Purpose

The Council is considering a funding arrangement of £500k to a Local Body

That the Cabinet Member:

a)    notes the business case for making the funding arrangement in Appendix 1;

b)    notes the financial position in relation the Local Body in Appendix 2;

c)    authorises the funding arrangement as a loan of £500k to the Local Body is made on the basis of the Heads of Terms in Appendix 3; 

d)    delegate to the Chief Executive Officer in consultation with the Director of Finance authority to conclude all formalities to implement the loan on the basis of the Heads of Terms.

Alternative options

1.             Not to grant a loan– the Local Body has indicated that if the loan is not granted then they are likely that they would not have sufficient funding to continue operations by December 2024. This is not recommended as the Local Body is key component of the Council’s plans for economic development within Herefordshire.

2.             To grant the loan to the Local Body but in the absence of security- this means that the property owned by the Local Body is not security for the Council’s loan. This is not recommended. Although it is recognised that the Local Body is a key component, it is a financial risk to give a significant sum of money without the necessary protections to ensure that the Council can recover its money.