A decision to hand out almost a quarter-of-a-million pounds to fund a new credit union branch has been criticised.

Last week, Allerdale Council’s executive approved giving £220,300 to West Cumbria Credit Union to open a new branch in Workington.

But Allerdale’s independent councillors have now called in the decision, which is due to be discussed at a scrutiny committee hearing tomorrow.

Councillor Bill Finlay, leader of the independent group, said: “For the last six weeks there’s been almost weekly sessions of the Poverty Task and Finish group and they were not consulted on the decision the executive took.

“Another issue is predetermination.”

Mr Finlay said someone had already been appointed to run the new branch and that options given to councillors sitting on the executive when considering the proposal “read as if the credit union had already been told it would be getting the money.”

The report prepared by Allerdale’s corporate director Andrew Seekings, who recommended the proposal for approval, listed the following alternative options: “Do nothing – this was not seen as a credible option for the council as it attempts to reduce inequalities across the borough.

“Smaller grant funding support – given the need to drive growth forward and the need for a retail quality outlet and staff to support, smaller funding would not give West Cumbria Credit Union the ability to create the sustainable future the council wants and deliver the outcomes, above.”

An Allerdale Council spokesman said: “The decision to support West Cumbria Credit Union was part of the council’s strategy to tackle inequality and the poverty caused by unaffordable loans. This is a commitment made in the council plan.”

Full responses to the issues raised would be discussed at the committee hearing.

Mr Finlay said the proposal did not help the most needy.

He said: “To be able to use the credit union, people need to build up a savings history. If you want a loan you have to be in a position where you can give money back. So no matter how low, you need to have some form of regular income.

“The Poverty Task and Finish group has been looking at people who aren’t managing at all and we’ve been focusing on those who aren’t getting any assistance, the poorest in the community.”