West Norfolk Council 'seeking assurances' £2.75m loan used to fund King's Lynn Innovation Centre will be repaid
Council officials have said they are seeking assurances a £2.75m loan which financed the King's Lynn Innovation Centre (KLIC) will be repaid to them, after the business agency who borrowed the money is set to miss its deadline to repay it tonight (Friday, November 30).
Norfolk and Waveney Enterprise Services (NWES) borrowed the money from West Norfolk Council in 2014 to help with the costs of building the KLIC, which helps new businesses start up since it opened two years ago.
Council leader Brian Long said the authority was still in negotiation with Nwes over the situation, with one option being the KLIC being handed back to them.
Mr Long said: "The KLIC centre is and was created to be a business incubation unit, and it is fulfilling that function really well. The floorspace is 90 per cent occupied which is really positive.
"The businesses in it are thriving and growing. More people are being employed and businesses are growing as a result of operating from that space. That's what it was created for.
"The situation is that the loan that was made, actually from the LEP (Local Enterprise Partnership) through Suffolk County Council to the borough council is due to be repaid at midnight tonight (November 30).
"At this point in time we are in negotiation with them as to how that loan will be satisfied."
"We have got to repay the loan to Suffolk County Council so they can reply the New Anglia LEP," he added.
"We are seeking assurances from them that they can repay or we will consider our options."
Mr Long said the money being paid by the businesses in rent is itself a "good investment".
He added: "I'm not uncomfortable about the situation but I will be pleased when the debt is repaid."
A spokesman for NWES said: "The original partnership between West Norfolk Council and NWES was to step in where the market was failing, to create a building which would act as a catalyst for future development on the disused Nar Ouse site in King's Lynn – KLIC being the first building of an intended enterprise and innovation park.
"As a social enterprise, NWES was able to act as a conduit in this regard, also investing its own funds into the construction and subsequent successful running of KLIC, now a landmark building on the East-West corridor."
The spokesman said CEO Joanna Clarke has always been "very open with partners and stakeholders" about the "challenging situation" she came into when she was appointed earlier this year, but they have "worked hard to turn it around".
They said since KLIC opened in June 2016, it has supported 47 tenant companies employing over 100 people on the site and as part of the business support services delivered by NWES from KLIC, 54 new businesses have been created generating over 80 new net jobs.
The spokesman added that when Ms Clarke came into post as the CEO in March 2018, she was made aware that West Norfolk Council had made a substantial loan to NWES to support the construction of KLIC in 2014, which was due to be repaid at the end of November.
Ms Clarke has been in dialogue with the authority to agree "how best this repayment might be managed".
Ms Clarke said: "NWES fully accepts that West Norfolk Council's primary concern must be the protection of taxpayers’ funds first and foremost and this reflects our own stance.
"We’re committed to identifying a workable solution for both parties and have submitted proposals to West Norfolk Council to ensure this happens."
She said they hope to ensure a Memorandum of Understanding is swiftly put in place.
"In the meantime, NWES continues to do the very best for the businesses we serve and our stakeholders across the Norfolk area," she added.