The Council’s Policy Development & Scrutiny Panel for Resources will be reviewing the recent decision to provide a loan to the Wilmington Farm Solar Array.
This will be discussed at the next Panel meeting on September 29th, 2014 at 10am at The Guildhall, Bath.
This item of the meeting (known as a call-in) will consider the process leading to the Cabinet Members’ decision, taken on September 2nd, 2014.
This cross-party panel for Resources will consider reasons for the decision and the call-in request, before recommending one of three options: the Cabinet Members should reconsider their decision; the Cabinet Members should proceed as agreed, or it should refer the matter to full Council to review the decision-making process (if this option is chosen, the final decision would still reside with the Cabinet Members).
The call-in follows a decision by the Cabinet Members to in principle make the loan of £500K to the Wilmington Farm Solar Array, subject to due diligence.
They also made a decision to authorise the Divisional Director for Strategy & Performance, in consultation with the Cabinet member for Resources, to authorise the loan once satisfied that due diligence has been completed and subject to relevant terms and conditions.
Subsequently 10 councillors formally asked for the Cabinet Member’s decision to be reviewed – or called-in. At the public meeting, the Scrutiny Panel will receive a statement from the Cabinet Members, and from Cllr Liz Richardson, on behalf of the 10 councillors.
Cllr Robin Moss, Chair for the Call-in said: “It is important to scrutinise financial decisions as Bath & North East Somerset Council has a good reputation for sound financial management.”
The Panel is also keen to hear from local people and stakeholders who have a view on this issue.
Members of the public wishing to speak at the meeting should contact Democratic Services on 01225 394411 by 5pm on Wednesday September 24th, 2014.
Alternatively, written submission, by the same deadline, can be submitted by email to [email protected] or in writing to: Policy Development & Scrutiny Team, Solar Array Loan Call-In, The Guildhall, Bath, BA1 5AW.
Research by Conservatives councillors has revealed that the credit limit recommended for the solar array company by ratings agency D&B is just £15,000 – far lower than the £500,000 the Council is planning to lend.
Conservatives have said that whilst they back measures to support local renewable energy projects, they are concerned that the loan may not represent the best deal for local taxpayers and needs greater scrutiny.
The opposition group has therefore decided to ‘call-in’ the decision so that the proposed deal can be more closely scrutinised by a panel of Councillors.
Conservative Councillor Liz Richardson, who is leading the call-in of the decision, said: “We fully support efforts by the Council to cut carbon emissions and increase the use of renewable energy in the area.
“But it’s also extremely important that taxpayers’ money is spent wisely, especially at a time of tight finances and when the Council is cutting back on local services like public toilets and Early Years support.
“We are concerned that the Council has not exercised due diligence before taking the in-principle decision to award this loan. This should be done before the decision is taken, not after.
“It is highly unusual for the Council to make a loan of this sort and of this size to a private enterprise, and this clearly represents a potentially risky investment for a relatively low rate of return of 2.5%.
“This compares to a return of 6.5% on other investments the Council has made in recent times.
“Indeed, a credit score from rating agency D&B recommends that, due to its risk profile, a prudent level of credit to this company would be for no more than £15,000 – yet the Lib Dems are planning to loan half a million.
“That’s why we believe it is important for this decision to be scrutinised further.”
Conservative Group Leader, Cllr Tim Warren, added: “There are a number of questions surrounding this loan which clearly need answering.
“For example, why is it necessary for the Council to loan this money to the company rather than a bank?
“And why were no other options considered for using this money in a way which supported the creation of a larger number of jobs, or generated a greater return for the Council?
“The Council could also have considered using this money for other renewable energy projects which benefit local people more directly, such as providing more home insulation, helping residents install solar panels on their homes, or providing money to local schools to install renewal energy schemes.
“This is a large amount of taxpayers’ money to put into what appears to be a risky investment, and residents would expect this to be more closely scrutinised.”
