Agenda item


The Committee gave consideration to a report which sought support from Members to recommend to the Corporate Policy and Resources Committee the granting of a commercial loan of £200,000 to support the redevelopment of a site and creation of new business units within Caistor.


Providing support and infrastructure for start-ups and the micro-business sector was a priority for WLDC and was clearly identified within the West Lindsey Economic Growth Strategy.


In presenting the report, Officers outlined the opportunities associated with the regeneration of the site, as detailed in Section 1.7 of the report.  It was also noted that the project proposal had had support through the Caistor Neighbourhood Plan, had been granted planning permission, and had received a LEADER grant of £39k and would be seeking a further amount of circa £80k, totalling £119,000 The reasons why the applicant had approached the Council were outlined, together with the associated risks and mitigating measures which it was proposed would be in place to ensure any monies released were safeguarded.


A number of Members expressed concern that such types of business were high risk and that the Authority had previously invested in such things with, in their view, limited success.  Members were not convinced that there was the demand level for such units as had been implied.  There were also concerns over the relationship of the applicant with a particular Member of the Council, however, Officers confirmed that no other Members had an interest of a level that would prevent them from participating in the decision.


In response to Members’ questions, Officers confirmed the current land value was higher than the loan value and clarified the ownership of the site.  It was confirmed that the finalised interest rate had not been agreed, however, Members were referred to the information contained within the S151 Officers Comments within the report.  The applicant’s contribution was also clarified.


A number of Members at this stage in the meeting indicated that they had not received the report and thus had not had time to study and consider its content


Members again expressed concern that in their view this was a high risk investment, such businesses were often not successful, the applicant had no proven track record of delivery, some were of the view that the location of the site was less than desirable and would also impact on its success and there were concerns regarding reputational risk.


In responding to Members’ concerns, Officers again re-iterated the proposed mitigation measures which would be put in place to safeguard the loan, including those listed in the Section 151 Officer Comment’s section of the report.  In responding to comments it was further confirmed that any future sale of the land would only be with the Authority’s permission (if a loan was agreed). 


It was stressed that planning permission had been granted and thus the site’s location was not a matter for consideration by the Committee. 


In the absence of the commercial loan, it was at this stage unlikely that the development could proceed to the build phase. The wider Economic Benefits were again outlined to Members.  The project had received LEADER funding and thus the Business Plan submitted had been received positively.   Officers stressed in bringing this proposal to Members it was in acknowledgement that there were currently no specific funding streams for rural developments, as there were in Gainsborough, and considered this development did meet the Council priority of rural economic growth.


In the fullness of time it was likely that a Commercial Loan Policy would need to be developed as such requests were likely to continue to be made.


Members, however, were still uncertain regarding the deliverability, the business plan and the implied need.  A number of Members re-iterated that they had not received the report and had time to consider its content.  Therefore, in light of the concerns they had raised it was proposed and seconded that the matter be deferred pending further information in respect of the Business Plan, in order that Members could be assured regarding deliverability. 


On being put to the vote it was: -


RESOLVED that the item be deferred pending further information regarding the Business Plan in order that Members can be assured that the Project is likely to deliver as expected.