ONE of Somerset’s local authorities will earn more than £60,000 a year in interest as a result of its commercial loans to businesses and charities.

Sedgemoor District Council has loaned more than £3M to three different organisations to allow building projects in Bridgwater and Highbridge to go ahead or be completed.

The council has published details of how much interest it expects to earn from these loans on an annual basis, which it will use to fund future public services.

It has also defended its choice of investments, saying it will help to meet local housing needs and make Bridgwater town centre more attractive.

A report on the council’s commercial activities came before its executive committee in Bridgwater on Wednesday morning (March 6).

Alison Monteith, the council’s finance manager, said in her written report that it was common for the authority to lend money to local businesses or charities to “support local public services and stimulate local economic growth”.

“The interest received on these loans also contributes to the revenue funding of services.”

The council agreed in September 2018 to loan £500,000 to DC Hotels to allow for the completion of the Mercure Hotel in the Eastover area of Bridgwater.

The decision attracted criticism from Bridgwater residents, who branded the use of public money “absolutely disgusting” and “shameful”.

Ms Monteith said: “This [the hotel loan] is closely aligned with our policy to support the regeneration of Bridgwater town centre.

“Our Bridgwater Vision identifies that hotel provision in the town needs to be improved, including both hotel chains and independent quality hotels.

“This will bring in a net yield after costs of approximately £12,000 per annum.”

The council has also loaned £2.5m to the YMCA Dulverton Group (formerly YMCA Somerset Coast) to enable low-cost housing to be delivered on the former Highbridge Hotel site, which the charity has owned since 2014.

Ms Monteith added: “The delivery of specialist supported affordable housing has a direct link to our duties on housing and well-being, especially to the homeless and younger people.

“The provision of new homes and associated infrastructure also contributes directly to our growth and infrastructure priorities, as well as contributing to the housing delivery targets set out in the Local Plan.

“This will bring in a net yield after costs of approximately £50,000 per annum.”

The two loans together will bring in a combined annual income of £62,000.

A further loan of £355,000 was made to the Wembdon Village Hall committee to allow completion of its new hall, but the council has not specified how much annual interest it will earn on this.