UPDATE: 'Bank of Bournemouth' scheme delayed due to legal issues

Bournemouth Echo: "Bank of Bournemouth" scheme delayed due to legal issues "Bank of Bournemouth" scheme delayed due to legal issues

PLANS for a ‘Bank of Bournemouth’ supplying loans to local businesses and residents have been held up due to legal issues.

The borough council’s Community Finance Initiative was due to start providing small business loans of up to £10,000, drawn from the authority’s unallocated capital reserves of £15 million, in November last year, in a bid to help emerging entrepreneurs.

However the loans will not now become available until after April 1 this year, when new regulations set by the Financial Conduct Authority come into force.

Council Leader John Beesley said a limited company - Bournemouth Community Finance Company - had been set up and granted a Consumer Credit Licence, but new compliance regulations had yet to be published by the government.

“Consumer Credit Licence regulation is currently undertaken by the Office of Fair Trading,” he said.

“This duty will pass to the Financial Conduct Authority on April 1, and requires a different set of compliance regulations, which have yet to be published by Government.

“Consequently we have decided to wait until the new regulations come into force.

“We shall therefore only need to undertake this work once.”

The pilot scheme, which was due to run until March 2015, will also provide mortgages of up to £150,000 for local residents, helping people get a foot on the housing ladder.

This was due to start in “early 2014” and cllr Beesley said the scheme was on track.

“The council also plans to offer mortgages, which we are able to do under the Housing Act,” he said.

“Preparations to offer mortgages continue, and we are ensuring that all the legal frameworks are completed in time.”

The company will offer residential mortgages only to Bournemouth residents who have been in the borough for a minimum of 12 months.

Bournemouth Council has confirmed that the scheme is expected to bring in a return of £8 million over the next decade.

Comments (26)

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11:58am Mon 20 Jan 14

BmthNewshound says...

"...delayed by up to six months as it was “relatively new and unusual” and legally complex " Sounds expensive, how much is it costing to set up the "Bank of Beesley" ? Anyone with half an ounce of commercial awareness would know that setting up a financial services business is highly complex and tied up in red tape and regulation. But once again Bournemouth Council are demonstrating their incompetence.
.
As soon as this scheme was announced it sounded like a highly suspect way of the council distributing public money to a handful of carefully selected individuals and organisations with the council openly admitting that priority would be given to applications connected with Boscombe.
.
Looks like one by one Beesley's schemes are coming unstuck and whilst he's very good at making grand announcements and promises he's not as good at delivering them.
"...delayed by up to six months as it was “relatively new and unusual” and legally complex " Sounds expensive, how much is it costing to set up the "Bank of Beesley" ? Anyone with half an ounce of commercial awareness would know that setting up a financial services business is highly complex and tied up in red tape and regulation. But once again Bournemouth Council are demonstrating their incompetence. . As soon as this scheme was announced it sounded like a highly suspect way of the council distributing public money to a handful of carefully selected individuals and organisations with the council openly admitting that priority would be given to applications connected with Boscombe. . Looks like one by one Beesley's schemes are coming unstuck and whilst he's very good at making grand announcements and promises he's not as good at delivering them. BmthNewshound
  • Score: 16

12:08pm Mon 20 Jan 14

muscliffman says...

BmthNewshound wrote:
"...delayed by up to six months as it was “relatively new and unusual” and legally complex " Sounds expensive, how much is it costing to set up the "Bank of Beesley" ? Anyone with half an ounce of commercial awareness would know that setting up a financial services business is highly complex and tied up in red tape and regulation. But once again Bournemouth Council are demonstrating their incompetence.
.
As soon as this scheme was announced it sounded like a highly suspect way of the council distributing public money to a handful of carefully selected individuals and organisations with the council openly admitting that priority would be given to applications connected with Boscombe.
.
Looks like one by one Beesley's schemes are coming unstuck and whilst he's very good at making grand announcements and promises he's not as good at delivering them.
Ironic you should put this "As soon as this scheme was announced it sounded like a highly suspect way of the council distributing public money to a handful of carefully selected individuals and organisations" because it seems very possible this is exactly what is happening with our money right now as the enormous complexities of this unpopular idea are poured over by 'carefully selected' external consultants, individuals and organisations!

