Purpose

CELF was setup and has been in operation since 2007. CELF activity operates under a special purpose vehicle (CELF Ltd). CELF Ltd is not a Croydon Council owned company, and it is a Company limited by guaranteed and has three members with equal voting rights.

Croydon Council does however have significant influence under the Agreement for Delivery of Services where it reserves the right to manage to oversee the bank account and has a number of Council Staff and advisors also supporting CELF.

Initially the service was delivered through an outsourced contract to East London Business Centre (ELBC). However, ELBC became bankrupt in 2019 and Norfolk and Waveney Enterprise Services, a separate company who had been commissioned by ELBC for part of the delivery of the loan fund, continued to deliver on behalf of the loan fund until 2019/2020.

No new loans have been issued since 2019/20 and Norfolk and Waveney Enterprise Services exited the arrangement and CELF, with Croydon Council, commissioned Daniel Silverman (Debt Collecting company) to begin to collect outstanding debt.

Council gave grant funding of £1.25m to CELF to use as a loan to businesses in the borough. CELF is now providing back to the Council £0.755m in cash and £0.200m in loan value from the initial funding. The balance of £0.275m has been expensed by CELF, since inception of 2007, towards a range of costs including agency fees for Daniel Silverman and other debt collectors, accountancy fees, legal fees and loan write off where applicable.

CELF has requested that £0.065m is retained to help it settle remaining legal and accountancy fees with any surplus balance which will be passed back to the Council. None of the Directors or Members have been renumerated.

CELF’s board have agreed to the winddown the Company and will enter into the Asset Transfer Agreement once the Council has received necessary governance sign off.

Decision

1. 1.1          Approve the transfer of the Loan Book of and cash ofbalance from CELF to the Council and to agree that £0.065m is retained in CELF to complete remaining winddown activity.
2. 1.2          Note Croydon Enterprise Loan Fund (CELF) will proceed with a solvent winddown.
3. 1.3          To approve entering an Asset Transfer agreement as provided in Appendix A.
4. 1.4          To approve a direct award of a contract for debt collection services to Daniel Silverman for a period of up to 12 months at a maximum value of c£0.017m for the 12-month period.
5. 1.5          Note the approval of a waiver under Regulation 5 of the Contract Standing Orders by the Head of Strategic Procurement has been obtained, at Appendix B