Question
The Leader of the Opposition has recently been sending a leaflet to homes across the Borough claiming that the Council’s debt is £700 million. Could the Leader of the Council set out what our debt situation actually is, including where borrowing is generating revenue income to pay for our vital services?
Minutes:
The Leader of the Opposition has recently been sending a leaflet to homes across the Borough claiming that the Council’s debt is £700 million. Could the Leader of the Council set out what our debt situation actually is, including where borrowing is generating revenue income to pay for our vital services?
Answer
I am indeed aware of such a letter that has been sent out to households across the Borough sent by the Leader of the Opposition, Lindsay Ferris. I was shocked and distraught that such alarming and incredulous mistruths are being infiltrated across our community, especially at a time when it is so important we demonstrate calm and assured leadership to engender assurance and confidence in the work of our Council.
Rather than make up fanciful figures intended to alarm our residents in the way Lindsay has chosen to do, let me focus on the facts and the truth. Although I appreciate that it is often extremely inconvenient to the scaremongers amongst us when I do so. I refer you to the recently published Mid-Year Treasury Management Report to be considered by the Audit Committee in November and Executive in November. It is written by our statutory Chief Finance Officer (CFO) and Deputy Chief Executive, the single person in the Council charged to be aware of and report on the veracity of our Financial Management and Financial Standing.
Our CFO’s report states that the real external debt in relation to our Council Taxpayers as at 30th September 2020 is £324m which reduces to only £83m net indebtedness after deducting the money we lend out ourselves to others. This means that the figure in Lindsay’s statement is overstated by at least £376m if I wanted to be generous but, in reality the true measure of his overstatement is £617m. Yes, that’s right Councillors, Lindsay has written to our residents overstating the Council’s position of indebtedness by £617m, which is two years of Council receipts.
Furthermore, he goes on to state that our borrowing activities are costing our Council Taxpayers (or households) £10,000 each. Turning again to the facts contained in the Mid-Year Treasury Management Report, our CFO says that the financial impact on Council taxpayers is not £10,000 per Council taxpayer but is, in fact, £7.52 for a Band D payer. This is an incredulous overstatement by Lindsay of 133,000 percent.
Moving to your specific point, the income from our investment activities financed by borrowing, are also set out in the Treasury Management Report. It shows that over £7.2m per annum is generated from one form or another, most of this attributable to the acquisition of commercial assets and our Wokingham Town Centre Regeneration. Those of you involved in the O&S Scrutiny of our budget preparations will be aware that this figure of £7.2m p.a. income is projected to increase substantially. In addition to this significant and vital income stream needed to fund our essential services, we do of course retain the assets which could be sold to cover off debt if we needed to. Against our net indebtedness figure of £83m we have realisable assets currently valued at over £500m, or just under £200m if we take the narrowest focus of purely commercial assets.
Supplementary Question
Would you agree that the Council is in safe hands and the administration is steering a steady course through these turbulent and uncharted waters?
Supplementary Answer
It is clear that our borrowing and investment activities are extremely well managed and through this we are serving our community well through the creation of vital income streams that would otherwise necessitate the draconian cutting of services we provide for our residents. At the same time we are clearly also creating a sizeable asset base that we always have the opportunity to turn into cash if we need to.
I would like to commend the Conservative Finance Lead Members over the years, particularly the current incumbent John Kaiser together with our very experienced and capable CFO, Graham Ebers, for getting us to such a solid and strong financial position. On the other hand I can only shake my head in despair at the destabilising, desperate and deceitful attempts of the opposition. It is irresponsible and brings the Council, together with all those that serve it, into disrepute. Sometimes politics can stray into some shameful and questionably ethical places, and I am sad to say this is one such occasion. Our residents deserve better.
We are determined to support those in need in the Borough during this period and to eliminate poverty in the Borough. Profligacy would not enable us to do so. Sound financial management from this Conservative administration does enable us to direct funds and efforts to those in need whilst maintaining our services as business as usual.