One BILLION pounds: Northamptonshire County Council's total debt
Northamptonshire County Council has debts totalling more than Â£1bn.
The authority, which is being run by commissioners and may not have even balanced its books last year, has revealed the figure in its draft financial reports for 2017/18.
At the end of this financial year on March 31, NCC owed £1,012,258,000 to various different organisations and had a number of higher interest ‘toxic’ LOBO loans in its debt portfolio.
It owes £415,233m to the treasury’s Public Works Loan Board, has £294,700m of non PWLB borrowing, owes £108,132m to short term creditors, £186,965m of long term finance and PFI liability and £7,497m of short term finance and PFI liability.
The authority’s short term borrowing increased by £77m last year as it headed towards its financial D-day in February which resulted in the issue of a 114 notice, warning that it may not be able to balance its books.
A Northamptonshire County Council spokesman said: “Of these liabilities, by far the largest figure relates to the Public Works Loan Board.
“This is the Government body which lends money to local authorities to invest in infrastructure such as schools and roads.
“This has been the principal way to fund such activity since the creation of the PWLB in the 1793.
“The PWLB is part of the UK Debt Management Office which is one of the Her Majesty’s Treasury’s executive agencies.”
According to the accounts the authority has £130m of LOBO loans that have a call-in date within the next 12 months.
LOBO loans are unregulated and have received much criticism in the finance world.
The loans were taken out to meet expenditure on things such as roads, infrastructure and schools.
The PFI liabilities are largely historic and were taken for a number of initiatives such as the Woodale centre in Northampton, residential care homes, and the street lighting scheme partnership with Balfour Beatty.
The authority is currently selling off a number of its assets to put much needed cash into its bank account and has plans to put historic Grade II listed County Hall in Northampton on the market.
According to the draft reports ‘the bottom line is effectively the negative £386m net worth of the organisation’.
This means that the council’s financial liabilities are more than its assets.
Assets are primarily owned buildings and infrastructure.
Last month (May) the council’s chief finance officer Mark McLaughlin, who has only been in post since the start of the year, warned that the council was already behind its schedule for savings and that officers could no longer be expected to perform ‘financial legerdemain’.
Legerdemain means slight of hand or trickery.
The financial woes of the authority mean that more service cuts are on the way and are expected to be announced next week when cabinet reports are made public.
Recent service cuts include a reduction in the winter service.
The authority will be retiring some of its gritting fleet, reducing the amount of the road network it treats and also removing a large number of grit bins.
The authority also wants to stop looking after 21 of its libraries and is suggesting that independent voluntary groups take them over.
A judical review is to be held next month into the legality of the proposal.
Editor’s note: In an earlier version of this story we said the council’s financial liabilities are less than its assets. We meant more and have corrected the article.