Caistor council feeling pressure over project loan scheme

The loan is needed to bridge the funding gap for 2-4 Market Place. Image: Dianne Tuckett

The comments came at an extra-ordinary meeting of the council following a public meeting last Thursday (November 23) regarding a potential £750,000 government loan to plug a funding gap in the 2-4 Market Place restoration project.

Councillor Steve Hodson said: “The town council is under unnecessary pressure at the moment and I think it is very unfair that we find ourselves in that situation .

“Some of it is due to circumstances beyond our control or beyond their control, but the fact of the matter is we are under undue pressure and we should be allowed to pursue our due diligence.”

As previously reported, the government loan would be repayable over a 50-year period and can only be made to an authority, so the town council would be liable for the loan, although the money would be passed on to Caistor and District Community Trust which would pay the agreed instalments.

Government guidelines say the council must build up their reserves to cover loan repayments, which would mean a rise in the town council element of council tax. This would be around a £30 increase for Band D properties, less for those in lower Bands.

The public meeting had shown overwhelming support for the loan to be drawn down by the town council for the project, as the the resulting £3million investment in the town (with the grant funding already promised) was an opportunity ‘too good to be missed’. More than 50 people attended the meeting, with many already supporting the project as community shareholders.

Councillors had previously agreed a process for consideration of the loan and one part of that is still outstanding – an up to date financial plan projection for the project.

Four councillors put forward a motion to allow the loan decision to go ahead without this requirement, but this was defeated.

The loan decision, therefore, could not be voted on, but will be on the agenda for the December 14 meeting.

The council will also look to see if the can loan could potentially be underwritten by either the county or district council.