I hope this 'Bank of Bournemouth' never sees the light of day, but I suspect it's already costing taxpayers money
[quote][p][bold]BmthNewshound[/bold] wrote: "...delayed by up to six months as it was “relatively new and unusual” and legally complex " Sounds expensive, how much is it costing to set up the "Bank of Beesley" ? Anyone with half an ounce of commercial awareness would know that setting up a financial services business is highly complex and tied up in red tape and regulation. But once again Bournemouth Council are demonstrating their incompetence. . As soon as this scheme was announced it sounded like a highly suspect way of the council distributing public money to a handful of carefully selected individuals and organisations with the council openly admitting that priority would be given to applications connected with Boscombe. . Looks like one by one Beesley's schemes are coming unstuck and whilst he's very good at making grand announcements and promises he's not as good at delivering them.[/p][/quote]Ironic you should put this "As soon as this scheme was announced it sounded like a highly suspect way of the council distributing public money to a handful of carefully selected individuals and organisations" because it seems very possible this is exactly what is happening with our money right now as the enormous complexities of this unpopular idea are poured over by 'carefully selected' external consultants, individuals and organisations! I hope this 'Bank of Bournemouth' never sees the light of day, but I suspect it's already costing taxpayers money muscliffman
  • Score: 14

12:12pm Mon 20 Jan 14

TWERLY says...

I bet they forgot to add a clause in the contract that you had to pay the money back !!!!!!!
I bet they forgot to add a clause in the contract that you had to pay the money back !!!!!!! TWERLY
  • Score: 5

12:25pm Mon 20 Jan 14

trevone says...

Quite clearly the Council were totally out of their depth from the outset. Why don't they just return the reserves to the rightful owners- the hard pressed council tax payers of this town. Otherwise they will simply dissipate in legal fees what are rightfully our reserves as Bournemouth council tax payers.
Quite clearly the Council were totally out of their depth from the outset. Why don't they just return the reserves to the rightful owners- the hard pressed council tax payers of this town. Otherwise they will simply dissipate in legal fees what are rightfully our reserves as Bournemouth council tax payers. trevone
  • Score: 11

12:50pm Mon 20 Jan 14

PokesdownMark says...

Ludicrous situation that was entirely anticipated by myself and many other regular contributors.

The question remains, how much of our money will be spent before the idea is scrapped? Do they even have this defined in any sort of programme plan? Who is working on this and what is their experience? Ok thats three questions.
Ludicrous situation that was entirely anticipated by myself and many other regular contributors. The question remains, how much of our money will be spent before the idea is scrapped? Do they even have this defined in any sort of programme plan? Who is working on this and what is their experience? Ok thats three questions. PokesdownMark
  • Score: 10

12:54pm Mon 20 Jan 14

Isosceles says...

I could never understand how a council can be a bank but it seems that they can be neither properly.
I could never understand how a council can be a bank but it seems that they can be neither properly. Isosceles
  • Score: 8

12:55pm Mon 20 Jan 14

kalebmoledirt says...

Probably the same consultants solicitors,and accounts that persuaded the council to launch the scene are working on it now.
Probably the same consultants solicitors,and accounts that persuaded the council to launch the scene are working on it now. kalebmoledirt
  • Score: 6

12:58pm Mon 20 Jan 14

Bpl333 says...

if it a way to create a new income stream then why not look at it?
cuts are operating year on year as we all know....so what do we do, to stop more services being cut?
if it a way to create a new income stream then why not look at it? cuts are operating year on year as we all know....so what do we do, to stop more services being cut? Bpl333
  • Score: -5

1:02pm Mon 20 Jan 14

fedupwithjobsworths says...

The ‘bank’ will use £15 million of the council’s unallocated capital reserves and it is intended to help locals turned down for loans and mortgages by the main banks, while bringing in an estimated £8 million annual return,,,????!!!

