£65m in debt… finance chief expects clampdown on councils’ ability to borrow

Debt fuelled acquisition of commercial property by the borough council might be a thing of the past in Hastings.

Tonight members of Hastings Borough Council’s cabinet will hear that a government consultation that ended in July is expected to put an end to councils being able to borrow from the Public Works Loan Board (PWLB) for that purpose.

In a report prepared by finance officer Peter Grace the cabinet will be told that the outcome of the consultation: “…is expected to result in the prevention of borrowing purely for monetary gain/yield. This has arisen as a number of authorities have been viewed as taking too high a level of borrowing and risk and therefore acting imprudently given their size and responsibilities.

Councillors will tonight see this report detailing the council’s borrowings. Some of the loans will not be fully repaid for nearly 50 years.

“It is expected that this will result in borrowing being controlled more closely with a stop on borrowing for commercial property purchases where yield is the prime objective. The new rules are expected to be introduced in 2021, but this could potentially be earlier.”

Papers will also show that the council’s gross interest payments on the loans it has taken out in the last six years to buy and develop commercial properties around the town stands at £1.9m for this year.

Main photo shows the new Bexhill Road Aldi development which has been funded by Hastings Borough Council’s borrowings.

One thought on “£65m in debt… finance chief expects clampdown on councils’ ability to borrow

  1. Excellent informative article displaying this rather frightful debt this council has bought not only upon itself but also the residents of the borough.
    Way overtime to stop this PWLB set up of loans for buying commercial properties by councils.
    While not a property guru it looks as though all the retail units HBC has bought this Aldi venture might be the only one you might say is a safe bet. All the others must be in a risky future.
    And after all this purchasing the public still have no idea how they selected these properties. Who’s advice they took prior to the purchase and who within the council.
    Another example of what goes on behind closed doors they feel the public must not know about. Well not until it is done and dusted. Oh for the need for the reality of “Transparency” but far too a Utopian concept for HBC I hate to say.

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