The Peterborough Evening Telegraph
The facts on the council’s finances
Much criticism has been circulating recently about the state of the council’s finances and the debt it carries, which is £500 million according to the current leader of the council, Mohammed Farooq of Peterborough First.
But what does he know? He’s only £38 million out.
This debt position is deliberate and is not as a result of any financial mismanagement or overspending on our part over the past 20 years or so. The council is knowingly in debt for good reason and that is perfectly normal, although, in Peterborough, it is slightly higher than perhaps it should be. But again, there are good reasons for that and we were working hard to reduce it.
Most local authorities have debt to varying degrees and Peterborough is no different – and it goes up and down. The council usually borrows money, mainly from government, to fund capital projects such as the building of new schools and other public buildings and to fund other major capital projects around the city. This enables us to do things in the here and now and pay back the borrowing over a longer fixed period.
It’s also been shouted loudly by those who wish to run the city down that we are bankrupt and that it is all down to the Conservatives. This is simply not true. Whilst we may owe some £462 million the actual figure at the time of writing, remember too that this debt has accumulated over several decades including the time when the council was Labour controlled. However, we still have much more in assets that we owe to creditors and we can continue to service the debt from ongoing revenue income, thus we are legally solvent.
Here are just some of the things your money has been spent on or that we hold as assets through borrowing.
• £110m of school’s assets, plus large sums spent building new academies not on our books now.
• £63m on the Energy from Waste Plant built from borrowed money.
• £55m Invested in culture and leisure facilities, built or improved from borrowed money.
• £12m housing stock all built from borrowed money.
• £13m farm estates – bought and improved from borrowed money.
• £36m In vehicles, plant and equipment essential for the day-to-day operations of the council.
The council holds approximately £630 million in assets which includes infrastructure and investment properties on its balance sheet.
So, in fact, it’s a positive financial position overall, but it could be better, which is why the Conservatives were working on a disposals programme of surplus assets to recoup capital and pay back some of the debt quicker. This, in turn, would then require less revenue to service it, freeing up money to invest back into vital services that matter to most people.
Another example of our recent prudent financial decision-making is the purchase of Sand Martin House which was originally taken on as a lease by the council. This purchase saves the council and taxpayers in excess of £7 million. In simple terms, like many people, we took out a mortgage instead of paying rent so it’s much cheaper in the long run. The council were also leasing or owned many other buildings dotted around the city so we simply exited those and put the existing financial resources available into a central office base.
As we head quickly now towards the local elections on May 2nd, if you are naturally a Conservative voter at heart then don’t let the terrible national political picture in Westminster sway your head or your heart. Stick with what you know is best for the city - a Conservative-run council.