Borrowing option in works for BCP Council £50m funding gap

The local authority is waiting to learn if central Government will give the green light to a capitalisation direction.

BCP Council chiefs were due to present papers on the beach hut special purpose vehicle (SPV) to an overview and scrutiny committee on Wednesday, July 20.

The SPV would involve selling thousands of the council-owned beach huts to a majority or wholly council owned company.

After a delay in publishing the reports on the agenda, council leader Cllr Drew Mellor confirmed on Friday that he had agreed, following discussions with committee chair Cllr Lawrence Williams, to remove the paper and come back at a later date.

• Read more: Controversial beach hut sell-off meeting is OFF

BCP Council leader Cllr Drew Mellor (Image: BCP Council)

Cllr Mellor told the Daily Echo that talks with Government in recent months had led to the possibility of the alternative borrowing option to plug the circa £50million transformation programme funding gap.

These conversations were progressing well with Michael Gove MP, Cllr Mellor said, however, when he was sacked as Secretary of State for the Department for Levelling Up, Housing & Communities, there was a pause.

They have now been picked up with his replacement as minister, Greg Clark MP.

Council leaders are expecting to hear back from Mr Clark on the details and if he will sign off the borrowing option before the autumn.

• Read more: Beach hut plan key to BCP Council's budget proposal

Cllr Mellor said it has already been confirmed that the beach hut SPV would be within the rules of the flexible use of capital receipts regulations.

“I have been asked to provide contributions to a discussion at the minister level about the future funding of local government because they are impressed with what we are doing with council tax freezes and massive investment in services,” Cllr Mellor said.

“I have asked for more flexibility to fund transformation more generally.

“They are allowing us to be an exemplar of local government reorganisation as a success story.

“The new option is allowing us to borrow for transformation.”

Greg Clark MP. Picture: PA

Cllr Mellor said the borrowing would be through the public working loans board and he had requested this to be paid back over a 50-year period but a much shorter timeframe would still be achievable, he said.

He said once complete, the transformation programme at BCP Council will deliver £50million of savings every year.

On the decision late last week to remove the item from this week’s scrutiny meeting, Cllr Mellor said: “I really wanted to get something out in the public domain but the chair of the overview and scrutiny committee has said come back when it is ready.

“We want to do it properly and go present it to the overview and scrutiny committee.”