Issue - meetings

To consider and endorse, or make recommendations to the Cabinet Member for Economic Development on the proposed decision.

(Mr D Smith, Director of Economic Development, and Ms J Ward, Strategic Programme Manager (Business Investment), attended the meeting to present the report).

1.         Mr Smith introduced the report which set out the programme for reinvesting the repayments of loans to businesses that were previously made by Kent County Council from the government’s Regional Growth fund.

2.         Mr Smith then responded to questions from Committee Members, and made points including the following:

·         The improvements being made in the administration of the three schemes had been recorded in a ‘lessons learned log’, which had led to a more detailed appraisal process for applications. There was still a reliance on professional advice secured on each application, which was then submitted to an independent investment advisory board, drawn from people already involved in the project, ensuring no loss of experience.  Following approval of a loan, the monitoring process had been improved by introducing more formal logging of documentation, to allow recording of every decision and monitoring of companies who failed to send monitoring returns on time, or failed to meet conditions imposed around job numbers or finance.  

·         The report summarised a rather lengthy report which was commissioned to find unmet demand.  The full report would be made available to the Cabinet Committee Members, as it provided more information around totals. There was a very large unmet demand by small firms for finance which they could not get through commercial sources.  KCC was limited in the amount made available from the legacy of the Regional Growth Fund, so it was appreciated that the decision would lead to a lot of companies unable to get money. 

3.         Ms J Ward then responded to questions raised by Committee Members and made the following points:

·         All new programmes specified that security would be taken and applicants were asked to declare the kind of security they would offer at the application stage.

·         If land or property was purchased with any allocation received from the fund the loan agreement would specify security required on those purchases.

4.         RESOLVED that the Cabinet Committee endorse the proposed decision of the Cabinet Member to:

(a)  Delegate to the Director of Economic Development the authority to launch a new scheme on behalf of KCC to invest recycled RGF loan repayments to eligible organisations in the Kent and Medway area; and

(b)  Implement the governance arrangements for the Kent and Medway Business Fund as detailed in the report.

To receive a report from the Cabinet Member for Economic Development and the Corporate Director of Growth, Environment and Transport on a proposed decision to launch a scheme to invest recycled Regional Growth Fund loan repayments

(1)       Mr Bowles declared an interest in this item as he was a member of the Tiger Strategy Board for the RGF Tiger Fund which is a strategic board and does not make decisions on applications received from businesses.

(2)       Mr Kite declared an interest in this item as he was a member of the Tiger Strategy Board and the Tiger Approval Panel which makes recommendations to Kent County Council, as the accountable body, on the funds awarded, or not, to business.

(3)       As they considered the interests were not Disclosable Pecuniary Interests or Other Significant Interests, as defined by legislation and the Council’s constitution, they remained in the meeting. 

(4)       Jacqui Ward (Regional Growth Fund Programme Manager) introduced the report which asked the Cabinet Committee to consider and endorse or make recommendations to the Cabinet Member on a proposed decision to launch a new scheme to invest recycled Regional Growth Fund (RGF) loan repayments.

(5)       Mrs Ward said that since 2011 Kent and Medway had benefitted from government investment of £55 million from the RGF and this had supported the Expansion East Kent, Tiger and Escalate business loan schemes.  All of the original funding had been disbursed but as loans were repaid about £5-£7 million each year would be available for reinvestment in companies with growth potential.  Mrs Ward also said that the Tiger Strategy Board and others had been consulted about the proposal and there was interest from the business community in the proposed Kent and Medway Business Fund.

(6)       Mr Smith (Director of Economic Development) said that on reflection it would be more realistic to launch the new fund in January 2017 and not December 2016 as suggested in paragraph 4.1 of the report.

(7)       In response to comments and questions officers said:

(a)       The report was intended to set out the principles of establishing a fund and not to describe the mechanics of the three funds currently in place or the detailed operation of the proposed new scheme;

(b)       The money to be recycled came from repayments on loans that had been given over the previous three years;

(c)        £6.6 million was currently held in the bank;

(d)       It was estimated that around £39.5 million would be repaid by 2021 meaning that up to £5-£7 million would be available each year for re-investment;

(e)       Loans would be interest free but 3% would be charged on each loan to cover administrative costs.

(8)       The Cabinet Committee was broadly supportive of the proposal to recycle Regional Growth Fund monies but were concerned about the proposed governance arrangements particularly in relation to authority to sign off loans. 

(9)       Mr Bowles proposed that further consideration be given to the governance arrangements and that a further paper be received by the Cabinet Committee at its meeting on 12 December 2016.  This was seconded by Mr Marsh and agreed by the Cabinet Committee.  

(10)     Resolved to recommend to the Cabinet Member for Economic Development that:

(a)       This report be withdrawn; and

(b)  ...  view the full minutes text for item 181