£8 million annual return on £15 million outlay ..... cloud cuckoo land I suspect, unless they actually mean they will get back £8 million of the £15 million investment. Mind you I always thought the Council was a useless bunch of Bankers
The ‘bank’ will use £15 million of the council’s unallocated capital reserves and it is intended to help locals turned down for loans and mortgages by the main banks, while bringing in an estimated £8 million annual return,,,????!!! £8 million annual return on £15 million outlay ..... cloud cuckoo land I suspect, unless they actually mean they will get back £8 million of the £15 million investment. Mind you I always thought the Council was a useless bunch of Bankers fedupwithjobsworths
  • Score: 10

1:09pm Mon 20 Jan 14

wonderway says...

that stopped one land concultant trying to get his money
plus one green blob getting rest

now who's next on beasleys hand out list

finacial conaltants ............check

auditors............
.................. check

solicitors..........
....................
...check

mouchel.............
...............check


anyone else in line ?
that stopped one land concultant trying to get his money plus one green blob getting rest now who's next on beasleys hand out list finacial conaltants ............check auditors............ .................. check solicitors.......... .................... ...check mouchel............. ...............check anyone else in line ? wonderway
  • Score: 2

1:12pm Mon 20 Jan 14

Isosceles says...

If the council employees who are involved are so good at banking, why are they not working for a bank and not wasting council taxpayers money?
If the council employees who are involved are so good at banking, why are they not working for a bank and not wasting council taxpayers money? Isosceles
  • Score: 2

1:42pm Mon 20 Jan 14

kalebmoledirt says...

If you can,t run a bath have a go at starting and running a bank. Sounds like the new PPI P##s poor investment
If you can,t run a bath have a go at starting and running a bank. Sounds like the new PPI P##s poor investment kalebmoledirt
  • Score: 0

1:46pm Mon 20 Jan 14

InkZ says...

This is one of the worst ideas to come out of the council ever.

Either invest the money wisely or cut or freeze council tax instead.
This is one of the worst ideas to come out of the council ever. Either invest the money wisely or cut or freeze council tax instead. InkZ
  • Score: 3

2:20pm Mon 20 Jan 14

speedy231278 says...

£15M unallocated and they plead poverty any time anyone asks them to spend money on something that isn't a waste of time, or isn't run by their mates at S+D Leisure.....
£15M unallocated and they plead poverty any time anyone asks them to spend money on something that isn't a waste of time, or isn't run by their mates at S+D Leisure..... speedy231278
  • Score: 8

2:26pm Mon 20 Jan 14

Lord Spring says...

There is always Wonga. but this many have been more Wronga
There is always Wonga. but this many have been more Wronga Lord Spring
  • Score: -3

2:31pm Mon 20 Jan 14

arthur1948 says...

would you trust your money to these bunglers?
would you trust your money to these bunglers? arthur1948
  • Score: 2

4:03pm Mon 20 Jan 14

muscliffman says...

Bpl333 wrote:
if it a way to create a new income stream then why not look at it?
cuts are operating year on year as we all know....so what do we do, to stop more services being cut?
You ask "what do we do, to stop more services being cut?".

For a start we/they could review some of the senior fat cat Officer wages and pensions deals. Then they should stop making ridiculous mistakes with our money like pouring over £3million pointlessly into the sea at Boscombe, or £10million buying a perfectly good newish seafront building (all be it in need of a bit of a makeover) and ripping it down to create a cross between a building site and a hole, or spending £thousands turning a perfectly good roundabout (Richmond Hill) into a dangerous traffic jam and £80,000 on a tacky sign and ....................
.need I go on?
[quote][p][bold]Bpl333[/bold] wrote: if it a way to create a new income stream then why not look at it? cuts are operating year on year as we all know....so what do we do, to stop more services being cut?[/p][/quote]You ask "what do we do, to stop more services being cut?". For a start we/they could review some of the senior fat cat Officer wages and pensions deals. Then they should stop making ridiculous mistakes with our money like pouring over £3million pointlessly into the sea at Boscombe, or £10million buying a perfectly good newish seafront building (all be it in need of a bit of a makeover) and ripping it down to create a cross between a building site and a hole, or spending £thousands turning a perfectly good roundabout (Richmond Hill) into a dangerous traffic jam and £80,000 on a tacky sign and .................... .need I go on? muscliffman
  • Score: 11

4:25pm Mon 20 Jan 14

Townee says...

