Council is £90m in debt, latest figures reveal
BUT AMOUNT OWED ON LOANS STILL FALLING, COMMITTEE TOLD
MANSFIELD District Council has outstanding loans of more than £90 million – but its debt is falling.
The council currently owes £90.652 million – down £6 million year on year but considerably higher than three years earlier.
The figures were revealed on Tuesday as part of the council’s treasury management outturn report, which assessed the authority’s current financial position.
The document, relating to figures at the end of the 2020/21 financial year in March, revealed that about £35 million of the debt had been in place for more than 10 years.
A further £16.17 million had been in maturity for between five and ten years.
The document reveals that £86.016 million is owed to the Government’s Public Works Loan Board (PWLB), a body set up to lend major cash sums to local authorities.
A further £4.5 million is outstanding in a market loan, with £136,000 owed in short-term borrowing from the Mansfield-based Racecourse Trust.
The council expects a £1.5 million PWLB loan to be repaid on November 23, with a further £3 million scheduled for repayment on March 28 next year.
This would see the council’s current debt reduced to around £86.152 million – around £10 million less than the £96.680 million owed at the end of the 2019/20 financial year.
However, it would still be around £10 million higher than in 2018 – for the 2017/18 financial year, the authority owed £76.2 million.
This increased to £94.8 million the following year came after the council borrowed £20 million to pay for the capital purchase of investment properties.
These investments are made by the council as alternative revenue streams and to build a property portfolio.
The portfolio includes the £8 million Edinburgh Travelodge hotel currently owned by the council, which the authority plans to sell next year.
Councillor Mark Fretwell (Labour), chairman of the governance and standards committee, brought the report o to full council.
He said: “It was reported [in the governance and standards committee] that the council has taken out no new loans in 2020/21, and therefore the council’s total borrowing stood at [almost] £90.7 million as of March 31, 2021.
“The majority of loan debt is with the Public Works Loan Board, which offers preferential interest rates to local authorities.
“As of March 31, 2021, the council had £27.9 million invested in financial institutions, of which £6 million is held with the Debt Management Office, a Government-backed agency, on a short-term basis, to meet planned expenditure.”
And he added: “During the 2020/21 financial year, the council did not invest in any financial institutions which fell below the minimum standards approved by the council when it set up its treasury management strategy.”
As well as owning the Edinburgh Travelodge, the council also owns a Doncaster hotel trading under the same brand, a Pure Gym branch in Manchester, apartments in Clapham, London, a Volkswagen garage in Glasgow and a Wickes store in Loughton, Essex.
The majority of loan debt is with the Public Works Loan Board
Councillor Mark Fretwell