman for Unite, the union for airport staff, said: “I now have to try, on behalf of the workforce at Newcastle Airport, to press the new chief executive and the directors to come clean – which of course they are not going to do if it’s going to jeopardise a significant amount of money.
“The workers at Newcastle Airport and the people of the North East have a right to know what has happened.”
Labour’s Mr Cousins said: “The sums of money involved are clearly substantial. The issues that lie behind them are also important issues that bear upon the decision-making of the airport authority.
“It doesn’t surprise me that this has been settled out of court. The airport authority was clearly going to settle out of court because they wouldn’t have wanted to have all of this in a public arena.”
A Commons Treasury Committee member, he said: “But in the end, it is our money, not theirs and we have a right to know what sum of money was involved.
“We don’t need to know the exact details of the deal, but we do need to know the cost to the airport of the settlement as a whole.”
North East Minister Nick Brown said: “I am deeply disturbed by the arrangements as reported. They seem to me to be fundamentally wrong. I cannot comment further because I believe the matter is before the courts.”
Tyne Bridge Labour MP David Clelland, a Commons Transport Committee member, said: “I think that if there is that much money involved, the public deserve much more transparency than seems to have been the case so far.”