Project loans get council in financial mess

Stotfold Town Council has carried out two major financial activities which extend beyond its powers as a council.
By Luke Gardener
Published 19th Oct 2014, 09:00 BST
Stotfold Town Council have performed actions beyond their remitStotfold Town Council have performed actions beyond their remit
Stotfold Town Council have performed actions beyond their remit

The errors are related to the Arlesey Road project and the relocation of the Football Club.

The council took out an additional loan of £70,000 to add to a £500,000 current loan from Central Beds Council for the project to relocate the club from its current Roker Park site to Arlesey Road.

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The two loans together were charged against Roker Park as a mortgage at the request of Central Beds Council, but since then the council has discovered it does not have the power to charge money against its own property.

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A Stotfold Town Council spokesperson said: “This was something that neither we or our solicitor were aware of, and Central Beds Council did not make us aware that we do not have the power to do this.

“However, in order to rectify the situation, the Clerk and Chairman have sought legal advice and discussed the problem further with Central Beds Council.”

The £70,000 has now been taken from the the council’s cemetery earmarked reserves to clear the £70,000 due to Central Beds Council. Income from its mobile mast fund and the council precept could help towards replacing the cemetery reserves council members were told.

The remaining £500,000 mortage, which now stands at around £466,000 has also been converted into a loan.