Brentwood plans £100m loans fund for regeneration

Brentwood Council is drawing up plans to lend up to £100million to developers in order to regenerate the borough.

In early proposals, the council has said the regeneration fund – financed with money borrowed at low interest rates from the Government or other local authorities – would have a limit of £100m.

Each loan would be set no at less than £1m and no greater than £20m for individual projects across Brentwood borough.

The council adds that once a project has been identified, a full assessment of the financial opportunity and due diligence will be undertaken.

The proposal follows Brentwood Council’s ‘Brentwood 2025’ corporate strategy, which has placed growing the town’s economy as a central plank of its ambition.

It adds that regeneration of housing and other sites in the borough is central to this ambition and it is now looking at how a dedicated regeneration fund might unlock development that otherwise might take longer to materialise.

The council has said it does not see its role in replacing the proper activity of mainstream lenders and investors in the market, but simply to act as a lender to local projects where regeneration would not take place without the council’s intervention.

It would do this by using its local authority to local authority or Public Works Loan Board borrowing capacity to “support local private sector regeneration activity through loans to support small and medium-sized enterprises that cannot, for whatever reason, obtain mainstream borrowing.”

Ian Winslet, Strategic Director (Housing and Regeneration) told the Policy, Resources and Economic Development Committee on February 2 there will be a return on the investment that the council makes but that the driver are the benefits as a social purpose vehicle.

He warned that if any return on an investment were the driver then it would be very difficult for the section 151 officer to sign it off.

He said: “We’ve been very cautious when asking our legal advisors on what this is.

“This is a social purpose vehicle. However, there is an income return based upon our investment and our risk.

“So I suppose you know it it covers both things.

“But the emphasis is important and the emphasis here and will always be that this has to be in-borough, it has to be for regeneration and that there has to be a tangible regenerational social purpose outcome.

“Otherwise it’s simply not going to be possible to to go through with it.”

Councillor Sarah Cloke (Lib Dem, Brentwood West) said she had concerns profits were driving the plans.

She said: “I do suspect that’s the underlying driver – not that making profits is a bad thing, we have to bridge our financial gap.

“But I do not like this misrepresentation and the continuous trying to sell forward the idea that we’re only doing this for the good of the people.

“I just think that we need to be really clear around the messaging around this.”

Leader of Brentwood Borough Council, Councillor Chris Hossack, said: “The overarching principle is this, when you have a dormant piece of scruffy land, whatever that might be – that might be a focus of anti-social behaviour, it might be a focus of perpetual enforcement and ultimately a drain on the council’s resources, that carries a cost.

“If through regeneration you can transform that land into something meaningful, whether it’s accommodation whether it’s a business premises whether it’s something that has a roof that generates a subsequent income through tax or business rates then that’s the bigger picture.

“Dead, non-regenerate areas earn nothing, they actually cost us money.

“By putting a mechanism in like this to actually look at regeneration that can not only improve the area first and foremost but has a subsequent effect on the income to the council through tax is a benefit.”

The committee voted for work to proceed to establish a ‘Brentwood Regeneration Fund’ to support commercial regeneration projects in the borough.

Advertisement

Piers Meyler

Local Democracy Reporter