Pipeline projects worth £6.3millon in limbo to save Council £500,000 on interest payments
Over £6.3 million worth of building projects in Powys are on hold due to the cost-of-living crisis.
At a Powys County Council Cabinet meeting on Tuesday, November 8, Councillor David Thomas, the cabinet member for finance said that this move would save £500,000 in borrowing costs.
But Cllr Thomas’ report did not detail which schemes are in limbo – only that they are “pipeline schemes”
At the end of September, the council had spent £24.37 million of the total revised capital budget of £96.46 million set aside for the 2022/23 financial year.
This means that the capital budget has shrunk by £18.85 million since June.
At that time, the capital budget stood at £115.31 million.
Cllr Thomas said that 42 per cent which equates to £40.66 million of the capital budget comes from borrowing and that the interest costs is charged to the revenue budget which funds frontline council services.
Cllr Thomas said: “Continued increasing inflation is having a significant impact on the cost of schemes as material and construction costs rise.
“Some schemes may be reduced or paused until there greater certainty about cost and funding.
“Any additional funding required is likely to increase borrowing, this will increase costs on the revenue budget.”
“The previous report showed that the financial position on the revenue budget is forecasting a £7million deficit.
“In order to reduce expenditure some pipeline capital schemes that have not progressed to approval stage have been delayed.
“This will reduce the immediate need to borrow delivering an underspend on borrowing costs of £0.5 million.”
Cllr Thomas said that the council had made £810,000 in capital receipts and that more sales would take the figure up to £870,000 and he hoped that the figure would rise to £2million by the end of the financial year.
He added that a virement to shift £100,000 that had been earmarked to deal with cyber-security issues would need the cabinet’s agreement so that it can be moved to a budget for new IT equipment.
Cabinet members voted unanimously to note the report and approve the virement.
