Agenda item

White Paper Motion (in the name of Councillor Lewis) - Public Works Loan Board

This Council is concerned by the Government’s recent decision to restrict council investment in desperately needed new affordable housing, infrastructure, schools and regeneration schemes in Leeds by increasing the interest rate for borrowing from the Public Works Loan Board.

 

Council is particularly concerned the Government took this decision without any warning and without consultation. Council believes this is symbolic of a national administration that has no concern for good financial planning among councils, as evidenced by its continuing failure to provide certainty of long term funding for councils.

 

Council therefore calls on the Government elected on 12th December to provide long term, sustainable funding for councils. 

 

Minutes:

It was moved by Councillor Lewis, seconded by Councillor A Khan that this Council is concerned by the Government’s recent decision to restrict council investment in desperately needed new affordable housing, infrastructure, schools and regeneration schemes in Leeds by increasing the interest rate for borrowing from the Public Works Loan Board.

 

Council is particularly concerned the Government took this decision without any warning and without consultation. Council believes this is symbolic of a national administration that has no concern for good financial planning among councils, as evidenced by its continuing failure to provide certainty of long term funding for councils.

 

Council therefore calls on the Government elected on 12th December to provide long term, sustainable funding for councils.

 

An amendment was moved by Councillor Robinson, seconded by Councillor Lamb

 

Delete all after ‘This Council’ and replace with:

 

‘notes the potential impact on future borrowing in Leeds as a result of the 1% increase in the interest rate from the Public Works Loan Board.

 

However this Council is concerned by borrowing levels in Leeds since 2010 and the impact this is having on the revenue budget in the city. Council believes this is a direct result of the ruling administration’s Treasury Management policy and notes with alarm the projections contained in the Medium Term Financial Strategy presented to Executive Board in July 2019 that 22% of the net revenue charge will be used on debt repayments, based on the 2019/20 revenue budget this amounts to £113m per year.

 

Council therefore calls on the ruling administration, through a communication in forthcoming bills, to be open and transparent with Leeds Council Tax and Business Rate payers by clearly explaining that in under three years’ time 22% of the local tax they pay will be spent on servicing debt.’

 

A second amendment was moved by Councillor Bentley, seconded by Councillor Campbell

 

After the first paragraph of the motion, insert:

 

“Council understands that some local authorities are using low cost finance to make high risk investments.  However, to double interest rates for all borrowing is short sighted and counter- productive”.

 

In the final paragraph of the motion, remove all after 12 December and insert:

 

“to introduce differential interest rates based on quality and risk to ensure continued investment in essential assets”

 

The motion will then read:

 

This Council is concerned by the Government’s recent decision to restrict council investment in desperately needed new affordable housing, infrastructure, schools and regeneration schemes in Leeds by increasing the interest rate for borrowing from the Public Works Loan Board.

 

Council understands that some local authorities are using low cost finance to make high risk investments.  However, to double interest rates for all borrowing is short sighted and counter productive

 

“Council is particularly concerned the Government took this decision without any warning and without consultation. Council believes this is symbolic of a national administration that has no concern for good financial planning among councils, as evidenced by its continuing failure to provide certainty of long term funding for councils.

 

“Council therefore calls on the Government elected on 12th December to introduce differential interest rates based on quality and risk to ensure continued investment in essential assets.”

 

The amendments in the name of Councillors Robinson and Bentley were declared lost and upon being put to the vote it was

 

RESOLVED – That this Council is concerned by the Government’s recent decision to restrict council investment in desperately needed new affordable housing, infrastructure, schools and regeneration schemes in Leeds by increasing the interest rate for borrowing from the Public Works Loan Board.

 

Council is particularly concerned the Government took this decision without any warning and without consultation. Council believes this is symbolic of a national administration that has no concern for good financial planning among councils, as evidenced by its continuing failure to provide certainty of long term funding for councils.

 

Council therefore calls on the Government elected on 12th December to provide long term, sustainable funding for councils. 

 

Supporting documents: