Halton Council faces hefty bill to balance books
A council in Cheshire could end up repaying almost double the £10m it is set to borrow from the government in order to stay afloat.Halton Borough Council is one of 30 local authorities in England to be granted exceptional financial support in order to stabilise its finances.The payment is not a bailout, but a loan from the government's Public Works Loans Board to be paid back over the next 20 years.The Local Democracy Reporting Service understands Halton Council would have to pay back £19m at the current rate of interest on the loan.
The Labour-run council applied for the loan after going £19m over budget with just £11.6m left in reserves.A previous report found the overspend had been largely driven by the cost of employing temporary agency staff, such as social workers and care workers, and expensive residential placements for children.The £10m loan's current rate of interest is 4.5%, which equates to £450k a year in interest, totalling £9m in interest payments alone over the next 20 years.With the original loan figure and interest combined, this would see a total repayment of £19m, all paid back at £950,000 a year for the next two decades.The interest rate on the loan is fixed, but borough finance chiefs hope that when the time comes to actually borrow the money – which is expected to be this autumn – the interest rate will be lower, reducing the overall payment.
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