The leader of a North Yorkshire council has hit out at suggestions a £35 million loan to a local housing association has put public funds a risk.
Five years ago Hambleton District Council offered Broadacres Housing Association the loan at a commercial rate of interest.
Campaigner Dr John Gibbins from Sowerby, who objected to the 900-home Sowerby Gateway development near Thirsk being built, claimed public money could be jeopardised after information on the loan emerged.
Dr Gibbins said he wanted to know what the loans were secured against and who owned the land.
He said he was also concerned that due diligence had not been carried out.
Councillor Mark Robson said the loan is simply a financial transaction that benefits both parties, with the loan secured on the association’s housing stock.
“This loan was not ‘bailing out’ Broadacres from financial difficulties as suggested – it is simply a transaction that benefits both organisations,” he said
“In the last financial year Hambleton District Council received £1.2m in interest payments which is supporting our residents and front line services and far better in our hands than in the hands of a bank.
“There has been a good deal of misinformation in the press about this loan – it has been inaccurate, misleading and politically motivated.
“Prior to the loan being offered a great deal of due diligence was undertaken for the council by independent auditors and financial advisors which concluded that Broadacres was able to meet its repayment obligations.
“At no time have public funds been at risk – the council has instead benefitted from being able to offer this service rather than see the loan come from a high street bank.”
Be the first to comment