Town hall chiefs have approved a major loan deal between the council and a housing provider.
The Warrington Borough union council cabinet approved plans to enter into two loan facilities with Auxesia Homes Ltd (AHL) at its meeting on Monday.
It will see the board enter into a three-year £ 30million term loan facility and a two-and-a-half-year £ 7.5million revolving credit facility with the housing provider.
Council Chief Cllr Russ Bowden said “these loans are not something new” and loan arrangements are in place for the provision of housing in Warrington and the wider sub-region.
He added: “There have been no defaults on any of these loan facilities.”
Cllr Bowden also told members he was “absolutely supportive” of the decision and believed it was entering an area of the market that needed attention and met significant local demand.
In her report, Deputy Head of Council Cllr Cathy Mitchell said: “Funds are sought on a fully secured basis to purchase new affordable homes to be built to make them available for rent, sale or purchase. rental.
“The primary and targeted user groups of AHL are the NHS, emergency services and armed services veterans. ”
However, ahead of the meeting, serious concerns were raised by the city’s conservatives, the opposition group in the council.
Cllr Ken Critchley said: “Have any lessons been learned from the council’s Together Energy investment? One has to wonder why normal private business lenders do not provide these loans.
“To put the magnitude of the loans on offer in context, they amount to over 25 percent of the board’s total usable reserves. This is a unique and meaningful transaction.
“It is simply untenable that the firm can make this kind of investment decision without the scrutiny of other board members.
“The current decision-making process carries enormous risks of optimistic bias. Investments need to be reviewed in an open and transparent manner, not just cabinet approval.
“The municipality is already strongly exposed via loans to housing associations in this segment of the market. An investment portfolio should be well diversified.
“These proposed loans do not appear to diversify the council’s portfolio.”