by political editor Paul Francis

A £3m county council fund to encourage the development of new community-based enterprises is being questioned after it emerged that just three organisations have been given loans.

Kent County Council launched its “Big Society” fund last January as one of its major policy initiatives, aimed at supporting so-called social enterprises.

Under the scheme, loans and some grants are awarded to businesses, charities and voluntary groups on the basis money made is reinvested back into the community.

But there has been criticism of the interest rate charged on loans, which can be between 12% and 15%.

The council acknowledged this week that take-up was slower than expected and it was rephasing some of the money earmarked.

Loans have been offered to just three organisations, while a further six are weighing up offers. Together, the loans either accepted or offered total just 168,500.

Cllr Mike Hill (Con), cabinet member for communities, said: “The Big Society is a three-year plan to which KCC has allocated £1m each year.

The launch of the Kent Big Society Fund by Blair Gulland, trustee of Kent Community Foundation, left, with Mike Hill, KCC cabinet member

"The take-up during the first year of the scheme has been slow, but it appears this is in line with the national trend.

"For this reason we thought it was worth rephasing the money. It is a new area of business that will undoubtedly take time to grow.”

Companies and other organisations like charities can apply for loans of between £10,000 and £100,000 so long as there is evidence that their plans will benefit Kent residents.

Opposition parties say the county council should re-think the scheme and consider scrapping it.

Liberal Democrat leader Cllr Trudy Dean said: “My concern has always been that the interest rates were too high.

"I can’t see any reason why anyone would choose the fund above a bank. I also am not convinced that people want loans instead of grants.

"If it is not working and we have the money just sitting there, then we do need to look at it.”

Labour spokesman Cllr Les Christie, who sits on the KCC panel that considers applications, said: “In the current uncertain climate, I think organisations are asking themselves whether it is worth the risk taking the money.

"To be honest, I think we are struggling to find people who want loans. From the evidence, I am not convinced this is the best use of KCC money - there are other organisations who could make better use of it.”