EAST Lothian Council had to repay tens of thousands of pounds in overpaid rent to Musselburgh Racecourse, it has emerged.
The refund, believed to be about £90,000, followed a mistaken valuation of buildings owned by the council.
Directors at Lothians Racing Syndicate, who co-run the course with the council, claim the gaffe shows a conflict of interest in how the premises are run. But East Lothian Council say it was a genuine error after repairs were overlooked in the initial evaluation.
John Prideaux, chairman of Lothians Racing Syndicate, said: “This is just one example of why the governance of Musselburgh Racecourse is no longer fit for purpose.”
Not-for-profit entity Musselburgh Joint Racing Committee (MJRC) runs the course – made up of four councillors and three LRS directors.
The course has been dogged by controversy in recent weeks as LRS accuse councillors, led by MJRC chair John Caldwell, of voting through contested decisions on a 4-3 majority.
John Prideaux and fellow LRS members say councillors should have declared an interest before accepting the inaccurate valuation as their authority stood to gain from rent.
They say the course only got a refund last year following three years of inflated fees after the LRS commissioned its own independent valuation.
The MJRC pays the council about £120,000-a-year in rent – but the valuation in 2013 is believed to have set the amount at £150,000.
A top independent lawyer’s report into the running of the course included the rent overcharge, only to be shelved by the MJRC on a 4-3 vote by councillors, allege the LRS.
“We should be looking to bring a chairman on board who is independent of both the council and LRS, alongside at least one other independent member,” said Mr Prideaux.
The British Horseracing Authority has only granted Musselburgh a temporary licence until it wins assurances on next year’s course budget.
Other issues at the course include a second vote of no confidence by staff in the leadership of the MJRC and the loss of Investors in People status, a nationally recognised standard.
Council chief executive, Angela Leitch, said the rent overpayment was “settled a year or so ago”.
Ms Leitch confirmed the 2013 valuation was carried out by the District Valuer, as directed in the course’s terms of the occupancy – only to be contested by the LRS.
“To reach agreement with LRS and conclude the rent review, the council accepted the second valuation and made the appropriate refund of rent.”