EXCLUSIVE: LAMBETH LOAN DEBT CLAIMS DON’T STAND UP TO SCRUTINY – (and it’s £700 million they owe, not £417 million)
More than half of Lambeth council’s debt of just over £700 million has been incurred when Labour controlled the borough’s purse strings, News From Crystal Palace can reveal today.
The figures have been obtained under the Freedom of Information Act following claims by a senior Lambeth Labour councillor that the borough’s debt problems had been “dramatically increased” by the previous Conservative / Liberal Democrat coalition.
Cllr Paul McGlone, deputy leader investment and partnerships, in a written answer to the council’s full meeting in October 2016, said:
“Since 2006, after taking over from a Tory-Lib Dem coalition that had dramatically increased the debt of the council, this administration has effectively managed its finances to use our own cash balances rather than taking on external debt, and worked hard to reduce the historic burden of high debt in the borough.”
But figures obtained by News From Crystal Palace under a Freedom of Information request show that the vast majority of debts owed by Lambeth to the Public Works Loan Board were incurred WHEN LABOUR was in control of Lambeth council between 1998 and 2000.
And the amount of debt Lambeth owe to the PWLB (a Government body whose function is to lend money to local authorities and to collect the repayments) is just over £700 million – far more than the figure of £417 million given in the recent report by Debt Resistance UK.*
The figures also show that the four loans totalling just under £105 million taken out by the Conservative / Liberal Democrat coalition between August 2002 and January 2006, at current rates of between 3.7 per cent and 4.75 per cent, are due for repayment in the years 2027 (two) and 2035 (two).
But the £395.8 million worth of loans taken out by the Labour – controlled administration between 1998 and 2000 have two final payment dates of 2054 AD, two of 2058 AD and one of 2059 AD. Current rates of interest on the 20 loans made by the PWLB during that period range from 4.5 pc (four) to 5.5 pc (two).
The figures also show that, of the other outstanding debts, there are two loans outstanding from 1990 when the council was under Labour control totalling £20 million at rates of 10.265 pc of which more than £11 million is still owed. Of these debts one is repayable by October 2017, the other by October 2018.
During the 1994 to 1998 period when the council was under no overall control (Labour 24 cllrs, Lib Dem 24 cllrs, Cons 16 cllrs) six loans totalling £182 million were made by the PWLB at current rates of between 6.5 pc and 8.125 pc. Final payment dates on these range from 2045 AD (one) to three in 2057 AD.
Figures obtained under the FOI request show that no further loans have been made by the PWLB to Lambeth since January 2006. The PWLB also provides details regarding each loan advanced via their website from October 2010 to date. The information can be found under Monthly Loans Report.
News From Crystal Palace would be interested to hear from any Conservative or Liberal Democrat councillor at the time of the coalition as to what loans were needed for.
Note: Lambeth only owe monies to the PWLB. Some local authorities do owe money to finance companies.
*“COUNCILS SPENDING MILLIONS OF COUNCIL TAX INCOME ON INTEREST DEBT REPAYMENTS” – REPORT September 20, 2016
