Liverpool City Council owes £878.3million following a loan to pay for capital projects.
Most of the debt relates to funds borrowed from the Public Works Loan Board (PWLB). The PWLB lends money on behalf of Her Majesty’s Treasury to local authorities to spend on capital projects.
The council has borrowed more than £475million since Labor took control of the local authority in 2010. The loans, with interest, total more than £513million.
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The first loan was contracted in January 2015. The last loan dates back to November 2021.
Deputy Mayor and Cabinet Member for Finance, Councilor Jane Corbett, said the town had used PWLB money to pay for major capital projects such as Paddington Village and the regeneration of the Anfield area.
Paddington Village is a high-tech district in the city center which includes the new Spine Building. Anfield regeneration is a long-term project to revitalize the streets around Walton Breck Road and Stanley Park.
The council worked in partnership with Liverpool FC, Your Housing Group and Keepmoat Home to complete 18 projects. The council has taken out 38 PWLB loans since Labor took control of the local authority in 2010.
The city took out 13 loans in 2019, the most loans in a year. In total, the council borrowed £544 million from the PWLB. Including interest, the local authority owes £636m.
The PWLB’s first loan was taken in 1987 for £92,19886.11, when the council was controlled by Labour. The city took out three loans in 2008 when the city was controlled by the Liberal Democrats.
The board recently addressed the subject of public borrowing in its accounts. The accounts read: “Borrowing As of 31 March 2021 the actual level of Council borrowing was £878.3m; this includes loans from the Public Works Loans Board (PWLB), other financial institutions and other local authorities, as well as a small amount of local government bonds and shares”.
This type of loan at competitive interest rates is a normal means of financing the investment programs of local authorities.
Deputy Mayor and Cabinet Member for Finance, Cllr Jane Corbett, said: “The loan is used to invest in improving the city’s infrastructure and the loans span many different timeframes and programs. It includes projects such as the development of the village of Paddington, the regeneration of the Anfield area and investments in the improvement of the lanes which are extremely important for the quality of life of the residents.
“In addition, we need to borrow to meet our net zero carbon goals, such as decarbonizing our municipal buildings and vehicles and installing LED lighting, all of which are crucial to offset the impact of climate change. are committed to ensuring that the investments we make benefit local communities, centered around our Triple Lock of People, Planet and Equality.
“The Public Works Loan Board is a long-established system with funds issued by the Treasury at a competitive rate of interest and repaid over a period of time.
“Our level of borrowing is within affordable limits and has been budgeted for, and compares well to other councils of a similar size.”