Royal Borough could amass £75million more debt, meeting hears

Shay Bottomley

shayb@baylismedia.co.uk
Royal Borough could amass £75million more debt

The Royal Borough could amass another £75million of debt over the coming years, the council’s head of finance has confirmed.

However, capital receipts could be used to pay off debts, which currently stand at more than £200million, over the next decade.

At an audit and governance committee meeting yesterday (Thursday), head of finance Andrew Vallance informed councillors of the borough’s financial strategy for the foreseeable future.

The council’s total level of borrowing as of the end of the 2021/22 financial year stood at £205.9million, an increase of £14.2million on the previous 12 months.

More than half of the council’s debts are to local authorities on a short-term basis (£119million) to take advantage of lower interest rates compared to long-term borrowing.

Furthermore, the council held £41.7million in invested funds, representing income received in advance of expenditure plus balances and reserves held by RBWM.

As such, the Royal Borough’s net borrowing stands at £164.2million; however, the level of borrowing could increase over the coming years. 

At the meeting, Cllr Julian Sharpe (Con, Ascot & Sunningdale) said: “I’m just looking at the borrowing position we’ve got at the moment that seems to be reflecting that, at the end of March this year, we had £206million out on borrowing.

“Is there any indication of how our borrowings are likely to be in the future with the developments we’re making across the town and the borough? Just to give an idea of what sort of numbers to expect in future years."

In response, Mr Vallance told councillors that although the figures were not mentioned in the report presented to the meeting, he predicted borrowing to rise in the medium term before dropping. 

“Off the top of my head, it certainly will go up £50-£75million across the medium-term financial plan,” said the head of finance.

“It will come down as we are able to repay from capital receipts in future years.”

Mr Vallance added that the capital receipts, which include the sale of fixed assets, shares or debt, would come in to ‘pay off the debt by about 2035’.

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