Powys’s Treasury Management Statement says that £37.9m of longer-term borrowing has taken place this financial year so far, with a further £30m to £40m expected by year-end.
The authority had outstanding longer-term debt of £251.4m at end-March 2018, which left it under-borrowed by £73.1m in relation to its capital financing requirement.
Powys has been using cash reserves over the past few years, which it describes as a “prudent and cost-effective approach”, but council officers have advised it is now necessary for the council to borrow in stages over the next few years.
The TMS also said that in November the council was contacted by the lender behind one of its LOBO loans, saying that it intended to sell the loan, but inviting the council to bid for it themselves.
Powys’s bid was successful.
The buy-out occurred at a ‘premium cost’ but resulted in an overall revenue saving over the remaining 30-year life of the loan, with the interest saved being greater than the premium cost.
