Barking and Dagenham to double external borrowing
0London Borough of Barking and Dagenham anticipates that external debt will rise from just over £595m 2018/19 to almost £1,229m in 2022/23, in order to fund its investment and acquisitions strategy (IAS).
In the past, the council maintained very little indebtedness, being either debt-free or with a very low level of borrowings.
This changed in 2012 when as part of housing revenue account (HRA) reform, £265.9m of debt was transferred to the council’s HRA.
Barking and Dagenham then borrowed £89m from the EIB in 2015 to fund its regeneration projects Abbey Road 2 and Gascoigne East.
In November 2016 the council’s cabinet approved its IAS with a £250m investment budget and a £100m land and property acquisition budget.
The council’s investment strategy aims to secure future revenue for the council and to stimulate economic growth.
The IAS has a target of an annual income stream of £5.12m by 2020/21, to be achieved largely through the council’s development vehicle Be First.
The pipeline contains 44 possible projects over 15 years with total capital expenditure estimated at over £2bn, though net capital expenditure which takes into account payments to the council from private sales and shared ownership will be significantly less than this.
The main source of funding will be borrowing, though receipts from land sales will also help pay for development costs.
The council says that the borough’s population is forecast to rise to 220,000 by next year, and that the subsequent increase in demand for council services combined with a falling budget will result in a cumulative shortfall of £63m.
The population is expected to keep on growing, reaching 275,000 by 2037.
