Wednesday, 24 June 2015

Lewisham Council has £440milion 56% of tax payers debt due 2 PFI 2016



Member to reply:       Cabinet Member for Resources

Question

I recently read in the NewsShopper that Lewisham Council has debts of £450m

I would like to know
- What the current debt figure is
- When these debts were accumulated (specific years)
- The purpose of those loans - what did they purchase?
- The rate of interest on those debts - if they are consolidated, then one figure is fine.  If they are in separate accounts, then each rate separately please.

Reply

What the current debt figure is
In the financial year 2013/14 the Council had debt totalling £444 million. In 2014/15 the debt reduced to £440 million.  This figure can found in the draft 2014/15 Statement of Accounts on page 34 by adding long term and short term creditors.


Whe
list of the Council’s outstanding debt and the date of inception at 31 March 2015 is presented in the table below:
Counterparty
Starting Year
Ending Year
Liability
£000
Market Loans:



Bayerische Landesbank Girozentrale
1992
2018
10,000
Bayerische Landesbank Girozentrale
2001
2036
15,000
Bayerische Landesbank Girozentrale
2001
2041
10,000
Depfa-Acs Bank
2004
2049
10,000
Dexia Municipal Agency
2004
2054
5,000
Dexia Municipal Agency
2005
2065
10,000
Dexia Municipal Agency
2006
2066
25,000
Dexia Municipal Agency
2006
2066
7,500
FMS Wertmangement
2008
2058
19,873
Accrued Interest


1,227
Sub total


113,600
PWLB Loans:



Public Works Loan Board
1983
2043
561
Public Works Loan Board
1995
2020
1,581
Public Works Loan Board
1995
2020
2,245
Public Works Loan Board
1995
2045
412
Public Works Loan Board
1995
2016
1,057
Public Works Loan Board
1995
2016
206
Public Works Loan Board
1996
2046
4,676
Public Works Loan Board
1997
2057
38
Public Works Loan Board
1997
2027
468
Public Works Loan Board
1997
2027
2,338
Public Works Loan Board
1997
2022
935
Public Works Loan Board
1999
2025
1,871
Public Works Loan Board
1999
2029
1,684
Public Works Loan Board
1999
2028
3,741
Public Works Loan Board
1999
2026
1,496
Public Works Loan Board
1999
2031
3,741
Public Works Loan Board
1999
2030
935
Public Works Loan Board
1999
2032
3,741
Public Works Loan Board
2000
2023
935
Public Works Loan Board
2000
2023
561
Public Works Loan Board
2004
2034
748
Public Works Loan Board
2005
2035
935
Public Works Loan Board
2005
2035
935
Public Works Loan Board
2008
2048
2,932
Public Works Loan Board
2008
2037
7,330
Public Works Loan Board
2008
2057
2,932
Public Works Loan Board
2008
2057
4,691
Public Works Loan Board
2008
2058
6,388
Public Works Loan Board
2008
2057
3,194
Public Works Loan Board
2008
2056
4,791
Public Works Loan Board
2009
2054
1,651
Public Works Loan Board
2009
2054
4,952
Public Works Loan Board
2009
2052
3,301
Accrued Interest


855
Sub total


78,858

Public Finance Initiatives (PFIs)*



Brockley PFI
2007
2027
44,292
Downham Lifestyles PFI
2007
2039
10,173
Grouped Schools
2007
2036
36,545
Building Schools for the Future (BSF1)
2009
2035
48,641
Building Schools for the Future (BSF2)
2011
2037
17,493
Building Schools for the Future (BSF3)
2012
2037
26,950
Building Schools for the Future (BSF4)
2012
2038
49,993
Street lighting PFI
2011
2036
13,666
 Sub total


247,753
Total debt


440,211


The purpose of those loans - what did they purchase?

More than half of the debt - £247,753 or 56% - relates to Private Finance Initiatives (Schools, Housing, Street-lighting and Leisure Centre).  These purchased the following:
·               refurbishment and maintenance of the 1,800 properties in the Brockley PFI scheme;
·               rebuilding and maintenance of Downham Leisure Centre;
·               replacement of street lighting with more energy efficient equipment; and
·               rebuilding and maintenance of all the Council’s secondary school estate.

The remaining debt was not for any specific project.  The debt is part of a rolling programme of borrowing to finance a range of projects within the Council’s Capital Programme.  Debt is only committed to where there are not sufficient funds available for the schemes through government grants, third party funding or capital receipts and prudential borrowing requirements are met.  The Capital Programme is approved by Council annually as part of the budget setting process and lists the main schemes, split between the general fund and housing revenue account.   The latest list is set out in the budget agreed by Council on the 25 February 2015.


The rate of interest on those debts
The average interest rate for the market loans and PWLB are 4.7% and 5.6%  respectively.  These figures were published in the Financial Outturn report for Mayor and Cabinet on 3rd June 2015.

The average interest rate for Private Finance Initiatives is 10.3%.


www.peoplebeforeprofit.org.uk oppose PFI as an Odious debt 







n these debts were accumulated (specific years)

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