Post-Brexit PWLB borrowing slows in July while annual figures up 17%
0Borrowing through the Public Works Loan Board fell back significantly in July, following the Brexit-related feeding frenzy in June.
PWLB figures show that the body lent £289.6m to local authorities during the month, significantly down from the total of £1.326bn borrowed the previous month.
However, the total is still significantly up on May’s figure of £74.2m, with much of July’s borrowing being taken in long-term borrowing.
Of the 38 loans agreed during July, 24 were for durations of more than 40 years at mouth-watering long term rates of between 2.08% and 2.36%.
Only three of the loans have durations of less than 25 years, indicating a continuing appetite of some local authorities to take advantage of the low rates on offer to tie in longer term borrowing.
Last month, treasury adviser Arlingclose warned councils against taking on too much long-term debt.
The PWLB has also revealed that loans made to local authorities increased in value by 17% during 2015-16 compared to the previous year.
It advanced 621 loans with a value of £3.021bn, up from 468 loans totalling £2.587bn the previous year.
Non-metropolitan districts in England made up £623m of the total, with metropolitan districts taking £490m. County councils took £239m, while London boroughs borrowed £120m.
Welsh councils borrowed just over £1bn, with £919m made on a one-off basis to help Welsh local authorities buy themselves out of the housing revenue account subsidy system in Wales. Scottish councils borrowed £272m during the year.
Overall, PWLB borrowers redeemed loans with a principle value of £282m during the year, up significantly on the total of £46m in 2014-15.
At the end of the financial year, the PWLB held loan assets of £65.3bn, slightly down from £64.4bn at the end of the previous accounting period.
Last year, the PWLB generated £2.9bn of interest income on its loans.
