THE COUNCIL’S debt works out at about £7.60 per resident and not £10,000 per household.
That’s the view of Cllr John Kaiser, Wokingham Borough Council’s executive member for finance, who says that Lib Dems’ financial concerns – raised at a recent Council meeting – were “hogwash”.
Opposition deputy leader Cllr Clive Jones said that the council debt was closer to £700 million, rising from £400 million in 2017.
“You continued to borrow more and to spend it on more speculative commercial property ventures,” he said.
“Our residents would be horrified to learn that this debt is now hurtling towards £10,000 for every house in Borough.”
But these figures are disputed by Conservative councillors, who feel that their finanical management is prudent and the debt levels are both lower and manageable. They could even be paid off tomorrow if the council wanted to do so.
Speaking to Wokingham .Today, Cllr Kaiser added that the council’s assets are worth around £1 billion, while its external borrowings are £264 million.
“We are not a council that is going to go broke,” he said. “A broke council is no good to anybody. We’re a long way from that point.
“If we wanted to, we could use our own investments to pay off our debt, but some of the bonds we’ve got are the government’s own, it’s the cheapest way we can borrow money.
“With any investment that we’ve got, we’re looking to get our money back with the best return we can.
“For instance, if we lend to another council, that is under-written by the government, even if that council gets into (financial) trouble.
“There is no chance of a repeat of the Iceland situation (where councils, charities and emergency services lost around £1 billion when the country went bankrupt in 2008).
“We do not go for risky investments, we’re no different to any pension fund. We would not risk people’s pensions by putting them into investments where you could lose substantial amounts of money.”
One of the borrowings that the council has made has been £83 million for new social housing stock. Cllr Kaiser said that this was worthwhile, as they will generate funding.
“Each one of those social homes, we rent out and it pays its own debt, and pays for those council houses to be repaired and replaced,” he said.
Coronavirus has impacted on the council’s budgets, but Cllr Kaiser is confident that the council will be able to weather the storm.
“We went into Covid with a pretty good reserve,” he said. “We have the highest reserves of any unitary authority in the country. That means we’ve been able to help people with PPE, such as in care homes, in schools. We acquired PPE to support those people.
“We could put up our costs, but there’s no point putting up our costs to people who can’t afford it, so we will be fairly restrained in what we do in the new budget going forward.
“But when we come to the end of this (financial) year, we still believe, looking at the numbers, we are going to end up with more than adequate reserves.”
Cllr Kaiser said that the financial picture was helped by the council’s three housing companies all making a profit this year, but it’s not all been plain sailing as the coronavirus has caused additional spending to protect services.
“We know that we are going to have to cut waste significantly, it’s about prudent financial management as much as anything else,” he said.
“The council has had help, but we’ve had some problems where we haven’t, such as leisure facilities. We are still negotiating with the government to try and get some money to help us, but we’ve managed to re-open those facilities and offer the best service we possibly can.
“Touch wood, we haven’t been hit as hard as we thought we would in the town centre – we are still signing (new businesses) to take leases there.”
He added: “I guess the only reason that we’ve got the reserves is that we have managed the council quite successfully over the years.
“It’s good financial management, it’s professional financial management – the officers have a really clear understanding of what they’re doing.”