If banks turns you down for a loan or mortgage then there must be a reason. So why would our council bank offer this type of thing to them. The government is offering mortgages to buy so why do we need a council bank to so the same?
This money is ours not there's and as such we should have a say where it goes not un qualified people who have squandered millions of our money over the years with no return.
If banks turns you down for a loan or mortgage then there must be a reason. So why would our council bank offer this type of thing to them. The government is offering mortgages to buy so why do we need a council bank to so the same? This money is ours not there's and as such we should have a say where it goes not un qualified people who have squandered millions of our money over the years with no return. Townee
  • Score: 7

4:50pm Mon 20 Jan 14

Gordon Cann says...

The first basic question is whether this proposal was included in the Conservative manifesto at the Council elections in May 2011 -quite simply have the people of Bournemouth been previously consulted on this use of their money ?- and with due respect to all your contributors it is all very well letting off steam here . but ward Councillors should be individually pressed for an answer to that basic question; when that basic question has been answered perhaps we can be told who will be advising the Council on the applications that are made
The first basic question is whether this proposal was included in the Conservative manifesto at the Council elections in May 2011 -quite simply have the people of Bournemouth been previously consulted on this use of their money ?- and with due respect to all your contributors it is all very well letting off steam here . but ward Councillors should be individually pressed for an answer to that basic question; when that basic question has been answered perhaps we can be told who will be advising the Council on the applications that are made Gordon Cann
  • Score: 7

5:45pm Mon 20 Jan 14

politicaltrainspotter says...

''Hello, I'm Nick Behunin's from ARS who done your Surf Reef in Boscombe and i would like a loan.''

Clerk ''How Much ?''

Nick. ''Anything really.''

Clerk ' Your application has been succesful.Here's the money.Now enjoy Malibu'.
''Hello, I'm Nick Behunin's from ARS who done your Surf Reef in Boscombe and i would like a loan.'' Clerk ''How Much ?'' Nick. ''Anything really.'' Clerk ' Your application has been succesful.Here's the money.Now enjoy Malibu'. politicaltrainspotter
  • Score: 6

6:14pm Mon 20 Jan 14

Phixer says...

Bpl333 wrote:
if it a way to create a new income stream then why not look at it?
cuts are operating year on year as we all know....so what do we do, to stop more services being cut?
Perhaps some of those 'services' are nothing more than jobs for the boys. I do not expect the tax from my pension income to be gambled on playing at bankers. Maybe you have a short memory for what happened with our money in Iceland not many moons ago??

I have a contract with BBC to clean the streets and empty the bins; they do not have a mandate to compete with commercial organisations - and they don't have the qualified, experienced staff to do so.

If BBC hadn't employed non-jobsworths or filled sandbags with £3million of our tax money, there wouldn't be a need for any 'cuts'.
[quote][p][bold]Bpl333[/bold] wrote: if it a way to create a new income stream then why not look at it? cuts are operating year on year as we all know....so what do we do, to stop more services being cut?[/p][/quote]Perhaps some of those 'services' are nothing more than jobs for the boys. I do not expect the tax from my pension income to be gambled on playing at bankers. Maybe you have a short memory for what happened with our money in Iceland not many moons ago?? I have a contract with BBC to clean the streets and empty the bins; they do not have a mandate to compete with commercial organisations - and they don't have the qualified, experienced staff to do so. If BBC hadn't employed non-jobsworths or filled sandbags with £3million of our tax money, there wouldn't be a need for any 'cuts'. Phixer
  • Score: 2

6:17pm Mon 20 Jan 14

Phixer says...

fedupwithjobsworths wrote:
The ‘bank’ will use £15 million of the council’s unallocated capital reserves and it is intended to help locals turned down for loans and mortgages by the main banks, while bringing in an estimated £8 million annual return,,,????!!!

£8 million annual return on £15 million outlay ..... cloud cuckoo land I suspect, unless they actually mean they will get back £8 million of the £15 million investment. Mind you I always thought the Council was a useless bunch of Bankers
What I'm reading is £8 million over a decade - but what happens with bad debts?

