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Issue

Issue - meetings

Hampshire Community Bank Project Update

Meeting: 15/09/2020 - Cabinet (Item 4.)

4. Hampshire Community Bank - Treasury Loan pdf icon PDF 1 MB

The purpose of the report by the Deputy Director of Finance and Resources (Deputy Section 151 Officer) is to:

 

·         update Cabinet on progress for the Hampshire Community Bank (HCB) project, and approve a £10 million lending facility, subject to certain conditions, in accordance with the Council's approved Treasury Management Policy 2020/21.  Previous reports and updates from HCB are listed in Appendix 1.

 

·         provide the Council with a vehicle to stimulate the local economy and support the recovery from Covid-19.  It will enable some of the strongest SMEs to sustain and grow their business, supporting employment and prosperity in the area.

 

·         To help facilitate HCB through the final stages of the Bank Authorisation process, which, upon approval, will:

 

-       Enable the Bank to pursue its objectives to support and grow SMEs (the "backbone" of the UK economy), thus protecting and creating new local jobs for residents and, via the HCB Foundation, distributing grants to local charities 

 

-       Protect the Council's £5m investment and as a consequence of authorisation, increasing the value of the Bank to circa £5m to £7m.

 

 

RECOMMENDED

 

(1)  That Cabinet note the progress of Hampshire Community Bank (HCB) towards Bank Authorisation contained within this report.

 

(2)  That Cabinet approves a £10m lending facility between Portsmouth City Council (PCC) and Hampshire Community Bank (HCB) to enable Small and Medium Size Enterprises (SMEs) with the highest credit quality that operate within the greater Portsmouth and Hampshire area to access loans to support and grow their business 

 

(3)  That the £10m lending facility is subject to:

 

i)             A first tranche of £5m to be provided subject to satisfactory legal documentation being put in place that meets the requirements of the Council's approved Treasury Management Policy 2020/21.

 

ii)            A second tranche of up to £5m to be provided after a 6 month period and subject to the Deputy Director of Finance (Deputy Section 151 Officer) being satisfied that the performance of the HCB Loan Book is strong and within the delinquency limits set out in the authorised HCB Regulatory Business Plan.

 

(4)  That delegated authority be given to the City Solicitor and Deputy Director of Finance (Deputy Section 151 Officer) to conclude all the necessary legal documentation for the lending facility.

 

Decision:

1.    That Cabinet note the progress of Hampshire Community Bank (HCB) towards Bank Authorisation contained within this report.

2.    That Cabinet approves a £10m lending facility between Portsmouth City Council (PCC) and Hampshire Community Bank (HCB) to enable Small and Medium Size Enterprises (SMEs) with the highest credit quality that operate within the greater Portsmouth and Hampshire area to access loans to support and grow their business  

3.    That the £10m lending facility is subject to: 

i)       A first tranche of £5m to be provided subject to satisfactory legal documentation being put in place that meets the requirements of the Council's approved Treasury Management Policy 2020/21. 

ii)     A second tranche of up to £5m to be provided after a 6 month period and subject to the Deputy Director of Finance (Deputy Section 151 Officer) being satisfied that the performance of the HCB Loan Book is strong and within the delinquency limits set out in the authorised HCB Regulatory Business Plan.

4.    That delegated authority be given to the City Solicitor and Deputy Director of Finance (Deputy Section 151 Officer) to conclude all the necessary legal documentation for the lending facility.

5.    That Portsmouth City Council requests that the HCB submits a progress report every six months to the Governance & Audit & Standards Committee.