Issue - meetings

To consider a report by the Head of Resources on the transfer of a loan.

Provisionally agreed that the loan given to Huntingdonshire Regional College by Huntingdonshire District Council be transferred to Cambridge Regional College following formal merger.

Consideration was given to a report by the Head of Resources (a copy of which is appended in the Minute Book), which recommended that provisional agreement was given to the transfer of a loan from Huntingdonshire Regional College to Cambridge Regional College following the formal merger of the two educational establishments. Having received an assurance that the Council would maintain its security for the loan, Members stated that the original purpose of the loan remained, namely to improve the chances of local young people.

With regard to the comments of the Overview and Scrutiny Panel (Performance and Customers), confirmation was received that the terms of the loan were competitive compared with the commercial market and were governed by state aid regulation.

On the understanding that this matter would be submitted to the Cabinet for formal approval following the completion of the merger, due diligence and consultations with the external auditor, it was

RESOLVED

  that it be provisionally agreed that the loan given to Huntingdonshire Regional College by Huntingdonshire District Council be transferred to Cambridge Regional College following formal merger.

The Panel is to receive a report on the provisional agreement for the transfer of a loan.

With the aid of a report by the Head of Resources (a copy of which is appended in the Minute Book) the provisional agreement for the transfer of a loan, previously made to Huntingdonshire Regional College, to Cambridge Regional College as a consequence of the merger of the two colleges was presented to the Panel.

It was explained to Members that any merger would legally be a default on the loan to Huntingdonshire Regional College (HRC). As a part of the process Cambridge Regional College (CRC) has asked the Council if the loan could be transferred in the event of a merger.

A Member commented that they thought the Council are profiteering from further education as the loan was provided to HRC at a higher rate than was borrowed at. However it was explained that this had to be done due to State Aid Rules, otherwise the Council would be unable to provide the college with a loan.

In response to a query from a Member, it was confirmed that the legal charge on the college site at California Road, Huntingdon would remain.

The Panel agreed that Cabinet should give provisional agreement that the loan given to HRC be transferred to CRC following a formal merger.

(At 6.03pm, during the consideration of this item, Councillor S Greenall entered the meeting.)