District council loans £7million to carry out building work at science park
PUBLISHED: 08:23 10 January 2019 | UPDATED: 09:52 10 January 2019
Uttlesford District Council (UDC) has loaned £7million to the company managing its investment in Chesterford Research Park, prompting concern about risk to the public purse.
On December 4, councillors considered a request from Aspire Ltd to borrow funds from the council to carry out work on a rental unit at the science park.
The discussion and cost was initially kept confidential, despite being public money, for commercial reasons.
The amount, £4.25million, has now been made public and is to be repaid at 4.5 per cent over 20 years. £2.75million was loaned to the project in 2017.
Councillor Alan Dean, chairman of the scrutiny committee at UDC, said finding new sources of council income had to be done in an “accountable manner” and abstained from voting on the deal.
Cllr Dean said: “A loan equivalent to one to two years’ Council Tax is a lot of money. I have asked since last autumn for greater accountability over the risks involved, but without much success.”
Daniel Brett, spokesman for Saffron Walden Labour Party, said further investment should be deferred until there is greater economic certainty.
Mr Brett said: “Because decisions are being made in secret, it’s unclear what is happening and whether the Aspire’s joint venture partners, Aviva, will continue to demand more and more contributions. The stark fact is that if Aspire starts to struggle with interest payments, the council will have to deplete its reserves and cut local services.
“Saffron Walden Labour Party accepts that UDC needs to look to new revenue streams as the Government removes core funding, which leaves it vulnerable to running a deficit. However, investment should be spread over a variety of assets in a range of different economic sectors so that public money is not put at risk.”
A spokesman for council said: “Chesterford Research Park is a valuable asset to the district. It provides significant job opportunities and business rate income and is one of the leading employment sites in the district. The park is also recognised internationally for its science-related activity. We are very lucky to have it located within our district.
“The funding request is as expected for the fit-out costs of the Newnham Building. The local Labour Party also seems unable to understand that a joint venture is an equal partnership. Neither partner can ‘continue to demand more and more contributions’. Each opportunity at the park is evaluated on its own merits and must meet a certain level of return before it is presented to the board for consideration.
“The council’s initial investment in the research park meant it made a profit of £1.5m after borrowing costs last year. A similar sum is expected this year. As government grants continue to reduce, this vital funding helps the council deliver the wide range of services on which the public relies. Without it the council would have faced severe challenges in setting a budget in 2018-19.
“All potential investments, which fit with the council’s published investment strategy are evaluated and presented to council for a decision on whether to proceed or not. The council continues to actively look for other investment opportunities whilst continuing to support the excellent facility at Chesterford Research Park.
“It is hugely disappointing to everyone involved in the Park that the local Labour Party continues to talk down the council’s investment for what we can only assume are political reasons.
“It is an excellent, solid investment providing a valuable source of funding to the council while ensuring the continued success and growth of one of the major employment sites in Uttlesford. The council is extremely proud to be associated with the research park and will continue to work hard to promote and develop it in the future.”