A number of questions have been raised recently about Trowbridge Town Council’s borrowing. Please find below some details about our investments in the town which have been funded by borrowing, and also how the pandemic is impacting on the council’s finances.
The Council has undertaken a number of significant investments since 2008, most notably the re-building of the Civic Centre, eliminating the need to rent two sets of offices and also consolidating the Information Centre, as well as providing a superb conference and entertainment facility for the town. Other investments have included the freehold purchase of Woodmarsh Football Ground, the provision of a new storage facility in the Park, replacing old and dilapidated sheds behind the bandstand whilst opening up areas which were previously closed to the public in front of the new St George’s Works development. In addition, the expanded Trowbridge Museum has benefited from investment. Financing by borrowing allows the Town Council to spread the cost over a long period, with the benefit of fixed long-term interest rates available from the government. Borrowing approvals are assessed in great detail by the Ministry of Housing, Communities and Local Government and the Council has to demonstrate each time that they are affordable and that public consultation has been undertaken. None of our investments have required an increase in the Council Tax to fund the loan repayments.
Civic Centre £5million (2009/2010/2011) over 50-years, average interest rate of 4.659%, giving a total repayment of £12,957,753 which is less than £5million compounded by 2% inflation over the same period.
Woodmarsh £175,000 in 2016/2017 over 30-years On an equal instalment of principal basis, which means the total repayments reduce gradually. The interest rate is 2.92%, giving total repayments of £251,776.27. This is funded from the rent charged to the Trowbridge Town Football Club.
Museum £900,000 in 2018-2020 over 25-years at an average interest rate of 2.685%, giving total repayments of £1,241,425.50
Park Storage £300,000 in 2019 over 30-years at an interest rate of 2.43%, giving total repayments of £424,260.60, which is less than the cost of the rented off-site storage.
Doric Park The Town Council will be considering making a borrowing application to invest in the provision of an all-weather sports pitch at Doric Park, on land that the Council owns, adjacent to Trowbridge Rugby Club. The borrowing would be funded from the fees charged to users of the facility and there is significant and growing demand from football clubs and other organisations to use it. We would need to borrow around £2million.
Financial Implications Of Coronavirus Emergency
The option to furlough staff is restricted by the commercial income rule, so only staff in income-generating departments have been furloughed. Reduction in expenditure has been implemented for projects, and we have frozen recruitment. The legislation specifically excludes parish and town councils, from receiving Business Rates rebates or Small Business Grants. If we are able to continue to furlough staff during the restrictions we do not expect there to be a significant impact on the council’s financial position in 2020/2021. The biggest risk will be the Civic Centre where activities are likely to be restricted for a longer period. A small number of staff returned to work part-time in July to respond to requests from users of the Civic Centre, to make arrangements for the town’s Christmas event programme and to support Key Worker child support during the school summer holidays. The Town Council joined with a number of other town councils across the country, including Chippenham, to write a letter to Robert Jenrick MP, Secretary of State at the Ministry of Housing, Communities and Local Government highlighting the plight of those councils which have followed the suggestion to diversify into alternative income streams, (other than Council Tax) and the plight that a lack of government support has left us in during the crisis.