Mystery million £ loan still there -- and apparently for longer

Do you remember way back in February, the case of the mysterious million pound loan?

It was taken out by Boston Borough Council at an eye-watering eleven and a quarter per-cent for a period of fifty - yes fifty - years and amazingly no one recollected why, and no paperwork apparently exists.A joint committee meeting was told that "an educated guess" was that a loan of that size may have something to do with the then-housing stock.The transaction pre-dated every officer and elected member of the council, and the meeting heard from Councillor Richard Leggott who said he had contacted previous members of the borough, but without any luck.

When it was suggested it be paid off early, the meeting was told that this had been considered in the past, but the borough had been quoted a figure in the region of £4 million to do so.
At that point an officer was trying to get hold of a copy of the loan agreement – without the State Street, the company concerned, realising that the borough didn't have the paperwork.

Now the loan is back on the agenda - but only as one figure among many.

It appears in a report to tomorrow's Overview and Scrutiny Policy and Projects Committee on investment and borrowings.

Although to add to the mystery, it appears to have 42 years still to run, rather than the 32 that we would have expected.

It's now almost five months since the loan came under the spotlight, but nothing seems to have been done to discover why it was taken out, as was promised back in February.

We think that someone needs to ask a question or two at tomorrow's meeting.We also note that the meeting is being asked to recommend the Cabinet to approve the extension of the Council’s existing overdraft facility with HSBC, up to £750,000, without which the Council risks incurring charges for unauthorised borrowings.
Maybe the deputy leader wasn't kidding when he declared that the council was on the verge of bankruptcy!

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