Peterborough council accused of ‘begging’ after borrowing £60m from other authorities
More than £60 million has been borrowed by Peterborough City Council from other local authorities, leading to accusations that the authority is taking out a ‘begging bowl’.
The claim was made by the leader of the council’s opposition Labour group, Cllr Shaz Nawaz, who accused the authority of not getting its finances in order.
The council said borrowing between local authorities was “very common” due to the low interest rates which it said are “far better than you could achieve in the private sector”.
However, Cllr Nawaz said it “made no sense” for the council to borrow so much from other local authorities when it is itself loaning £23 million to Empower Community Management LLP for a solar panel scheme and £15 million to developers to build a new Hilton hotel at the Fletton Quays development.
The Empower loan has yet to be repaid despite being due more than two years ago.
The Labour group leader said: “The administration is owed £23 million by Empower and is loaning £15 million for the Hilton Hotel. Yet it has borrowings of just over £60 million from other authorities. This makes so sense whatsoever.
“Why loan money to Empower and for the Hilton Hotel when you’re having to borrow money from elsewhere for your own capital programmes? Why not use the money we loaned to Empower and Hilton?
“Worse still, what it shows is that, apparently, other authorities are in a better financial situation compared to Peterborough – that’s why they are loaning money to us in the first place. Once again we are going around taking the bowl and going begging to other councils because we did not get our finances in order.”
The council currently does not lend money to any other local authorities.
Peter Carpenter, council acting corporate director for resources, said: “Borrowing between local authorities is very common and is something that many councils choose to do as it provides a cost-effective way to borrow money short term. The interest rates you can offer and receive are far better than you could achieve in the private sector.”
The £60.5 million figure is dwarfed by the £313 million borrowed by Cambridgeshire County Council, albeit it covers a much bigger area.
A county council spokesperson said: “Like many councils we routinely have a number of loans from other local authorities as part of the financing for our capital programme such as building local infrastructure and schools.”
Money being borrowed by Peterborough City Council from other local authorities
London Borough of Newham - £7.5m
Cornwall Council - £5m
Hampshire County Council - £9m
Hampshire Police and Crime Commissioner - £1m
Manchester City Council - £18m
Bristol City Council - £5m
Wiltshire County Council - £5m
London Borough of Redbridge - £5m
West Midlands Combined Authority - £5m
Total - £60.5m