Wokingham Borough Council has acted to clarify the situation regarding loans it has both made and received to other local authorities, and to dismiss suggestions that it had lost money on the deals.
Responding to an enquiry from Wokingham Today, executive member for finance Imogen Shepherd-Dubey said: “To be clear, the loan to Woking Borough Council gained Wokingham Borough residents £356,575.34, and the money was never at risk.
“This money will help fund our services, such as libraries, school transport and road maintenance.
“Subsequently, there were two follow-up letters in Wokingham Today on March 24, making an additional accusation about money being lost by Wokingham Borough Council on a loan taken in June 2023.
“The author missed the point that the money from this loan was re-loaned at a higher rate.
“We very much welcome scrutiny of our finances, but it does need to be well-informed rather than naïve and misleading, because that can cause unnecessary worry for our staff and residents.
“The bottom line is that we made sound decisions that have benefited local residents on these borrowing and lending arrangements.”
A council spokesperson added: “Local authority finances are complex, and we have to balance longer-term commitments with short-term needs and income.
“On this occasion, we secured advanced borrowing of £10 million in November 2022 because of an expected need for cashflow later during 2023, and because we understood interest rates would continue to rise – making borrowing later more expensive.
“As a result of our ongoing efforts to reduce and postpone our Capital Expenditure requirements, we did not need the £10 million borrowed in November 2022 and so, in the summer of 2023, we were able to lend it out at a higher rate of interest than we had borrowed it.
“This provided a net gain.”
