Updated PWLB Loan Reserve report for Sandgate Parish Council to October 2023.
Loan Reserve ReportPWLB-tracker-2018-23-15-08-23
We have previously issued PWLB Reports quarterly alongside committee reports. We will aim to do so from now using this standalone format.
The PWLB loan reserve was formed following our receipt of a loan of £500,000 from the Public Works Loan Board in August 2018 for the purchase of land which then fell through. Despite lobbying Government, the PWLB (a branch of the Treasury) refused to cancel the loan and take the money back from us without requiring a six figure penalty fee. They did, however, confirm the money could be retained and invested by the Council.
The Council has committed that the costs of the loan will not fall on taxpayers through increased Council Tax without a consultation on doing so. We have held no such consultation to date.
As such, we placed the full loan amount in a defined PWLB Loan Reserve.
- All payments for that loan (capital repayments, interest payments) come out of that reserve.
- All income from that loan (currently interest payments on the loan amount) we put into that reserve. The value of the reserve is published regularly (quarterly).
At this time, while the costs of the loan exceed the income (due to historically low interest rates), the value of our PWLB Loan Reserve is dropping. Although we seek investments with the best return, we want security for the money (so it is all currently in accounts backed by guarantee up to £85,000 per account) and some investments are not open to local authorities, so there are limits on what we can do.
Sandgate Parish Council uses (the excellent) Scribe Accounts to manage our Council accounts and generate reports.
Sandgate Parish Council’s finances are governed by our Financial Regulations and Standing Orders. Every Town and Parish Council has similar rules. Because those rules govern our financial management, we can only amend or vary them by a Council resolution.
Our Council’s Standing Orders require quarterly reporting of receipts, payments and balances. For instance, they say at 17.c:
The Responsible Financial Officer shall supply to each councillor as soon as practicable after 30 June, 30 September and 31 December in each year a statement to summarise:
i. the council’s receipts and payments for each quarter;
ii. the council’s aggregate receipts and payments for the year to date;
iii. the balances held at the end of the quarter being reported
and which includes a comparison with the budget for the financial year and highlights any actual or potential overspends.