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West Norfolk Council agrees repayment plan with NWES for outstanding KLIC loans

A plan to repay West Norfolk Council an outstanding debt of more than £1.1million associated with King's Lynn Innovation Centre (KLIC) has been agreed.

The building in South Lynn, which provides office space for businesses, cost £6m to construct in 2016.

KLIC was a joint project between the council and private company Norfolk and Waveney Enterprise Services (NWES).

KLIC centre in Lynn. (7806938)
KLIC centre in Lynn. (7806938)

The council loaned NWES £2.75m but repayments defaulted in late 2018. The council said this week that the current sum owing is £1,167,299, subject to final negotiations.

Following a discussion in private at Tuesday's cabinet meeting, council leader Cllr Brian Long said: “We have been working with NWES over the past months to agree a repayment plan for the outstanding debt relating to loans made to enable the building of the King’s Lynn Innovation Centre.

“We can confirm that NWES already began making monthly payments prior to completing a formal settlement agreement.

"Now that the repayment plan has been agreed by cabinet, we can formalise the arrangement on commercial terms with NWES to provide for the full repayment of the debt owed by NWES.”

West Norfolk Council leader Brian Long. Photo courtesy of West Norfolk Council (42363691)
West Norfolk Council leader Brian Long. Photo courtesy of West Norfolk Council (42363691)

a council spokesperson aid: "The council has agreed a five-and-a-half year payment plan which provides a manageable cash flow position for NWES and increases the likelihood of the council recouping all the money it is owed plus interest.

"Should NWES wish to repay early, there are provisions within the plan for this to happen.

"We will continue to work with NWES throughout the repayment plan period."

A report to the council's audit committee by a cross-party working group last March said the KLIC project was "innovative" and a departure from the council’s normal working practices.

It went on: "The partner in this project, Norfolk and Waveney Enterprise Services Ltd, and its wholly owned subsidiary NWES Property Services Ltd (NWES), unfortunately encountered cash flow difficulties resulting in it defaulting on its loan repayments, which culminated in the council taking ownership of the innovation centre.

"This was the most appropriate course of action for the council to take to protect its investment in the project."

The King's Lynn Innovation Centre on Nar Ouse Way.. (34663015)
The King's Lynn Innovation Centre on Nar Ouse Way.. (34663015)

NWES had experience in managing such centres but not in building them and it was unclear why it had been given responsibility for delivering the build, the report added.

"Whilst the project appeared to be a good concept there was a lack of due diligence.

"There was a degree of naïvety demonstrated by both officers, who had no experience of partnership working on a high-profile project, and elected members, nearly 40 per cent of whom were newly elected when the project was in its infancy."

The council said this week: "The centre, which transferred to council ownership in June 2019, is nearly at full capacity and working effectively."

An arrangement for NWES to continue managing the building ceased this summer and the council now does that.

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