SPECIAL FEATURE by EWAN LAMB
As Scottish Borders Council prepares to hit its hard-pressed residents with a maximum tax rise of well over four per cent for 2020/2021, many of the recipients of the local authority's demands will be unaware of the vast sums being swallowed up to service huge debts linked to decades of borrowing.
It may sound incredible, but the £14.366 million needed in 2019/20 to cover the cost of no fewer than 55 separate active loans with the Public Works Loans Board (PWLB) equates to 29.9% of the total raised in the Borders from council tax.
The Scottish Government expects the local tax to produce £47.965 million for SBC over the coming financial year. So when a further £10.999 million is added to the debt pile to settle the annual 'invoice' for Berwickshire's three PPP schools the total cost of interest charges and repayments reaches a somewhat staggering 52.88% of the local tax take.
There has been little if any mention of SBC's crippling financial liabilities and indebtedness during the recent budget discussions which centred on the apparent meanness of the SNP-led Government which has virtually forced the Tory controlled local authority to cut services and axe jobs yet again.
A modicum of research among the online files at PWLB produced a picture which shows many of those long-term loans will not be paid off until the 2050s. It should be said that virtually every Scottish local authority is burdened with debt, but that will be small comfort for present and future generations of Borders council taxpayers.
Meanwhile, a glance at the council's own annual accounts shows how the costs associated with debt servicing have spiralled over the last ten years.
In 2008/9 interest paid on council borrowing amounted to £11.652 million , more than £2.5 million less than that £14.366 million paid out in 2018/19.
And ten years ago the council held loans worth £122.842 million from PWLB. That compares with 2019's 55 outstanding loans with an outstanding balance of £159.631 million.
The so-called fair value of council loans with the Board back in 2009 is recorded as £159.060 million. The equivalent figure last year stood at £297.656 million.
The fair value of the council's total financial liabilities a decade ago was £248.549 million. The latest figure suggests the overall liability has now reached £365.780 million.
Local government debt in Scotland runs into many billions of pounds, yet all concerned seem content to allow the staggering amounts owed to the PWLB and others go on increasing. It is difficult to see how any firm in the private sector with a similar financial profile could remain in business.
For the information of Borders council taxpayers here is the complete list of loans currently held by SBC from the PWLB which were included in the Board's files at March 31st 2019. The chart shows the loan number on the PWLB register; when the final payment is due; the outstanding balance; the percentage interest rate*; and the year end value of each loan.
Number Final payment Balance £s 2019 *% rate Year end Value £
470742 May 2020 285,835 10.25 327,867
470743 Nov 2020 285,835 10.25 341,607
471165 Apr 2021 1,015,632 10.625 1,272,809
473501 May 2053 507,816 8.0 1,432,630
473605 May 2053 60,839 7.875 169,547
474006 Nov 2053 1,354,176 7.0 3,478,893
475853 Apr 2021 1,015,632 8.5 1,219,132
475858 Nov 2021 370,611 8.5 458,987
475862 Nov 2022 381,114 8.5 501,372
475865 Nov 2023 381,114 8.5 530,174
475882 Nov 2024 381,114 8.5 558,232
475883 Nov 2020 190,557 8.5 221,100
475969 Nov 2021 381,114 8.25 469,159
475970 Nov 2022 381,114 8.25 497,602
475971 Nov 2023 190,557 8.25 262,739
476010 Apr 2022 1,015,632 8.125 1,285,118
476642 Oct 2055 2,031,264 8.0 5,982,517
476907 Nov 2055 2,031,264 8.0 5,972,548
478024 May 2055 1,692,720 8.25 5,064,965
478025 May 2055 1,692,720 8.25 5,064,965
478026 May 2055 1,692,720 8.25 5,064,965
478027 May 2055 1,692,720 8.25 5,064,965
478169 May 2054 677,088 8.125 1,969,448
478170 May 2054 677,088 8.125 1,969,448
478599 Nov 2053 1,963,556 7.75 5,454,193
478761 Nov 2051 2,288,994 7.375 5,912,770
478857 May 2051 1,354,176 7.375 3,472,477
479394 May 2057 1,354,176 7.125 3,722,897
479395 May 2057 1,354,176 7.125 3,722,897
479396 May 2057 1,354,176 7.125 3,722,897
479397 May 2057 1,354,176 7.125 3,722,897
479398 May 2057 1,354,176 7.125 2,722,897
479716 Apr 2027 1,291,858 7.0 1,957,757
479781 May 2026 1,608,589 6.875 2,335,074
479782 May 2047 3,385,441 6.875 7,688,490
480070 May 2057 1,354,176 6.375 3,416,679
480318 Nov 2047 2,350,104 6.25 5,031,012
480319 Nov 2034 1,354,176 6.25 2,898,968
480563 Nov 2052 1,481,383 6.0 3,343,968
481031 May 2055 2,708,353 5.375 5,858,345
481457 May 2054 2,071,264 4.875 4,047,972
483700 Nov 2057 1,692,720 4.875 3,523,166
483701 Nov 2057 1,692,720 4.875 3,523,166
483770 Nov 2054 2,031,264 5.25 4,286,859
483790 May 2054 1,354,176 5.125 2,794,052
485625 May 2061 3,031,233 5.125 6,807,011
493171 Nov 2052 10,000,000 4.4 18,227,429
493289 Nov 2052 24,000,000 4.6 45,049,586
494042 Nov 2052 24,000,000 4.6 45,049,586
494179 Nov 2057 2,000,000 4.48 3,922,179
499225 Dec 2021 7,500,000 3.36 8,137,956
505435 Sep 2026 4,000.000 1.49 4,221,646
505745 Feb 2027 8,000,000 2.05 8,805,943
506017 Mar 2027 10,000,000 1.9 10,884,788
508149 Dec 2048 10,000,000 2.74 13,188,542
*Some interest rates are discounted.
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