'I'm not happy' - Opposition expresses discomfort as council approves £3 million loan to Northampton shopping centre

West Northamptonshire Council (WNC) will pursue giving a £2 million loan to the Grosvenor Shopping Centre owners, Evolve, to help move H&M into the centre and another £1 million to support the introduction of flexible workspaces into the venue.

A further £375,000 capital investment from WNC will also be made to introduce ‘micro shops’ in vacant space on the first floor of the Grosvenor Centre.

The authority revealed that it entered negotiations with Evolve to change the lease to Belgrave House and solidify its rights to install renewable energy equipment on the Grosvenor multi-storey car park. It said that the deals would further help enhance and create an inviting Northampton town centre, whilst benefiting both parties.

Cabinet member for local economy, culture and leisure, Councillor Daniel Lister, said the project would secure H&M remaining in Northampton, who would otherwise likely have left, and bring vacant town centre areas back into use.

Councillor Ian McCord (Deanshanger, Independent) told cabinet members at a meeting last night (December 10): “I’m not happy with any of this report. I do not believe that it is the job of WNC to be providing loans to private sector retailers, particularly global operators with billions of pounds of turnover.

“Local government in general do not have a very good history with loans to the private sector and I’m not very comfortable with any of this.”

Labour group leader Councillor Wendy Randall also expressed her apprehension on the loans. She called the arrangements “bizarre”, referencing the £2 a year rent afforded to the centre.

Replying, finance portfolio holder Councillor Malcolm Longley explained: “Bizarre is correct. What we have here is a method of extraction from what’s a very intractable problem.

“It’s a legacy thing. We didn’t make any of these decisions, we’re trying to extract ourselves from what was a very bizarre arrangement and this is currently where we stand.”

Council documents state that under the current sub-lease the council has on Belgrave House, which was taken out by the former Northampton Borough Council (NBC) in March 2021, the building can only be used for residential purposes for key workers. Plans for the apartments, known as ‘Clock House’, were scrapped earlier this year due to increased costs, partly because of enhanced fire protection requirements.

However, WNC is still subject to paying a service charge and insurance charge for the building. The authority revealed that recent charges totalled around £85,000 per year.

To make the best use of WNC’s 970-year sub-lease of Belgrave House, which runs to 2991, the authority agreed upon Evolve’s loan proposals to change the building restrictions to allow other uses. The Greyfriars regeneration vision currently flags the building for office space.

The negotiations also allowed WNC to remove any room for Evolve to dispute the council’s rights to install renewable energy equipment at the Grosvenor car park. The local authority has also agreed to plans to offer 180 two-hour free parking spaces within the multi-storey to attract a new leisure operator to the former Sainsbury’s unit, which papers say will likely be a gym.

Leader of WNC, Councillor Adam Brown said: “I think I had some of the same reservations that my opposition colleagues set out when I first read the paper. My mind was put at ease by the level of security being sought for the loan - you couldn’t mitigate the risk any more in my view.

“If it were the case of lending a retailer £2 million from the public purse, this paper wouldn’t be before us today - I would’ve killed it at inception.

“I think given the intractability of the problems around Belgrave House and the mess that was created around that particular lease- we are closer in historical terms to the Battle of Hastings than we are to the end of that lease- to extricate ourselves from that lease requires some manoeuvring. This is not only a solution to that problem but also a proposal that brings together a lot of benefits.”

The authority noted in the report that there is a risk in the proposals to lose, in whole or in part, the £3 million loaned to Evolve. It considers this to be “low risk” and says that further due diligence and security arrangements will be carried out.

Papers state the proposed set of loans and agreements is “as good a deal the council is likely to be able to obtain”.