TOP Thurrock councillors have been told senior officers expect interest rates to remain very low for many months.
A report to the council’s cabinet on Wednesday (9 November) evening said no move in the base rate was expected until the third quarter of next year — and even then the rise would be a slow one.
But Council Leader, Cllr John Kent, said in answer to a question from Cllr Phil Anderson: “I am pleased to note that Cllr Anderson accepts the council’s policy is “generating significant savings” – it is indeed, somewhere in the region of £5 million over the two years, or around ten per cent on council tax, something he, I and all our residents should be pleased with.”
He added: “Now our reserves are heading up and I’m confident we will be even closer to our £9 million target come March next year, in fact I reckon this policy will mean our reserves will be in the region of £8 million come the end of March, plus an injection of nearly £2 million into the revenue budget next year.
“But because this is such a serious issue the council’s finance officers and outside advisers monitor the situation constantly.
“We all understand the situation can change, possibly quite quickly. The council still has access to long-term borrowing through the Public Works Loan Board which effectively provides us with almost immediate access to borrowing rates at just one per cent over the underlying cost of UK Government borrowing rates – anything from one year to 50.
“This means the council could rapidly shut down the risks of short-term rates and replace it with longer-term fixed rates.”
Cllr Kent explained: “Currently a 10-year PWLB loan currently has an interest rate of 3.3 per cent and if an application had been made today the funds would be in the council’s bank account on Friday, just two working days.”