Sedgemoor District Council is in a sound financial position and should not be confused with the financial situation of Somerset County Council. Sedgemoor has general reserves of £6.3m. The Council's financial strategy is to become more commercial to generate income in order to maintain services. As with any organisation, SDC has to produce a balanced budget each year as is always looking for ways to improve its services whilst cutting costs. Generating more income is a sound business model, which councils across the country are now using.
One of the ways in which SDC can generate money is by lending money for projects that have benefits to the regeneration of the area and the wider community.
All monies lent have legal and financial 'due diligence' tests - this means through financial and legal background checks and detailed investigations prior to signing a loan agreement. The aim of due diligence is to identify any potential problems or unexpected liabilities.
A commercial loan is money lent to an organisation with a payback period and like any other loan from any organisation has interest payable upon the loan. The council will get the original sum back over the payback period, plus the interest, hence the income generation.
Like in any domestic loan or mortgage, the Council secures any loan against the property, so that if the money is not paid back, the council has security.
Any decision to make a loan goes through the due diligence tests, before being debated by Full Council. Within the due diligence tests is confidential and commercially sensitive information about the organisation asking for the loan, so that is why details are not make public. The councillors then debate the pros and cons of providing a loan and come to a democratic decision.
If a decision to go ahead with a loan is made and the documentation finalised, a legal charge will be registered at the land registry and available to the public to see.
Mecure Hotel, Bridgwater - This is a loan that Sedgemoor District Council has agreed to provide at commercial rates. Another was Wembdon Village Hall committee, which helped them to finish off the building of the new hall/venue at Wembon .
The Mecure Hotel is a flagship regeneration project for the vitality and viability of the town centre and is the largest investment into the town centre in recent years. This importance is reflected in a loan from the Local Enterprise Partnership totalling £4.5 million. Market information suggests that, once opened, the site would be worth well in excess of any loan amount.
The site had been in a derelict state for many years and its development is already seeing positive knock-on economic and regeneration effects and will offer employment to over 50 people. There is potential for significant positive economic benefits for the wider town centre and it will be the only four star hotel in Bridgwater.
As far back as 2007, The Bridgwater Vision identified that hotel provision in the town needs to be improved, including both hotel chains and independent quality hotels. This is one of the first steps in that provision.
The hotel will provide 119 bedrooms, as a result of approved changes to the original planning permission which was for 80 bedrooms.
Whilst the hotel is nearly complete, the scheme met a number of challenges in the construction phase, which had a knock-on effect on costs and the planned opening date. These included a large amount of concealed asbestos fibre, oil and paint contamination within the ground, restrictions on construction methods due to neighbour boundary issues, ancient human remains located under the building and most recently, difficulties in getting the compliant external cladding material due to increased demand because of Grenfell Tower.
Councillors debated what would happen if the loan were not to be made and decided that as well as generating income, the Council would not want to see any more delays in the opening of the hotel nor not see it open in the very near future.
Grants available to organisations and businesses
For small or medium sized businesses, Sedgemoor District Council offers various grant schemes. At present (Sept 2018) there is a Suppliers Grant scheme which offers business grants of up to £5,000. https://www.sedgemoor.gov.uk/article/2271/Suppliers-Support-Grant
The £100,000 Sedgemoor Small Business Grant scheme will be launching its fourth round in late 2018.
Sedgemoor District Council also awards grants to various community groups across the district, which total £45,000 a year. These include sports clubs, village halls, voluntary organisations as well as individuals.
Community Health Grants are also available for health-focussed projects across the district.
Community groups, registered charities, leisure centres, housing providers, activity clubs, children's centres and workplaces amongst others are all being encouraged to come up with their own project ideas based on local health and wellbeing needs and then bid for up to £1,000 to support their project.