Don't tell me - let me guess. The local taxpayers fill the coffers!
[quote][p][bold]fedupwithjobsworths[/bold] wrote: The ‘bank’ will use £15 million of the council’s unallocated capital reserves and it is intended to help locals turned down for loans and mortgages by the main banks, while bringing in an estimated £8 million annual return,,,????!!! £8 million annual return on £15 million outlay ..... cloud cuckoo land I suspect, unless they actually mean they will get back £8 million of the £15 million investment. Mind you I always thought the Council was a useless bunch of Bankers[/p][/quote]What I'm reading is £8 million over a decade - but what happens with bad debts? Don't tell me - let me guess. The local taxpayers fill the coffers! Phixer
  • Score: 2

7:27pm Mon 20 Jan 14

ShuttleX says...

Despite being told by at least two very senior members of the Cabinet that this is a bad idea, Mr Beesley wants it to happen, so it is being forced through regardless. One member of the Council who refused to go along with it, is still on forced "sick leave" and will no doubt lose their position before much longer. As the Echo always seems to remove my posts if I mention names, I won't bother, but I hope Mr Beesely realises that person is not the only one who is getting sick and tired of the dictator style Mr Beesely has adopted. You are NOT always right, not matter what you tell yourself. Already you have forgotten what happened to Mr Charon ( which you helped organise) and you feel it can't happen to you. Trust me, it can. You gamble with OUR money, knowing full well that if things fail, your can put a spin on things, with your friends in the Echo, and walk away from it all. After all, it's not your money you are losing is it? The person who will be running the scheme may have some experience in global banking, but I ask myself why she has never managed to stick to one job? If she was that good, the other banks would have kept her, instead of letting her go without an attempt to keep her. But as she agrees with everything you say, I suppose it is obvious why she got the job. This is all going to end in tears, but you really don't care do you Mr Beesely?
Despite being told by at least two very senior members of the Cabinet that this is a bad idea, Mr Beesley wants it to happen, so it is being forced through regardless. One member of the Council who refused to go along with it, is still on forced "sick leave" and will no doubt lose their position before much longer. As the Echo always seems to remove my posts if I mention names, I won't bother, but I hope Mr Beesely realises that person is not the only one who is getting sick and tired of the dictator style Mr Beesely has adopted. You are NOT always right, not matter what you tell yourself. Already you have forgotten what happened to Mr Charon ( which you helped organise) and you feel it can't happen to you. Trust me, it can. You gamble with OUR money, knowing full well that if things fail, your can put a spin on things, with your friends in the Echo, and walk away from it all. After all, it's not your money you are losing is it? The person who will be running the scheme may have some experience in global banking, but I ask myself why she has never managed to stick to one job? If she was that good, the other banks would have kept her, instead of letting her go without an attempt to keep her. But as she agrees with everything you say, I suppose it is obvious why she got the job. This is all going to end in tears, but you really don't care do you Mr Beesely? ShuttleX
  • Score: 8

8:52pm Mon 20 Jan 14

Rabbitman64 says...

Looks like another Beesley mess-up.
Looks like another Beesley mess-up. Rabbitman64
  • Score: 2

9:46pm Mon 20 Jan 14

matt68 says...

I thought the council was full of bankers already!
I thought the council was full of bankers already! matt68
  • Score: 1

10:53pm Mon 20 Jan 14

Yankee1 says...

It is my understanding that Dorset Trading Standards does not allow public funds held by a local authority to be invested or otherwise used in a way that may endanger those funds. Offering loans is a risky business; some pay off, some fail. With Bournemouth Council's record of dealing with public moneys - the Surf Reef is an example - it seems unwise to allow it to play banker with funds that are there to be used for the benefit of all citizens.

Just how does the Bournemouth Bank plan to guarantee these moneys from possible loss?
It is my understanding that Dorset Trading Standards does not allow public funds held by a local authority to be invested or otherwise used in a way that may endanger those funds. Offering loans is a risky business; some pay off, some fail. With Bournemouth Council's record of dealing with public moneys - the Surf Reef is an example - it seems unwise to allow it to play banker with funds that are there to be used for the benefit of all citizens. Just how does the Bournemouth Bank plan to guarantee these moneys from possible loss? Yankee1
  • Score: 2

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