The decision to stop Isle of Wight Council funding of a tidal energy scheme off the Island coastline has been ratified.
The council’s corporate scrutiny committee voted yesterday (Monday) to back the cabinet’s decision to extend the term of its £1 million loan but not invest a further £244,000 in a loan to Perpetuus Tidal Energy Centre (PTEC). But members were warned the decision could jeopardise the council’s chances of seeing its original £1 million back.
Isle of Wight Council leader, Councillor Dave Stewart, said had there not been the current pandemic situation, the council would have likely invested the additional money, like other shareholders have done, as it was a means of creating Island jobs. He said:
“Although it would be possible for the council to invest further, I do not believe this would be the appropriate use of public funds.
“As it stands, if no investment is made the project is likely to fail and the original £1 million investment lost. With the council taking these actions there is a chance of success and the aspirations achieved.
“The additional conditions are necessary for PTEC to secure the funds for the next stage.”
At its meeting earlier this month, the scrutiny committee agreed with recommendations to the cabinet that the £244,000 loan not be granted, due to the state of the council’s finances, and that up to two-thirds of the councils 15 per cent shares in PTEC be sold to raise the money.
When the decision came to cabinet a few days later, a new condition was added that would extend the original £1 million loan terms — given to PTEC in 2013— by 5 years, remove the Isle of Wight Council from its board and take away the priority status the council held to have its loan paid back first, all in an effort to potentially attract other investors.
The decision was supported unanimously by cabinet but raised questions from members of the scrutiny committee who felt they would not have supported the decision if the changes had been proposed earlier.
Cllrs Michael Lilley, Debbie Andre and Andrew Garratt brought the decision back to corporate scrutiny where, ultimately, the same decision was made. Cllr Andre has said the burden of responsibility seems to fall on the Isle of Wight Council as a shareholder:
“There is almost a feeling we are being pressured into action because if we don’t, we risk the company going under.”
With the council’s original loan term set to end in May 2022, chief executive, John Metcalfe said the loan needed to be extended anyway. He said:
“The view of the cabinet was to support the company in another way. PTEC suggested to us it could work with the proposals but would require further commitments.
Councillors voted in favour of the extension to the loan terms and the other associated conditions 5 (Cllrs Chris Quick, Vanessa Churchman, Stephen Hendry, John Hobart and Julie Jones-Evans) to 2 (Cllrs Debbie Andre and Michael Lilley).
The decision will now go back to the council’s cabinet who will meet today (Tuesday).
Yet happily allow drilling for oil.
This council bang on about the green issue and it’s vision and commitment to being an energy efficient island. Why is it that it that it pushes ahead with schemes that aren’t connected to cllr stewarts big green dream but things like tidal and wind energy are thwarted.For someone that’s ‘committed’ to it, he’s very reluctant, or is there another brown envelope from someone else who didn’t want it to go ahead??
The IW Council does not have enough funds for essential services so should not have invested £1,000,000 in the first place and definitely should not use more rate-payers money to continuing investing however good a scheme they believe it is. They are not Investment Bankers and the money should be spent on providing essential services to island residents where services have been cut due to no funding.
Every time our council tax is reviewed and raised (never decreased) it is because more money has to be found for local services.
Should stick to running essential services and leave commercial ventures to those with the nouse to do it.
Suggest they do all they can to get the £1,000,000 plus interest back.