Agenda item

                 Report by Executive Director Alistair Cunningham OBE.

Cllr Simon Jacobs, Cabinet Member for Finance and Procurement, presented a report seeking a loan facility to Wiltshire college to enable them to complete their campus redevelopment.

Cllr Jacobs reported that Wiltshire College had asked the Council to consider offering a further loan facility to cover the refinancing of their current loan and to make up the shortfall on their first loan of £65,000. The first loan was agreed by Cabinet in July 2019 and would enable the College to redevelop their Salisbury and Lackham College campus. 

In response to a questions from Cllr Ian Thorn, Chairman of the Financial Planning Task Group, about the value of assets offered as security against the loan and the interest rate of the loan, the Leader, Cllr Jacobs and Director of Housing and Commercial Development confirmed that the value of assets offered as security would cover any default in repayments of the loan, and in the unlikely event of any default, the assets would not impact on the education offered. The interest rate offered reflected the current competitive market rate for the refinancing of the loan.

The Leader confirmed that the Financial Planning Task Group would have the opportunity to review all the relevant information in connection with the loan.

Cllr Jon Hubbard, Chair of the Children’s Select Committee, suggested that Wiltshire College should be encouraged to consider the provision of education in locations around the county that they did not currently provide an education offer at. Cllr Jacobs confirmed that this was a direction of travel that the Council would wish to consider.

The Leader indicated that the partnership work is ongoing but would not form part of the discussions in relation to the loan arrangements.

Resolved:

1.    To agree to provide a loan facility of up to £6.312 million to Wiltshire college subject to obtaining required security for the loan and proof of cash flow to repay the loan.

2.    Subject to agreeing to provide the loan facility agree to include a capital allocation of £6.312m in the 2020/21 capital programme

3.    To delegate the detail of the security required and the commensurate interest to be charged on the loan to the Director of Finance and Procurement in consultation with the Cabinet Member for Finance, Procurement, Transformation and Operational Assets. 

4.    To delegate to the Director of housing and commercial development the authority to secure the charge on the security offered by Wiltshire college for the loan.

5.    To delegate to the Director of Housing and commercial development in consultation with the Cabinet Member for Finance and procurement authority to negotiate an option on Wiltshire College land in return for the loan facility.

Reason for Decision:

The proposals will provide a loan facility to enable Wilshire college to refinance their current loan portfolio. In turn this will enable the Wiltshire College to offer courses to the benefit of young people in Wiltshire as well as enable the Council to generate a return on the loan commensurate with the risk that is presented. The Council will seek to negotiate an option to further its strategic interests and enable the Chippenham Futures project in return for the loan facility.

(Note:Dr Carlton Brand, Executive Director, declared an interest in relation to agenda item 9 – Provision of Loan Facility for Wiltshire College – as he is a Governor of the College. He left the meeting during the item’s consideration.)