And we thought that the public loan’s board was not meant to make a profit out of the tax payer ? Notes from the Front…….Part 7 (Full Parish Council Meeting July 2013, Cedar Barn) Item 15 correspondence sent and received first up was feedback from the public loans board. Letter number 1 the Chair commented we have had a quotation payment, which was not terribly impressive. Cllr Slater asked for an overview and the Chair obliged. Stating the concept was we would ask the public works loans board for an idea of how we could make a prepayment of the £380k loan that was outstanding at the end of March 2013 (end of HPC financial year). Continuing they came back with this letter dated 10th June and it seems they are trying to side step the question and I think they do not want to acknowledge that a reduction in the interest rate means that the cash value of your loan increases. Observation: So we now know interest rates have gone down since the loan was taken out, therefore if you reduce the amount owed they want more money back due to their loss of interest or profit if the loan went the full term and not paid back sooner. Basically they want you to stay in debt and only pay the debt back as the loan was taken out; this all sounds familiar, bloggers comment). The Chair continued, they have tried to explain it in an example and then they have put the decimal point in the wrong place on the example, so it wasn’t entirely clear how it was going to work. It seems that we have civil servants here coming back to us trying discouraging us from repaying public debt, I don’t understand where they are coming from ? Notwithstanding that they have provided another example there showing a premium on a principle repayment of £10,000. As mentioned the amount we pay back would not reduce the principle by the equivalent amount as a premium for early reduction of some of the debt would be taken out. In the HPC case for every £10,000 paid early only £8,500 would go to pay off the principle/debt, £1,500 would go to the public works loans board as a fee (£137 of accrued interest + £1,363 premium). To put this into context if the council pay off £100,000 (given its earning no interest in the bank), £15,000 would go to the public works board (£1,370 for accrued interest + £13,630 premium), that’s 13.63% premium; on top of the accrued interest. Only £85,000 would come off the debt. Bloggers comment. The Chair, who seemed very disappointed in this response given it was public money involved, proposed the issue goes to the Finance and General Purposes Committee alongside the investment return of the case we are getting back from a maturing short fixed term from the Co-op. Observation: This will enable the council to debate the two options of getting ½% interest on £100,000, given inflation is much higher and the capital would in real terms be decreasing in value or is it better to pay off some of the councils long term debt and thus increasing available funds in the precept in subsequent years. The back drop is that the government is reducing the amount of precept as previously blogged. Cllr Thompson commented there is an alternative strategy to buy some street lights, meaning LED lighting. We spend £30,000 a year on electricity and LED lights use a ¼ of the electricity giving a good ROI (return on investment). The Vice Chair commented I thought that ex Cllr Brown did a study on this before he left ? Cllr Thompson replied that he did a survey with the public who were all in favour of it at the time. So if we invest the money in street lights we will make a saving, so you are getting a return on your investment. The Chair commented so there are three alternatives for us to look at and we would need a business case for the street light idea. The Vice Chair asked what was the expected saving ¾ came back the reply from Cllr Thompson (£22.5k based on £30k spent). Cllr Thompson then said he had a contact that would be happy to come and talk to the council. The Chair said we should look at all three options and asked Cllr Thompson to provide the numbers for lighting. Observation: Having had to produce the odd document for the council to progress the odd initiative, like the Skatepark I have not yet seen the councillors, who have a pet project ever produce a full business plan or ROI. Hopefully this time Cllr Thompson will for the public to review given it is a large amount of public money that is to be spent. The concern is WDC looked at this idea some time ago and rejected it as they did not believe it was cost effective, given the payback. However, it is a good idea to see what the real ROI would be, including start-up, capital and on-going costs. It is also important to recognise the cost of this technology will only come down in price over time. Letter number 2 was Ellis Whittam who provide HR services, an issue regarding the way the 3 year contract was agreed or not. Did full council approve it or even know what the T & C’s were, except a few ex-councillors who agreed it ? The Chair looking up decided this one was for private time as a contract was involved and a blogger was sitting in the audience, clearly something is amiss (bloggers comment). To be continued…….Letter number 3 Queensway Tranquil Park interesting feedback from WDC or not if you are Cllr Gaffney - Chair of this committee. And an interesting commitment made to WDC by the ex chair of HPC !
Posted on: Thu, 18 Jul 2013 15:47:48 +0000
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