Special meeting to be held to scrutinise council's proposed £3 million loan to Northampton shopping centre

In December, cabinet members backed the multi-million-pound loan, which would help the Grosvenor Centre with the H&M move and bring in flexible workspaces and micro shops into the venue. In return, the authority would get control over the future use of Belgrave House, which was subject to a tricky legal document only allowing the property to be used for residential homes.

However, a week after the decision was made, opposition councillors on West Northamptonshire Council (WNC) demanded that the plans be scrutinised before diving headfirst into the deal. An extraordinary meeting is lined up for Monday evening (January 20), where members will be able to discuss the proposals in more detail.

At the time, Labour Group Leader Wendy Randall, who led the call-in, commented that she wanted to make sure that members weren’t “having the wool pulled over [their] eyes” in regards to the loan. Meeting papers list 10 cross-party councillors who teamed up to bring the decision in for questioning, including five Labour councillors, four Liberal Democrats and one Independent member.

The reason listed for the call-in on the website states: “This decision does not follow best practice of making the most efficient and effective use of resources. The council does not need to lend money to global corporations like H&M to achieve a public sector-rated loan and public sector rates.

“A low rate rather than a commercial rate of lending may be seen as a subsidy and may be subject to the regulations about state aid – there is no state aid paragraph in the report to clarify this point.”

State aid is when an advantage or subsidy is granted by a public body on a selective basis.

The scrutiny review will also ask to see the business case for the loans and review future costs that the council must enter as a result of the project. For example, as part of the negotiations, WNC would receive permission to place solar panels on the Grosvenor Centre Car Park, however the cost of installation and maintenance is not mentioned in the report.

A range of alternative actions have been listed as suggestions to the cabinet, including not entering into the agreement, clarifying the council’s position with state aid, clarifying the council’s position with commissions, or not loaning money to all the parties listed.

Council leader Adam Brown and cabinet member for local economy, culture and leisure Councillor Daniel Lister are expected to attend the meeting alongside the scrutiny committee.

Both backed the scheme in December, with Councillor Brown stating that the original report was “not only a solution to that problem but also a proposal that brings together a lot of benefits”. The WNC officers’ report also wrote that the proposed agreements were “as good a deal the council is likely to be able to obtain”.