University debt to be written off

A council plans to write off an £8.16m debt owed by the University of Lincoln.

The group responsible for raising funds for the university borrowed £4.4m from the county council 12 years ago.

The council has confirmed its executive has approved plans to wipe out the debt and interest accrued, but said talks between the two parties were ongoing.

County councillor Mark Horn said taxpayers were losing out on the deal, adding most of them would "prefer to have that money in their own pocket".

The county council said the proposal is the best possible outcome.

'Modest investment'

Councillor Horn said: "They [taxpayers] are losing £8.2m effectively which is the equivalent of a 4% increase in council tax.

"At this point in time I think people would prefer to have that money in their own pocket than it simply being written off and going into the ether."

Pete Moore, director of resources at the authority, said the university brings £100m to the local economy each year.

He said the council would acquire a piece of university land and some rental income as a result of the move.

"Over the years it became apparent to us that the project company wouldn't have sufficient resources in the longer term to repay some of those loans.

"What we're proposing to do - which was agreed by the executive two years ago - is to write off the outstanding loan and developer contribution and that the remaining assets of the project company would transfer to the county council.

"The council has invested about £17m in the university project but the university has brought over £100m a year into the local economy... so for a relatively modest investment, we've got a huge payback."