Flag ship Norfolk innovation centre could be repossessed over unpaid £2.7m loan
PUBLISHED: 11:58 30 November 2018 | UPDATED: 16:01 03 December 2018
© ARCHANT NORFOLK 2016
A council could repossess a flagship business centre from an enterprise agency which owes it £2.75m.
West Norfolk loaned the money to Norfolk and Waveney Enterprise Services (NWES) to build the King’s Lynn Innovation Centre (KLIC) The centre, which opened two years ago, helps new businesses become established.
But NWES has not repaid the money to the council. The deadline is at midnight tonight (Friday, November 30).
Council leader Brian Long said: “We are still in negotiation and the deadline for the loan is not until tonight. At that point we will be considering the options available.
“The bottom line is I have to get the best value for the public purse.” Mr Long said taking possession of the building was being “seriously considered”.
“The bottom line is the council would come out of all of this with an option that generates more money,” he said.
NWES chief executive Jo Clarke said handing the building back to the council was one of a number of options on the table but she was confident the loan could still be repaid in full.
“NWES fully accepts that the council’s primary concern must be the protection of taxpayers’ funds first and foremost and this reflects our own stance,” she said.
“We’re committed to identifying a workable solution for both parties and have submitted proposals to the council to ensure this happens. Our dialogue is currently ongoing, with a view to ensuring a memorandum of understanding is swiftly put in place.”
In a statement, NWES said: “When Joanna Clarke came into post as NWES chief executive in March 2018, she was made aware that the council had made a substantial loan to NWES to support the construction of KLIC in 2014, which was due to be repaid at the end of November, but at that time no clear plan existed for its repayment.”
Meanwhile, it has emerged that West Norfolk council is one of 23 councils which have loaned a total of £148m to Northamptonshire County Council. It has lent the cash-strapped shire authority £3m.
Some local authorities have expressed concern over whether their loans will be repaid, after the government gave it unprecedented permission to spend £60m raised by selling its HQ on front-line services.
But a report to Northamptonshire county councillors, by the authority’s director of finance says: “This concern is unfounded because whilst the council may have a budget difficulty, it does not
have a cash shortage.
“It is common for councils to borrow from and lend to each other. Some may find themselves with positive cash balances available to invest short-term.”
Mr Long said: “It’s normal practise and despite what is going on in the council they have a credit rating better than the banks we put money in.
“Are they good for the money? They probably have assets worth far more than they owe.”