Cabinet met on 16 November 2017 to progress the Southern Link Road, and look at the current state of the Council’s Budget. As the meeting started the large number of public present were advised that the Cabinet report mentioned repayment of a loan of £1.697million. This was apparently incorrect – the ‘loan’ was to be re-profiled, not repaid.
It appears that the S151 officer (Herefordshire Council’s Chief Finance Officer) was not aware that in early 2017 the Marches LEP had made advances of money totaling £1.697million to Herefordshire Council. This was not a grant as the money was to be repaid to the Marches LEP in full by 31st March 2018. Just one of a number of draw down agreements, for January 2017, signed by Herefordshire Council officers, can be seen here – SWTP Drawdown Notice 9.1.17 of £1.066M from Marches LEP to be repaid by 31.3.18.
The Herefordshire Council Leader, Councillor Johnson, was very keen to make it clear to the meeting that the council were not being asked to repay a loan, the money was a grant and it was being “re profiled”. Councillor Johnson had been re-appointed as Chair of the Marches LEP Joint Executive Board in June 2017 and the Minutes of that meeting record his comments about LEP repayments “The chairman of the LEP board queried at what point the recyclable grant would cease and become just a grant. He argued that this should be discussed by the board. The LEP partnership manager responded that contracts would be issued on the basis that all money allocated would be repaid, there would be a long stop date but this would be tailored to each project “. The full minutes of this meeting can be viewed on the Herefordshire Council website here .
So does Herefordshire Council have to repay £1.697M to the Marches LEP by 31st March 2018 or not?
An email from the Marches LEP dated August 2017, which was referred to in the Cabinet meeting, says that the money has to be repaid saying :-
“Good to chat with you just now. We discussed the possibility of Herefordshire paying back the funds we previously released to the SWTP (South Wye Transport Package) which helped the LEP to meet the to meet the level of Growth Deal spend required by Government – thank you again for helping. The Government’s profile of funding to come to the LEP doesn’t match the expected spend profiles for our projects so potentially we may not be able to pay out all claims during the years 2017/18, 18/19, and 19/20 (with the situation resolved in 2020/21). Please could you consider transferring the funds (£1,697,609.36) back to the LEP during the financial year? Happy to discuss further, including the timing, we certainly don’t want to create problems for you. Let’s chat again once you’ve had time to think about it?”
The full redacted email can be seen here Marches LEP Email Aug 2017 request for repayment
Did the S151 officer even know about this paperwork trail or the request for repayment?
If not, why not?
It’s time non-Cabinet Councillors sought urgent clarification on behalf of all Herefordshire residents. The next Audit and Governance Committee on 29th November, should interrogate Officers who provide information to Cabinet, so that a true picture of the Council’s outstanding debts can emerge.
Cabinet was confused about this issue on 16th November and gave misleading information to the press and public present at the meeting. Clarification about this money and a true position of Herefordshire Council’s finances is urgently needed.
Here for Hereford thanks the local Green Party who made the Freedom of Information requests which uncovered the trail of documents around the funding for the Southern Link Road.