To update the committee on the current status of the energy from waste loan arrangement to enable the committee to fulfil its delegated functions.

The Head of Strategic Finance advised the committee that the report provided assurance to the council as lender that amounts had been repaid in line with expectations and on the ability of Mercia Waste Management Limited (Mercia) to make future repayments in line with the terms of the loan arrangement.  It was noted that a Ratio Compliance Certificate had been received and there were currently no indicators of risk to note.

In response to questions, the Head of Strategic Finance confirmed that the loan agreement included a review of the ratios every six months, the arrangements were monitored jointly with Worcestershire County Council, and the interest rate was fixed.

The committee discussed the implications of recent rises in the Bank Rate and the potential need for officers involved in monitoring to consider any additional risks which may result from changes to national monetary policy.  The Head of Strategic Finance advised that the Ratio Compliance Certificate looked at both historic performance and future cashflow and attention was drawn to the risks and mitigating actions identified in the joint risk register (Appendix A, agenda page 53).  The Director of Resources and Assurance added that the committee would be informed if there was any indication of the position changing.

In response to further questions, the Director provided brief overviews about the repayment terms associated with the Public Works Loan Board, and the purpose of the council’s waste reserve.

RESOLVED:   That:

a)           The risks to the council, as joint lender, are confirmed as being reasonable and appropriate having regard to the risks typically assumed by long term senior funders to waste projects in the United Kingdom and best banking practice; and

b)      Arrangements for the administration of the loan are reviewed and confirmed as satisfactory.