A COUNCIL leader has denied claims that his local authority has "bailed out" a housing association with a £35m loan it lent, five years ago.

In 2014, Hambleton District Council agreed to loan the multi-million pound figure to the Broadacres Housing Association, which was set up in 1993 as a way to take on Hambleton District Council's stock housing.

The loan was then secured on remaining housing stock owned by the housing group with commercial interest rates that the council claim is "cheaper" than high street banks.

However, the council was recently accused of "bailing out" the housing association from what were alleged "financial difficulties", with the payment of the £35m loan. The council also came under fire for "jeopardising" public money.

But defending the loan, council leader Cllr Mark Robson said checks on the housing association before the loan was paid, revealed Broadacres Housing Association was in a sound financial position, and could meet the interest obligations of the money.

Cllr Robson also refuted claims that public funds had been put at risk, and said the loan had not been a mechanism to "bail out" the group.

He also claimed that the financial transaction benefitted both parties, with money from interest going back into the area, not high street banks.

Cllr Robson said: "This loan was not ‘bailing out’ Broadacres from financial difficulties as suggested – it is simply a transaction that benefits both organisations.

“In the last financial year Hambleton District Council received £1.2m in interest payments which is supporting our residents and front line services and far better in our hands than in the hands of a bank.

"There has been a good deal of misinformation in the press about this loan – it has been inaccurate, misleading and politically motivated.

"Prior to the loan being offered a great deal of due diligence was undertaken for the council by independent auditors and financial advisors which concluded that Broadacres was able to meet its repayment obligations.

"At no time have public funds been at risk – the council has instead benefitted from being able to offer this service rather than see the loan come from a high street bank.”