Agenda item - Member Involvement

To consider the following matters raised by councillors:

(a)      Petitions: to receive any petitions submitted to the full Council or at the meeting itself;

(b)      Written Questions: to consider any written questions;

(i)            Annual Repayment Rates for BHCC Loan – Councillor Gibson

(c)      Letters: to consider any letters;

(d)      Notices of Motion: to consider any Notices of Motion referred from Council or submitted directly to the Committee.

125 (a)            Petitions

125.1              No petitions had been received from Members.

125 (b)            Written Questions

125.2              One written question had been received from Councillor Gibson.

‘Can the Chair of the Committee please provide a table showing the annual repayment required of BHCC on a loan (showing repayment periods of 30, 40, 50 and 60 years for each loan), at current PWLB rates for 5, 10, 20, 25, 30, 35, 40 and 50 million pounds?’

The Chairman gave the following response:

The table below shows the annual financing costs of borrowing based on the Public Works Loan Board (PWLB) published rates on 6^th February 2019. These costs are subject to the government’s discount to local authorities. This is known as the ‘certainty rate’ which is 0.20% below the published maturity rate for standard new loans. These rates apply to maturity loans where the principle loan amount is repaid in one lump sum at the end of the loan period.

PWLB  rates are updated and published twice daily on banking days and can fluctuate substantially over time primarily due to changes to the Gilts market and the Bank of England Base Rate, and therefore the information in the table is indicative only, i.e. different interest rates would result in different costs.

The annual cost is based on the council’s Annuity Minimum Revenue Provision whereby the council sets aside repayments of the principle each year to meet the full loan repayment at the loan expiry date.

The parameters for the council’s investment and borrowing are set within the Treasury and Prudential Indicators. The 2019/20 indicators are due to be agreed at Budget Council on the 28 February 2019 as part of the Budget Report.

All loan finance must satisfy a number of conditions:

·         It has to be used to fund capital investment

·         The loan relates to the lifespan of the assets created

·         The cost must be affordable, prudent and sustainable with the financing costs being reflected in the council’s revenue budget.

Information for 60 years loans has not been provided as the maximum term for a PWLB loan is 50 years.

The Chairman passed a paper copy of the table to Councillor Gibson.

125 (c)            Letters

125.3              No letters have been received from Members.

125 (d)            Notices of Motion

125.4              No Notices of Motion had been received.