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 3^rd 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)