Science park cannot repay millions in council loans

Exeter Science Park cannot pay back its debt to Exeter City Council

A science park cannot afford to pay back loans to the local authorities which lent it money, it has emerged.

Exeter City Council lent £1m to Exeter Science Park Limited in 2015 and the money was due to be paid back in January 2025.

Councillors heard on Tuesday the science park was "unable to repay the loan" and agreed to convert the loan into shares in the science park.

The science park said it was "trading profitably" and converting loans into shares was "part of a planned restructuring process".

The Exeter City Council report said the science park was also part-owned by Devon County Council, East Devon District Council and the University of Exeter with all four partners planning to convert any loans into shares.

The science park offers office and laboratory space with the aim of being a "centre of activity for businesses in science, technology, engineering, maths and medicine".

According to the report, the total amount owed to Exeter City Council, including interest accrued, is £1,238,966.

It said switching the loan to shares meant it would no longer earn interest on the loan.

'Strike a balance'

The deal would allow the science park to continue "in order to deliver on its primary objective of providing high quality jobs to support the regional economy", the report said.

It said the council needed "to strike a balance between the importance to the regional economy in maintaining Exeter Science Park Limited" and the council's "duty to recover and preserve its funds".

Exeter Science Park issued a statement which said there were 750 jobs on site and shareholders were "keen to capitalise on this success".

The statement said: "This is part of a planned restructuring process that will position Exeter Science Park, which has a positive balance sheet and is trading profitably, to attract private sector investors and developers.

"The amount invested is covered comfortably by fixed assets and future land sales."

Devon County Council said it had "guaranteed" the science park "up to £2.65m" which was "securely backed by the land value of the site".

East Devon District Council said it agreed in March 2023 to convert a £1m loan into shares in the science park.