It is important to note that while we will not remain quiet on what is taking place in Bridgwater, we are apolitical, so we will not take any sides on any topic. With this in mind, we feel that it is important that we publish this response from Sedgemoor District Council regarding our previous article.

Sedgemoor District Council have told us,

“Sedgemoor District Council is in a sound financial position and should not be confused with the financial situation of Somerset County Council.  Sedgemoor has general reserves of £6.3m.  The Council’s financial strategy is to become more commercial to generate income in order to maintain services.  As with any organisation, SDC has to produce a balanced budget each year as is always looking for ways to improve its services whilst cutting costs.   Generating more income is a sound business model, which councils across the country are now using.

“One of the ways in which SDC can generate money is by lending money for projects that have benefits to the regeneration of the area and the wider community.

“All monies lent have legal and financial ‘due diligence’ tests – this means through financial and legal background checks and detailed investigations prior to signing a loan agreement.   The aim of due diligence is to identify any potential problems or unexpected liabilities.”

Mercure Hotel

In regards to the Mercure Hotel loan, they have said,

“This is a loan that Sedgemoor District Council has agreed to provide at commercial rates.  Another was Wembdon Village Hall committee, which helped them to finish off the building of the new hall/venue at Wembon .

“The Mecure Hotel is a flagship regeneration project for the vitality and viability of the town centre and is the largest investment into the town centre in recent years. This importance is reflected in a loan from the Local Enterprise Partnership totalling £4.5 million.  Market information suggests that, once opened, the site would be worth well in excess of any loan amount.

“The site had been in a derelict state for many years and its development is already seeing positive knock-on economic and regeneration effects and will offer employment to over 50 people.  There is potential for significant positive economic benefits for the wider town centre and it will be the only four star hotel in Bridgwater.

“As far back as 2007, The Bridgwater Vision identified that hotel provision in the town needs to be improved, including both hotel chains and independent quality hotels.  This is one of the first steps in that provision.

“The hotel will provide 119 bedrooms, as a result of approved changes to the original planning permission which was for 80 bedrooms.

“Whilst the hotel is nearly complete, the scheme met a number of challenges in the construction phase, which had a knock-on effect on costs and the planned opening date.  These included a large amount of concealed asbestos fibre, oil and paint contamination within the ground, restrictions on construction methods due to neighbour boundary issues, ancient human remains located under the building and most recently, difficulties in getting the compliant external cladding material due to increased demand because of Grenfell Tower.

“Councillors debated what would happen if the loan were not to be made and decided that as well as generating income, the Council would not want to see any more delays in the opening of the hotel nor not see it open in the very near future.

“A commercial loan is money lent to an organisation with a payback period and like any other loan from any organisation has interest payable upon the loan.  The council will get the original sum back over the payback period, plus the interest, hence the income generation.

“Like in any domestic loan or mortgage, the Council secures any loan against the property, so that if the money is not paid back, the council has security.

“Any decision to make a loan goes through the due diligence tests, before being debated by Full Council.  Within the due diligence tests is confidential and commercially sensitive information about the organisation asking for the loan, so that is why details are not make public.   The councillors then debate the pros and cons of providing a loan and come to a democratic decision.

“If a decision to go ahead with a loan is made and the documentation finalised, a legal charge will be registered at the land registry and available to the public to see.”

Changes Are Needed

While this does answer some questions regarding the loan, I suspect that many people are still suspicious of the way in which this was done. With such large amounts of money in question, Sedgemoor District Council should learn some lessons from this, and be more transparent.

We accept that due to the number of cuts to councils, there needs to be a change to how things are done and, whilst this will bring in money through the interest repayments, there are other things that need to be looked at.

One way in which many people could benefit in Bridgwater, is to supplement the public transport system both in, out and within the town. I will look at this in more detail in a separate article, as this is a big problem for many people.


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