Thurrock Council is saving over £1½ million more than anticipated this year due to changing the way it borrows money.
The council owed over £84 million to the Public Works Loan Board (PWLB) which it was repaying at an average rate of 5.7 per cent. Borrowing from other sources, and despite a £17 million premium to pay the entire PWLB debt off, has brought the interest down to 0.5 per cent and saved the £1½ million for the rest of this year alone.
The news was given to the Council’s Cabinet at its meeting on Wednesday (10 November) evening. Members also heard that the latest projections from in-year (2010/11) savings showed a small, £79,000, underspend.
Cllr John Kent, Leader of the Council, said: “It’s a marvellous feeling to be able to give some good news. We are looking at making some difficult decisions this evening, but this news will help reduce the need for even more cuts.
“I would like to thank the finance team for their work in saving this money — it would have been over £2 million had this happened at the start of the financial year.
“I would also like to congratulate the whole council for the way staff as a whole has acted on the in-year savings. These were unexpected because the new government ended funding to many things we had budgeted for — around £4 million worth — and Thurrock was already overspending at the rate of £1 million every couple of months.
“The fact that we are now looking at an underspend come the end of March is quite remarkable. It’s been tough and we dare not lose our focus on savings, but it gives me great confidence for the future.
“The interest rate savings, the underspend and the fact that the government has frozen most council pay rates means the council’s reserves will be in a much stronger position than we inherited.
“At the start of this financial year we had just over £2 million in reserves and now we are looking at having very nearly twice that in April 2011. It’s still not enough, but we are getting there.”