Meeting will agree probe into council losing £1m on innovation centre
PUBLISHED: 08:33 18 June 2019 | UPDATED: 08:33 18 June 2019
A council which lost almost £1m in a new enterprise centre project will today discuss how to investigate the deal.
West Norfolk council caught a cold after it loaned Norfolk and Waveney Enterprise Services (NWES) £2.7m to build the King's Lynn Innovation Centre.
NWES defaulted on its loans and now the council has been told the building is worth £1.8m - just under £1m less than the amount it is owed.
Tonight the council's cabinet meets to agree terms of reference for an independent investigation into the deal.
A report warns the probe is likely to cost between £25,000 and £40,000.
It will focus on the financial arrangements between the council and NWES, the due diligence conducted prior to each loan, along with "member involvement" in the approval and oversight of the project.
The Local Government Association (LGA) has put forward six candidates to chair the enquiry.
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The chair will be chosen by the leaders of the three main political groups on the council.
An investigation earlier this year found the council carried out no checks on NWES.
It also discovered legal agreements between the council and NWES were "inappropriate", heavily favoured NWES and were not signed by the council.
Council staff raised concerns that NWES used a company of one of its directors to manage the project.
John Balch was a strategic director of NWES while also the managing director and shareholder of Nautilus Associates, the project managers.
And when some of the council money was approved, the council leader, Nick Daubney, was a director of NWES.
Mr Daubney declared his interest and left meetings where the KLIC was discussed.
Despite the problems, the council said the building, which opened in 2016, was a "remarkable success story" which was fully occupied and would provide a six figure financial return.