Council earns £600,000 from business-boosting loan
Published on Thursday, May 31, 2018
A LOAN of £4m made from the city council’s Leicester City Investment Fund to a private developer has earned the council £600,000 in interest and helped to secure 250 jobs in the city.
The council made the loan to Infrastructure Investments Ltd in 2016. The money enabled the company to bring unoccupied space in St George’s Tower, Charles Street into use, providing much-needed office space for Hastings Insurance to expand its operation in the city.
The loan has now been repaid in full, and the council has earned £600,000 from the transaction.
The council is able to invest because it must keep money aside to pay off debt. It is usually uneconomic to repay debt straight away, so the council invests its cash, usually receiving minimal interest.
City Mayor, Sir Peter Soulsby said “I set up the Enterprising Leicester Fund in 2016 to encourage economic regeneration and job creation in the city. This is a way of supporting the city, while getting a better return on the council’s money than it would earn in the bank. This was a particularly significant loan and I am delighted with the result.”
James Boyle, Director of Infrastructure Investments said: “Leicester City Council has supported our efforts from the moment we acquired St George's. The speed at which the City Mayor and council moved to ensure the project happened and the additional jobs came to Leicester was something many banks and commercial organisations could only hope to emulate.
"Thanks to the success of this final phase of the St George’s regeneration project, we have been able to attract stable, long-term funding to secure the property’s economic future as a major source of employment, for decades to come.”
The Leicester City Investment Fund allows the council to invest up to £10 million to achieve better returns on its cash balances while at the same time supporting the local economy. The fund supports businesses and developers with infrastructure provision at key sites, and the acquisition or construction of property. Other proposals are also considered.
Mike Dalzell the council’s Director of Tourism, Culture and Inward Investment said: “The council is keen to work closely with local businesses and developers to help create jobs and bring investment into the city. The Leicester City Investment Fund is one of several ways we are doing this, and I encourage people to contact us if they have concrete proposals. “
More information about the fund is available at https://www.leicester.gov.uk/business/start-up-and-growth/invest-in-leicester/