Why has the Borough Council granted a £20 million loan facility to their new Development Company?

Our West Lancashire has already raised questions about links between Lord Derby’s Estate Director and Savills, the company that advised the Council in setting up its new house-building company.

 I still can't tell you much about this new house-building company Tawd Valley Developments Ltd because the council reports are confidential but you can download a redacted version of one of the council reports here (2.5MB).

What I can tell you, is that the council has agreed to invest £2 million of share capital into the new company.  This struck both me, OWL colleagues and even one Labour councillor as the wrong way to provide funding to the company.  A loan is much easier to extract from the company in the future.

Of more immediate concern though, is that the Council has granted a £20 million loan facility to this new company.  This sum is far in excess of what’s required to build the affordable housing in Skelmersdale that has been announced.  Our West Lancashire moved an amendment to cut this figure in half and although 3 Labour councillors refused to support the whip on Labour councillors to vote against our amendment, it was still heavily defeated. 

So why is the council already authorising such a lending facility to this 100% owned Development company from day 1, when this is around £10 million more than its business plan requires?  When officers were asked the question, no satisfactory answer was forthcoming.

It doesn’t take much imagination to realise that the green belt sites proposed for release by the council in their controversial local plan proposals (such as his one in Bickerstaffe) would be prime targets for the many millions of pounds that this new council Development Company has available.

The Council may well be setting itself up to release green belt; buy the land; award itself planning permission and then develop the prime farmland in our communities.