This is how EDDC is financing the shortfall of the build of its new HQ – you know, the one that was supposed to be “cost neutral” and was costing around £10 million at the last evaluation.
“Local authority borrowing from the Public Works Loan Board has reached a seven-year high as cash-strapped councils increasingly invest in capital projects.
In the last financial year the PWLB increased the value of loans to local authorities by 42%. It advanced 780 loans with a value of £5.2bn to local authorities, compared to 622 loans with a total value of £3.6bn in 2016-17, the board’s annual accounts, released yesterday showed.
The value of loans has been going up in recent years after dropping to £3.2bn in 2012-13 following a high of £16bn in 2011-12.
Paul Dossett, head of local government at Grant Thornton, said the rise was part of a growing trend of councils borrowing more – and not just from the PWLB.
As a recent analysis by PF showed, local authorities are increasingly looking at methods such as bonds and forward-starting loans for capital projects.
“It reflects the growing increase we have seen in capital investment in local authority infrastructure as a whole,” he said.
“While different councils have different options and approaches to generating income, a small amount of this increase is likely to relate to investment in assets for income generation.”
Although, he believed the rate of councils investing in assets for commercial gain might have slowed since the government responded to its consultation on the prudential code earlier this year.
The Ministry of Housing, Communities and Local Government announced in Feburary it will now require local authorities to produce an annual investment strategy to ensure greater transparency. …”