LAMBETH COUNCIL AND THE BORROWED £19.7 MILLION – A MYSTERY SOLVED (and another Freedom of Information question by News From Crystal Palace answered)

Lambeth council have answered the mystery of where they had borrowed £19.7 million from for buyback funding for estate regeneration under their hugely controversial ‘Homes for Lambeth’ plans.

Er – they haven’t actually borrowed the money YET.

A Freedom of Information request by News From Crystal Palace asked:

In a council report headed estate regeneration. Buyback funding, paragraph 1.3 states that £19.7 million was committed in December 2017 by means of Public Works Loan Board. (PWLB) Borrowing. The PWLB state that they did not lend this money to Lambeth.

Please state from where this money was borrowed, at what rate and over what time the money is to be repaid.

Lambeth’s  response:

The report approved expenditure of £19.7m with the expected funding source being borrowing from the Public Works Loan Board.

The council will only borrow the money if required once the expenditure takes place, otherwise it will incur unnecessary interest costs. In the case of buy-backs of leaseholder properties the expenditure will take place across a period of many months and potentially years and so the £19.7m will not be borrowed in one transaction.

When undertaking capital expenditure the Council will look at the funding requirements and options across the council’s capital programme and will use other funding sources, such as capital receipts if possible in the short-term to avoid incurring borrowing costs. When borrowing is required it will most likely relate to more than one project and thus the amounts borrowed will not necessarily match individual scheme requirements.

Current PWLB rates can be found at the attached link.
https://www.dmo.gov.uk/responsibilities/local-authority-lending-pwlb/interest-rates

(Note: Further reading: “LABOUR PLAN £10 MILLION EARLY BUY-BACK OF DEMOLITION-THREATENED HOMES – AND PUBLIC WORKS LOAN BOARD SAY THEY HAVEN’T LENT LAMBETH £19.7 MILLION 13th September 2018)

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