Issue - meetings

Report No:   CAB/SE/15/021 TO FOLLOW

Cabinet Member: John Griffiths      Lead Officer: Andrea Mayley

RECOMMENDED TO COUNCIL

That:

(1)     the Section 151 Officer allocates £4,528,871 within the Council’s capital programme, initially financed from capital receipts, with a view to the project being funded by a combination of £1.4m from Taylor Wimpey, a £1.4m loan from New Anglia Local Enterprise Partnership (NALEP), and a loan from Suffolk County Council.  Following the conclusion of the negotiations with these parties and the outcome of the NALEP application, if there is any shortfall, this will be funded by the Council and recovered through the loan repayments by Taylor Wimpey, as set out in 2.9 and 2.10 of Report No: CAB/SE/15/021;

(2)     all of the above be subject to the satisfaction of the Section 151 and Monitoring Officers, in consultation with the Leader of the Council; and

(3)     subject to Recommendations (1) and (2) above, delegated authority be granted to the Head of Planning and Growth, in consultation with the Leader of the Council, to enter into a loan agreement with Taylor Wimpey to commission the electricity infrastructure works.

The Cabinet considered Report No: CAB/SE/15/021 (previously circulated), which sought approval for issues associated with the commissioning of electricity infrastructure works to serve development at Moreton Hall, including Suffolk Business Park.

Councillor Griffiths, Leader of the Council, drew relevant issues to the attention of the Cabinet, including that on 24 February 2015, Council had committed £4,528,871 of funding for electricity infrastructure works to serve Suffolk Business Park.  At that time it was considered that the New Anglia Local Enterprise Partnership (LEP) was likely to provide a loan for this full amount.  It had since been established that the LEP would consider a loan of £1.4m instead.

Negotiations were ongoing with a number of parties, including the County Council, regarding the funding required to deliver the electricity infrastructure in this location. Due to timing issues, authority was sought from Cabinet and Council to commit the full amount of funding from the Council’s unallocated capital receipts to enable the works to be committed.

There was a significant lead in time to ensure the electricity would be available in time for the first phases of development including the new high school.  It was therefore essential that the works were commissioned by the end of April 2015; however, the exact amount of funding from the LEP nor the timing of the supporting funding from Taylor Wimpey or Suffolk County Council would not be known until May at least.

Therefore, to enable the works to be secured, Members were requested to commit to the programme of electricity works at a cost of £4,578,271 (to be initially financed from capital receipts with a view to the project being funded from some or all of the following: £1.4m from Taylor Wimpey; a £1.4m loan from the LEP; and a loan from the County Council).  If there was any shortfall, this would be funded by the Council and recovered through loan repayments from Taylor Wimpey. This would all be subject to undertaking due diligence processes.  As the works would be commissioned by Taylor Wimpey, a loan agreement would need to be prepared between the Borough Council and Taylor Wimpey.

It was envisaged that the £4,528,871 funding would be repaid firstly from the contribution from Taylor Wimpey (£1.4m) and then the remainder either from the commercial lets as they came forward for Suffolk Business Park or by the commercial developer appointed to bring the land forward. 

The Cabinet commended the Borough Council for bringing the partners together to drive this project forward and Members were confident that the allocated capital would be recouped in due course with appropriate interest payments, where applicable.

RECOMMENDED TO COUNCIL

That:

(1)    the Section 151 Officer allocates £4,528,871 within the Council’s capital programme, initially financed from capital receipts, with a view to the project being funded by a combination of £1.4m from Taylor Wimpey, a £1.4m loan from New Anglia Local Enterprise Partnership (NALEP), and a loan from Suffolk County Council.  Following the conclusion of the negotiations with these parties and the outcome of  ...  view the full minutes text for item 55