St Helens Council says borrowing  'affordable' as debt stands at £140m

The Labour-run authority confirmed the borrowing supports its regeneration and long-term investment in its capital assets including highways, street lighting, schools, leisure facilities, vehicle fleet, crematoria and other operational buildings.

The council has been asked whether it is comfortable with its current level of debt – and if it expects to increase its level of debt significantly in the coming years.

It has also explained how money for infrastructure developments - such as on roads and buildings - is from a pot of money called capital funding, which comes from the likes of grants and borrowing.

Money for services such as adult social care needs will be met through revenue funding, which comes from council tax and business rates. 

What the council is saying

In response, to the question about its current level of debt, ​Cllr Martin Bond, the council’s cabinet member for finance and governance, said: “The council has an approved capital programme which has committed resources to support schemes for 2022-23 and future years.

“The council has ambitious capital plans over the medium term, including its commitment to the regeneration of the borough, bringing iconic buildings back into use, including the Gamble and Earlestown Town Hall, and modernisation of service delivery.

“​Financial management and governance arrangements will ensure that the council’s level of borrowing remains affordable, prudent and sustainable and aligned to its strategic priorities and objectives.”

Cllr Martin Bond

Funding investments

Council face costs to borrow the money to funds their investments.

St Helens Council says it is having to pay £5.1 million as a result of borrowing the money which makes up its debt.

It confirmed that these costs are being paid and are not being added to the level of debt.

What about neighbouring councils?

Some councils are borrowing huge sums of money to invest, in a bid to generate revenue to go towards services amid cuts from the Government.

Concerns continue to be raised over neighbouring Warrington Borough Council’s level of debt.

The Labour-run council’s debt was highlighted at a recent extraordinary council meeting, where it was stated that it currently totals £1.65 billion.

The authority has borrowed huge sums of money to make investments – including deals to buy properties, which it then receives rental income from.

But Warrington Council leader Cllr Russ Bowden has defended the council’s investment strategy and says, this year, the council’s investments are set to produce £25.5 million in revenue – which the council can use to keep "Warrington’s services safe from Conservative cuts".

Regeneration central to St Helens Council’s three-year financial plan

In St Helens Borough Council’s Medium Term Financial Plan it sets out "once-in-a-lifetime transformational plans, huge infrastructure projects and investment in schools" which are among the big projects that funding has been earmarked

The projects are part of the council’s capital spending programme which totals more than £150m in the schemes that deliver a range of benefits for the borough, from new developments to invest-to-save schemes that will support the council’s operations.

Council budget: the difference between revenue and capital funding

Cllr Bond said: “It’s vital we make sure that we are financially prudent and focus on balancing our budget.

"We continue to face growing financial pressures in areas like adult social care without the appropriate funding to help use address these issues which all impact on how we can spend our money to deliver the most.

“This Medium-Term Financial Plan sets out how we plan to make sure that we continue to deliver those essential services and look at the potential situations we will find ourselves in over the coming years, which has been difficult due to Central Government once again only giving us a one-year funding arrangement yet again.

"But it is vital as a council we try to predict what demand and revenue might be to help us prepare for the future.

“Many people may question why we cannot just spend money on road infrastructure on other services like adult social care.

"But the way council finances work means that ​spending on road infrastructure comes from a pot of money called capital funding which comes from the likes of grants and borrowing, while adult social care needs will be met through revenue funding which comes from council tax and business rates. 

“Capital and revenue funding are two separate funding streams that cover different types of work.

"Revenue is day-to-day spend used to run services like the cost of running our refuse vehicles or salaries for social workers whereas capital is usually bigger investment like maintaining our roads or building schools.

“As a council we can’t use that capital money for the everyday essentials, but we can invest in our transformational programme of work such as school improvements, better transport infrastructure and projects like Glass Futures and regeneration of St Helens and Earlestown town centres.

"This plan also shows that as a council we mean business in delivering these much needed schemes which will help us meet our priorities and improve residents lives in this borough.” 

The medium-term Financial Plan will now go to Council on March 2 for final approval by councillors.