Corby Council has debts of £123m

Corby Cube: Corby: at night George St'Thursday November 23, 2017 NNL-171123-212036009
Corby Cube: Corby: at night George St'Thursday November 23, 2017 NNL-171123-212036009

Corby Council has more than £123m worth of debt and some multi-million-pound loans will not be paid off until 2067.

The authority has borrowed from councils as far away as Sheffield and Chelmsford and has 14 separate loans with the Public Works Loan Board (PWLB), a central government lender which loans to authorities for capital works projects.

The authority borrowed an additional £41m in the 2017/18 financial year, which it used to invest in two warehouses on industrial estates in the town. The costs of the loan repayments are more than £2m per year.

Council Leader Tom Beattie said he is confident the debts can be managed.

He said: “This is not a high risk strategy. We have been encouraged by the Government to be more entrepreneurial and we have borrowed prudentially. The warehouse investment will see a return of £1m per year.”

Almost all of the debt has been incurred in the past six years. The authority paid central government £71m in 2012 to take full financial control of its housing stock and £12m of the debt relates to the overspend on the building of Corby Cube.

Conservative councillor David Sims, who represents the Oakley Vale ward, said he has been warning the council against such high levels of borrowing for a long time and is concerned that the debts will causes financial problems down the line.

He said: “I understand that local authorities have to find new ways to finance their services but there are other ways of doing it than borrowing.

“Although the council can service the loans at the moment can they service the debt in the future?

He added: “The decision making process about this should also be more transparent.”

The authority has three separate 50-year loans totalling £10m. It has seven one-year loans from other councils including Wakefield Metropolitan Council and Winchester City Council. Theses loans add up to £17.5m and have to be repaid this year.

A Treasury Management Report considered by the council’s audit and governance committee last week (May 16) said: “The council is continuing to adopt a short-term borrowing strategy combined with placing surplus funds into money markets where possible to maximise the council’s financial position.”

The Corby authority reported at its end of financial year this March that it had £9.1m in reserves.

It looks likely that Corby Council, along with the other seven councils in Northamptonshire, will be reformed into two separate unitary authorities in May 2020. The councils are currently putting together joint bids for a north and west unitary after being requested to do so by the Secretary of State for Local Government Sajid Javid.

It is not known how debts and assets of the various councils will be redistributed under the unitary system.