THURROCK Council will have saved £18 million by its innovative borrowing policy, members were told at Wednesday (26 March) evening’s meeting of the council.
Leader, Cllr John Kent, was responding to a question from Cllr Steve Liddiard which asked “Can you tell whether the debt restructuring exercise that was undertaken in 2010 did alleviate the difficult financial situation that the Council found itself in and what has been the effect to date?”
Cllr Kent said that since June 2010 the council had changed its borrowing strategy, paying back the full amount owed long-term and instead borrowing the money on repeating short-term and far cheaper loans.
He said: “When our finance team explained to us that we had reserves of just £2 million and we were overspending at close on £½ million a month and that we had four months to go before we went bust, I agreed something had to be done.
“When our finance team explained to us that we were paying well over the odds in interest rates and that we could save significant amounts of money by being brave, we thought it very sensible.”
Cllr Kent added: “It’s nearly four years on now since our ‘debt rescheduling exercise’ where our entire fixed rate Public Works Loan Board debt all £84 million of it was repaid and replaced with short dated temporary debt that is continually renewed.
“It has will have saved the council approximately £11½ million by the end of this financial year. It will have put an extra £11½ million in our coffers, it will have meant that over that time we have not had to make an extra £11½ million worth of cuts and – perhaps most satisfying of all, it is £11½ million the good people have Thurrock have not handed over to the banks.”