HEREFORDSHIRE Council’s £40m contribution to a waste incinerator shared with Worcestershire  is up for a “risk review”.

Full Council is tomorrow (Friday) expected to make supervision of the incinerator project - and related financing – a responsibility of the audit and corporate governance committee.

In February, full council passed a 2014-15 budget plan committing the council to paying £40m for the energy from waste (EfW) incinerator at Hartlebury, Worcestershire, over  the next three years.

The plan’s strategy estimates council borrowing to increase by £50.8 million over 2014/15, pushing the overall debt up to £218.2 million including £11 million borrowed over the year for the incinerator.

Previously, cabinet had  authorised “all necessary steps” to be taken in securing £40m from the Public Works Loans Board.

Tomorrow the full council meets to make its appointments for the coming year.

Supervision of the incinerator is proposed as an addition to the audit & governance committee terms of reference.

If approved, as expected, the committee can - in conjunction with external advisers – review the risks being borne by the council through its funding of the incinerator and consider whether those risks are “reasonable and appropriate”.

The proposal also allows the committee to:

- Monitor the administration of the loan to the project in line with “best banking practice”.

- Consider what steps should be taken to protect the interests of the council as lender  in the event of a default or breach of covenant related to the project.

- Consider and recommend “appropriate courses of action” to protect the position of the council as lender.

Included in the brief is the committee’s power to make recommendations to council with regard to its budget and policy framework and the loan and take “other steps” in relation to  the loan as the committee considers appropriate – within the terms of reference.

The incinerator project – and particularly its funding – came up against strong opposition inside and outside the council before being backed in the 2014-15 budget.