Northumberland County Council’s debt fell by £21.3million in the first half of this financial year, but still totals £750million – with annual interest costs of more than £23million.
By the end of 2018-19, the overall borrowing figure is expected to increase by a further £14million, but this is £61million less than originally forecast, following a recent review of this year’s capital programme.
It is was originally envisaged that there would be around £202million of capital expenditure in 2018-19, but the annual total is now forecast to be £80million less than this, with just under £48million spent in the first six months.
The reduced need to borrow will also result in an overall saving of around £1.8million against the original interest-payable budget of £23.6million.
The treasury management mid-year review, presented to last week’s audit committee meeting, also reported that one of the repayments during the period from April 1 to September 30 was the early settlement of a £15million loan, which will save the council £6.5million.
The proposed strategy for 2018-19 was to postpone borrowing and, wherever possible, to use investment balances to repay debt and fund capital expenditure.
This has meant that the council’s overall external investments (excluding cash) dropped during the first six months of the year from £150.4million to £127.2million and are forecast to fall by another £60-70million by the end of March next year.
However, despite the decrease in investments, the interest from them is set to be £460,000 higher than expected by year-end, thanks to higher balances and interest rates.
Ben O'Connell, Local Democracy Reporting Service