A NEW procedure for loans from Northumberland County Council to its development company has been described as a ‘milestone’.

Loans from the local authority are expected to total £275m by the end of this financial year, and with Arch set to be replaced by a new company, Advance Northumberland, new regulations are to be put in place.

A revised decision-making and governance procedure for future loans was approved by the council’s cabinet at its meeting on Tuesday, October 9.

The new process to be put in place includes the creation of an external loans board and has been described as a series of ‘high bars and clear criteria for the management of Arch, or Advance Northumberland as it will become’.

A number of core principles will apply under the new set-up, including the council not being willing to offer a loan facility over 100 per cent of the asset value to cover various fees or charges.

Not all loans will be interest-only moving forward, while interest rates may be floating rather than fixed where the rate risk is judged to be high.

Coun. Nick Oliver, cabinet member for corporate services, said there had previously been a ‘lack of any sort of proper process’.

Meanwhile, Arch chairman Coun. Richard Wearmouth described the new procedures as ‘a watershed moment’.