Issue - items at meetings - Subordinated Loan for East Sussex Credit Union

Report of the Assistant Chief Executive (copy attached).

1)            Approves that Brighton & Hove City Council becomes a Corporate Member of ESCU by depositing a one off sum of £28,000 which can be withdrawn at any time and that the ESCU Corporate Membership scheme be added to the capital programme.

2)            Delegates authority to the Assistant Chief Executive and Executive Director Finances & Resources to act as Brighton & Hove City Council’s Designated Representative in accordance with ESCU's Corporate Accounts Membership Policy.

3)            Approves a subordinated interest free loan of £250,000 to ESCU for the purposes and on the terms set out in paragraphs 3.9 with an expectation of performance against set outcomes and targets with yearly reporting on key performance indicators as set out in Appendix 1. The loan will be added to the capital programme.

4)            Notes that the council will seek to develop closer working practices with the credit union in relation to Housing, Revenues and Benefits, and Children Services.

105.1    The Committee considered a report of the Assistant Chief Executive in relation to East Sussex Credit Union Subordinated Loan & Corporate Membership. The purpose of the report was to seek approval for the Council to financially support the work and principles of the East Sussex Credit Union (ESCU) by becoming a corporate member of ESCU and providing a subordinated loan.

105.2    Councillor Mitchell welcomed the report and drew the Committee’s attention to paragraph 3.2 as evidence of the clear justification for this course of action; she added that this was the right thing for the Council to be doing.

105.3    Councillor Daniel also welcomed the report and highlighted the difference ESCU could make to low income families, and prevent the use of ‘high street loan’ shops; she added it was important that the local authority do everything within its power to help support the work of the credit union.

105.4    Councillor Mac Cafferty welcomed the report, and noted that it built on the financial inclusion work that had taken place under the previous Green Administration. In response to specific questions the Assistant Chief Executive explained that one of the purposes of the loan was to use it as match funding for other grants and assistance from Central Government. The Council would also be able to revisit the terms of the loan after three years to see if extending it was in the interests of the parties involved.

105.5    In response to specific questions from Councillor Wealls it was agreed that Officers would provide responses following the meeting.

105.6    Councillor G. Theobald noted he was highly supportive of this work.

105.7    In response to Councillor Janio the Assistant Chief Executive explained that, whilst the Council would not want to enter into the financial management of the credit union, the loan would create regular dialogue and closer working.

105.8    The Chair then put the recommendations to the vote:

105.9    RESOLVED – That the Committee:

1)     Approves that Brighton & Hove City Council becomes a Corporate Member of ESCU by depositing a one off sum of £28,000 which can be withdrawn at any time and that the ESCU Corporate Membership scheme be added to the capital programme.

2)     Delegates authority to the Assistant Chief Executive and Executive Director Finances & Resources to act as Brighton & Hove City Council’s Designated Representative in accordance with ESCU's Corporate Accounts Membership Policy.

3)     Approves a subordinated interest free loan of £250,000 to ESCU for the purposes and on the terms set out in paragraphs 3.9 with an expectation of performance against set outcomes and targets with yearly reporting on key performance indicators as set out in Appendix 1. The loan will be added to the capital programme.

4)     Notes that the council will seek to develop closer working practices with the credit union in relation to Housing, Revenues and Benefits, and Children Services.