• Home
  • About
  • Subscribe
  • Conference
  • Events Calendar
  • Webcast151
  • MOTB
  • Log In
  • Register

Room 151

  • Treasury
  • Technical
  • Funding
  • Resources
  • LGPS
  • Development
  • 151 News
  • Blogs
    • David Green
    • Agent 151
    • Dan Bates
    • Richard Harbord
    • Stephen Sheen
    • James Bevan
    • Steve Bishop
    • Cllr John Clancy
    • David Crum
    • Graham Liddell
    • Ian O’Donnell
    • Jackie Shute
  • Interviews

Kingston borrows £40m for Crossrail property investment

0
  • by Colin Marrs
  • in 151 News · Development · Treasury
  • — 2 Aug, 2017

London Borough of Kingston has borrowed £40m through the Public Works Loan Board (PWLB) – the largest loan taken by a council out of July’s total lending of £125m.

Kingston has taken the cash in eight loans ranging from £3m to £10m, with durations of between 13 and 34 years.

The council will spend the money on the purchase of King’s Place and Conquest House, an office and retail block in Kingston town centre. The purchase was approved by council committees during June.

A report to councillors said: “Strategically the property is seen as a potentially important asset in Kingston’s future development strategy sitting at the heart of two specific areas of development, together with the land in between with unrivalled proximity to the station which will enable the borough to shape the arrival of Crossrail 2 and influence the overall future development of this area of the Borough.”

The July total for PWLB lending was down £100m from the £223m forwarded to local authorities during June.

Other significant borrowing by councils through PWLB in July included £14m to Torbay Borough Council and £10m to Chiltern District Council, Swindon Borough Council and Nottinghamshire County Council.

In recent months, concern has been growing that local authorities are borrowing millions of pounds from PWLB to buy commercial property and create income streams to prop up services.

In April, before becoming Liberal Democrat leader, Vince Cable said that borrowing by councils to fund property purchases was “not a wise and sensible thing to do”.

He told The Guardian: “Local authorities have a long and inglorious history of gambling in financial and property markets.”

Separately, PWLB has also released its 2016-17 annual report, showing a rise in the value of new loans made from £3bn in 2015-16 to £3.6bn. The majority – around £3bn of this year’s total was made up from maturity loans, according to PWLB.

Year on year, the PWLB’s interest income decreased by £94m. Contractual interest income decreased by £10m and premiums received decreased by £84m.

The average length of loans grew slightly during the past year – up from 22.8 years in March 2016 to 23 years in March 2017.

Only £1m of variable rate loans were advanced, with the vast bulk being fixed rate borrowing.

£3.3bn of the PWLB’s advances in 2016-2017 were made at the certainty rate, £256m at the project rate and £19m at the standard rate.

The total sum of early repayments made during the year was just £55m, down from £282m the previous year. The PWLB now holds £66.6bn in outstanding loans, compared to 64.8bn during the previous year.

Get the Room151 Newsletter

Share

You may also like...

  • LGPS temporarily halts pension transfers LGPS temporarily halts pension transfers 28 Nov, 2018
  • David Green: Faster, faster on final accounts David Green: Faster, faster on final accounts 13 Feb, 2017
  • David Green: Miffed over MiFID David Green: Miffed over MiFID 23 Jun, 2015
  • James Bevan: ECB and the euro James Bevan: ECB and the euro 26 Oct, 2015

Leave a Reply Cancel reply

You must be logged in to post a comment.

  • Register to become a Room151 user

  • Latest tweets

    Room151 32 mins ago

    Helen Randall: Spelthorne report places spotlight on ‘controls’: Fresh criticism of Spelthorne Council raises the question of what “good” controls look like when negotiating a property deal. Spelthorne Council’s continuing debacle over property… dlvr.it/RtSPhy pic.twitter.com/9uCOJgBcH6

    Room151 32 mins ago

    Step-out strategies: Hitting the sweet spot between liquidity and ultra-short duration: Sponsored article: Jemma Clee describes how an ultra-short duration strategy can help local authorities enhance returns. Despite the expectation of a low, and… dlvr.it/RtSPZb pic.twitter.com/pdXPpv5lcN

    Room151 1 day ago

    What role will climate change have on the pricing of government bonds?: Sponsored article: Kerry Duffain finds that “vulnerability and resilience to climate change” have a significant impact on the cost of government borrowing. Ardea Investment… dlvr.it/RtNKv7 pic.twitter.com/wDjT31x4Yt

    Room151 2 days ago

    ESGenius: Slashing emissions will fuel green growth for decades: Sponsored article: Velislava Dimitrova argues that a big enough investment could mean transition to a low, or no, carbon economy can become a reality. The world needs to slash carbon[...] dlvr.it/RtKZJp pic.twitter.com/cd8S3ijERl

    Room151 2 days ago

    Prudential code: “Not perfect, but its heart is in the right place”: The new Prudential Code offers revised rules for borrowing. Nikki Bishop is sceptical it will work while Gary Fielding offers his support. Nikki Bishop I have been asked to give[...] dlvr.it/RtKZFh pic.twitter.com/OriN28lXcb

    Room151 3 days ago

    Tremendous report from @MarkSandford3 citing @room_151 no fewer than six times (despite what the @lgcplus fact checking/counting dept might tell you) #localgov commonslibrary.parliament.uk/research-brief… 1/5

    Room151 1 week ago

    Dan Bates: Capitalisation directions are not the only tool for rebuilding finances: Dan Bates argues deep seated problems are contributing to a rush for capitalisation directions. For some time now we have been reading that a number of councils are in… dlvr.it/RspKff pic.twitter.com/xRRsgVim9u

    Room151 2 weeks ago

    Is local government funding “broken”?: Andrew Hardingham looks at the underlying issues that caused more than a third of respondents in the Room151/CCLA treasury survey to say that the funding system for local govenrment is[...] dlvr.it/RsYhsg pic.twitter.com/plNp7Ayys6

  • Categories

    • 151 News
    • Agent 151
    • Blogs
    • Chris Buss
    • Cllr John Clancy
    • Dan Bates
    • David Crum
    • David Green
    • Development
    • Forum
    • Funding
    • Graham Liddell
    • Ian O'Donnell
    • Interviews
    • Jackie Shute
    • James Bevan
    • Jobs
    • LGPSi
    • Mark Finnegan
    • Recent Posts
    • Resources
    • Richard Harbord
    • Stephen Fitzgerald
    • Stephen Sheen
    • Steve Bishop
    • Technical
    • Treasury
    • Uncategorized
  • Archives

    • 2021
    • 2020
    • 2019
    • 2018
    • 2017
    • 2016
    • 2015
    • 2014
    • 2013
    • 2012
    • 2011
  • Previous story Richard Harbord: Summer is a peak time for positive thinking and grappling with the future
  • Next story David Green: Scanning the regulatory horizon

© Copyright 2021 Room 151. Typegrid Theme by WPBandit.