Did council's £10 million Norse loan 'kill' Wensum Lodge? 🔍
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📰Today's Edition
- Norse loan
- Climate scorecard
- Honour's list
- Medical trial
- In Motion
- Magazine launch
- Where's Phil?
- Water works
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Shaun
Council backs £10m Norse loan
Norfolk County Council is to lend £10m to Norse Group to help transform its HR and IT systems.
The loan was recently approved by the ruling Cabinet and rubber-stamped at a full council meeting.
Norse Group is a wholly-owned subsidiary of County Hall largely comprising three main trading companies - Norse Commercial Services, Norse Consulting, and Norse Care.
What it means
Under the deal the council will lend the money from its 'capital programme' the money it uses to spend on things such as buildings and equipment - including previously Wensum Lodge.
A council cabinet paper noted that scrapping Wensum Lodge would 'offset' its capital budget by £5.5m allowing it to cover the cost of the loan as well as put an extra £3.4m towards the Great Yarmouth O&M Campus project to cover inflation - a sum which will be paid back through the Enterprise Zone business rates pool.
Greg Peck, deputy cabinet member for finance said at the time that the loan, which was agreed at market rates, would provide efficiencies which should increase dividend payments to the authority.
The council will also receive interest payments on the loan.
The counter view
But Green councillor Ben Price said the agreement effectively torpedoed any hopes that the council would continue to support the King Street venue after the authority said in July it wanted to focus on 'accessible community venues'.
He said while it made sense to invest in projects which can generate a return, more scrutiny was needed on how the savings are going to be made.
Meanwhile a new Friends of Wensum Lodge group, was working to find a new use for the site as a community hub.
"They have taken the money earmarked for Wensum Lodge and given it to Norse to upgrade its IT," he said. "They managed to kill any hope for the Wensum Lodge development being their responsibility."
Norse Group's most recent set of accounts filed at Companies House, show that in the year ending March 2022 the firm made a pre-tax loss of £12.7m while its cash reserves also fell from £23.5m to £17.5m - a result it said of the ongoing impacts of the Covid 19 pandemic and the loss of some key contracts.
The council's case
A spokesperson for Norfolk County Council said for historic reasons, each of the three main entities within the Norse Group have developed "different and incompatible Finance and HR solutions, resulting in complexity and limited opportunities for compatibility".
Savings would be made in a number of areas including administration, payroll and better data management.
“The new system will help manage overhead costs as the business continues to grow," the spokesperson said. "This growth will generate additional financial returns for the shareholder.”
