SWINDON Borough Council's debt has risen to nearly a third of £1 billion.

In fact, the total amount of debt the council has still to pay off is just under £400m at £397.5m - but investments by the authority of £66.8m offset that, meaning the actual figure is £330.7m.

That isis made up of £354m of borrowing and liabilities the council has to pay under the Private Finance Initiative of £43m.

Although it’s a huge sum if money, Swindon is nowhere near being the council with the highest amount of debt.

Woking Council, which has a population just over 100,000 - less than half the size of Swindon - was revealed last month to be £1.84bn. That’s only topped by the £11bn owed by Transport for London and the £5.2bn owed by the Greater London Authority.

The £330m owed by Swindon is just a little more than twice the authority’s annual revenue budget - through which it funds its day-to-day spending – of around £150m.

A report to the council’s audit committee which meets next week says the council took on another £13.9m of debt last year, but that was offset by the maturation of £11.12m of previous borrowing.

It said: “Total long-term debt has therefore increased from £351.7m to £354.4m over the year.”

Although £330m seems a lot, the report says the council needs to borrow more.

It lists Euclid Street’s Capital Financing Requirement – what it describes as the authority’s “ultimate borrowing requirement” - as £522m.

It adds: “This shows an under-borrowed position of £124.67m - ie there is a requirement for a further £124.67m of long-term borrowing to finance capital expenditure already incurred.

This relates fully to the general fund as the Housing Revenue Account is fully funded.”

But it warns: “The CFR (the ultimate borrowing requirement) is always higher than the actual level of borrowing, the difference being termed “internal borrowing” which represents the temporary funding of capital spend from existing cash balances and working capital as a short-term measure.”

It says the council’s treasury can make sure it has enough money to fund its spending “through borrowing from external bodies (such as the Government, through the PWLB or the money markets), or utilising temporary cash resources within the Council until that borrowing takes place.”

 

The former deputy leader of the council and cabinet member for finance Russell Holland said: “Every year the council balances it’s budget for day to day spending.  Money is borrowed specifically for capital improvements.  This will have paid for things like new schools and other improvements.  We also borrowed to invest and the investments generate over £1million in income.  Council borrowing is in line with other councils.”

The audit committee will meet at 6pm on Tuesday, May 24 at the civic offices in Euclid Street. The meeting will also be available online via a link on the meeting page at swindon.gov.uk