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Council budget plan pushes borrowing debt up to £218m
HEREFORDSHIRE Council's backing for budget that pushes its borrowing debt up to £218m hinges on "money to burn".
Barring an unprecedented revolt at full council tomorrow (Friday), that budget raises the average council tax bill to £1,250 and makes £15.4m in service and grant cuts.
The revolt could come over support for the energy from waste (EfW) incinerator - shared with Worcestershire County Council (WCC) - and the £40m it will cost the council over the next three years.
In backing the 2014-15 budget plan, members are, in turn, asked to approve the borrowing of that £40m over three years to help fund the £165m EfW plant at Hartlebury near Stourport.
Loan costs will be paid by the contract partner Mercia Waste Management until the 2022-23
contract close, leaving an outstanding loan balance of £31m.
Loan repayment costs will continue to be financed from the waste disposal budget until 2040-41.
The plan's associated treasury management strategy estimates council borrowing increasing by £50.8m over 2014/15 pushing the overall debt up from £167.4m to £218.2m. That projected increase includes £11m borrowed over the year for the incinerator.
WCC has already voted the incinerator and its own share of the funding through.
Last month, Herefordshire Council's cabinet authorised “all necessary steps” to be taken in securing £40m from the Public Works Loans Board (PWLB), but the final decision lies with the full council currently tied at 29-29.
Other key elements for budget plan presented tomorrow are:
• A below inflation council tax increase of 1.9% - just short of the 2% referendum trigger - pushing the Band D (average) bill up to £1,251.32
• The council’s need to save £33m by 2016/17 and £15.4m over 2014/15 alone - in addition to the £34m savings required in the previous three financial years.
• A proposed 2014/15 capital programme totalling £85.3m and funded by borrowing (£57.2m), grants (£24.9m) and the capital receipts reserve (£3.2m).
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