Telford & Wrekin Council expecting to borrow extra £117.9 million

The council is already £321.1million in debt and this is set to grow further as it looks to invest further in housing and schools.

Councillor Nathan England, the council's cabinet member for finance, said: “We’ve got a large capital investment programme that’s going through at the moment.

“Next year there is going to be quite a lot of investment and over 60 per cent of that delivers a return back to the council.

“If you look at our housing portfolio, that’s an investment. The investment we’ve got going into schools as well. It’s really positive for the borough and it’s what we need.

“A lot of that is grant funded from central government and not just borrowing.”

Members of the audit committee met on Wednesday night and considered a treasury management update and strategy for 2024/25.

The report stated: “The council is currently expected to need to borrow an additional £117.9m in 2024/25 based on the current capital programme plans and will adopt a flexible approach to borrowing.

“In consultation with its treasury management advisors consideration will be given to affordability, maturity profile of existing external financing, interest rate and refinancing risk as well as borrowing source.”

The report showed that the council’s borrowing for March 2023 was £347.2m and in December the figure had risen to £350.7m – an increase of 3.5 million.

The amount of investments (excluding NuPlace) had reduced from £38.5m to £29.6m – a movement of £8.9m.

The amount of net indebtedness the council is in rose by £12.4m from 308.7m in March to £321.1m in December.

Figures released by the BBC data unit showed that Telford & Wrekin Council had slightly less debt that Shropshire Council.

The data showed that 127 councils across the country had a higher level of debt than Telford & Wrekin.

Some of the council’s which are furthest in debut include Woking (£1.9 billion), Warrington (£1.7bn) and Thurrock (£1.4bn).

Telford & Wrekin's audit committee was told that the level of borrowing was ‘in line’ with the council's capital programme.

Councillor Paul Thomas asked how other councils had become bankrupt with council officers managing their finances.

He was told that Birmingham’s problems had come from equal pay claims which ‘went back a number of years’.

It was also highlighted that other councils had invested outside of their boroughs purely to yield a profit.

Anthea Lowe, director of policy, governance and monitoring, said that some councils had previous troubles with governance.

She added: “Officers were given free reign to make investments, they were not as robust as we are here.”

The update report stated that the council’s strategy was a ‘continuation of that used in recent years which has provided considerable benefits to the council’.

This included taking new borrowing with shorter maturities before gradually lengthening maturities, also to taking advantage of longer term loans when opportunities arise.

Councillor Elise Davies praised the work of the council’s financial officers.

“It’s really pleasing to that you are carefully managing the risk and reward, it’s something to be really proud of,” she said.

She was supported by Councillor Paul Thomas, who said that the council had some ‘dilligent and competent’ financial officers.

Speaking after the meeting, Councillor England said that the treasury management strategy had received cross-party support from councillors assigned to three political parties.

He added: “There are a list of potential indicators that we have to adhere to and it’s good to be meeting all those key indicators.”