TOWN Hall chiefs have approved a major loan agreement between the council and a housing provider.

Labour-run Warrington Borough Council’s cabinet approved plans for the council to enter into two loan facilities with Auxesia Homes Ltd (AHL) at its meeting on Monday.

It will see the council enter into a £30 million, three-year term loan facility and a £7.5 million, two and a half year revolving credit facility with the housing provider.

Council leader Cllr Russ Bowden said ‘these loans aren’t something new’ and that loan arrangements are in place for the provision of homes in Warrington and the wider sub-region.

He added: “There’s been no default on any of those loan facilities.”

Cllr Bowden also told members he was ‘absolutely in support’ of the move and that he thinks it is accessing an area of the market which needs attention and is meeting significant demand locally.

In her report, deputy council leader Cllr Cathy Mitchell said: “The funds are sought on a fully secured basis to purchase new build affordable homes to make available for rent, sale or lease.

“AHL’s primary and targeted user groups are NHS, emergency services and armed services veterans.”

However, ahead of the meeting, serious concerns were raised by the town’s Conservatives, the Opposition group on the council.

Cllr Ken Critchley said: “Have any lessons been learned from the council’s Together Energy investment? One has to ask why the normal providers of finance to private businesses are not providing these loans.

“To put the scale of the proposed loans in context they are equivalent to over 25 per cent of the total usable reserves of the council. This is a significant single proposed transaction.

“It’s simply untenable that the cabinet can make this sort of investment decision without scrutiny from other members of the council.

“The current decision-making process has huge risks of optimism bias. Investments need to be scrutinised in an open and transparent manner, not just approved by the cabinet.

“The council is already significantly exposed via loans to housing associations to this sector of the market. A portfolio of investments needs to be well diversified.

“These proposed loans do not appear to diversify the council’s portfolio.”