Debt concerns as council’s spending programme reaches three-quarters of a billion pounds


A council’s capital spending is set to reach nearly three-quarters of a billion pounds over the next five years – leading to concerns over the amount being borrowed.

Stoke-on-Trent City Council has approved another expansion to its capital programme, with a total of £745 million now set to be spent between now and 2024/25.

The programme includes major regeneration schemes, new homes and roads, and the proposed multi-million pound revamp of Stoke station, along with more routine projects such as works to schools.

Elected members voted to approve to increase spending by £67 million – with £23.9 million coming from new borrowing. New schemes include a £12.7 million vehicle and plant replacement programme and the recently announced Longton Heritage Action Zone.

Council chiefs say the proposed level of capital spending is needed to boost the local economy, as well as being affordable due to the current low interest rates.

But opposition councillors questioned the wisdom of borrowing more at a time of economic uncertainty, with the pandemic still ongoing.

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The Conservative-run council’s debt stood at £545 million in April of this year, with another £443 million of borrowing included in the revised capital programme.

Fenton East councillor Paul Shotton said: “In some respects, I really welcome this report. It’s great to see such massive amounts of capital investment going on in the city, and the individual projects are all very commendable.

The capital programme also includes the city's new full fibre network
The capital programme also includes the city’s new full fibre network

“Unfortunately, I can’t support this. This is for reasons we have discussed at budget over several years. It relates to the massive increases in the council’s overall borrowing.

“In 2014, the council had total borrowing of £299 million. At the end of year 2019/20, that had increased to £545 million. So, in six years, borrowing has almost doubled.

“While in a recession when interest rates are low, the economic view is that you should borrow to invest. My concern is that we’ve seen so many large businesses going bankrupt, we’ve even seen councils effectively going bankrupt. I’d much prefer to see these decisions deferred until the city is more certain about the longer term economic stability.”

These are some of the schemes listed on the updated general fund capital programme, 2020/21 – 2024/25:

  • Transforming Cities Tranche 2 (including Stoke Station revamp) – £50.3 million
  • Private Sector Housing Company (Fortior Homes) phases 1 and 2 – £41.7 million
  • Access Links to Etruria Valley – £38.3 million
  • Strategic Asset Investment – £28.9 million
  • Capitalised Highways Works – £23.3 million
  • Smithfield multi-storey car park – £15 million
  • Vehicle & Plant Replacement £13.1 million
  • District Heat Network – £10.5 million
  • Full Fibre Network – £9.3 million
  • City East Link Road – £9.1 million.

City Independent councillor Joanne Powell-Beckett, who recently served as cabinet member for housing, also raised concerns about debt.

She said: “I’ve got concerns about increasing borrowing in the current climate. Nobody wants to stand in the way of progress and improving the city, but we are in unprecedented times, with huge financial pressures on the authority. Covid and lockdown have left a black hole in the council’s finances.”

The capital programme includes dozens of different schemes, funded through a mixture of borrowing and external grants.

One of the biggest projects is the £50.3 million Transforming Cities scheme, which includes the Stoke station works, along with new bus routes. This will be mostly funded through a gGovernment grant, which is expected to be confirmed soon.

How the revamped Stoke Station could look
How the revamped Stoke station could look

Other schemes include the forthcoming District Heat Network, the Full Fibre network, the long-awaited City East Link Road and the Smithfield multi-storey car park in Hanley.

Dan Jellyman, cabinet member for regeneration, defended the scale of the capital programme, saying the investment was needed to help the city progress.

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He accused the ‘radical left’ of standing in the way of ‘making Stoke-on-Trent great again’.

Mr Jellyman said: “I suppose it’s no surprise, it’s like Groundhog Day when we hear the Labour group’s radical left agenda for keeping Stoke-on-Trent in its place. They don’t want us to progress, they don’t want us to thrive, and they’re happy to never borrow any money to make it happen.

“The fact is, since 2015 we’ve been investing in this city for great gains and we’ve been making them. We need to build back, particularly coming out of the pandemic. Now is the time to invest, even more so, in our city with everything that’s going on nationally and internationally.

“They always say the same thing. They say, ‘We kind of support investment, but we can’t vote for it’. Because they’re radical left, they don’t want Stoke-on-Trent to progress. They want to keep Stoke-on-Trent in its place because they know that’s to their political advantage. It’s absolutely sickening.”

The proposed new link road to Festival Way

The capital programme includes £423 million in the general fund category and £322 million relating to council housing.

While the total proposed spending in the capital programme has now increased, a number of schemes have been pushed back due to the pandemic, meaning the amount being spent in the current year has been reduced by £79.6 million.





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