Plymouth City Council faces a massive debt increase. Borrowing could near £1B by 2028, sparking Conservative worries.
Council debt will likely keep growing. It could hit £918 million in 2026/27. By 2027/28, it might reach £961 million. Add PFI and leases, and debt passes £1.1 billion. Total debt is predicted at £1.133 billion in 2026/27.
The council’s borrowing limit is roughly £1.054 billion. If approved, maximum borrowing could reach £1.104 billion.
The council documents lay all this out. Financing next year’s debt needs about £50.369 million. This includes debt repayment money. Charges to the council’s revenue budget are going up. They are increasing from 18.9% to 19.85%.
The council expects to pay £22.532 million in interest. That is just during 2024/25 alone. The report anticipates a 5% interest rate. However, officials said this rate involves risk.
The documents outline the council’s borrowing strategy. The plan balances affordability with a healthy debt portfolio. Borrowing is needed because public funding underwent cuts.
The council wants less long-term borrowing. They may use local funds or seek short-term loans. It is expected that falling rates make this cheaper.
Borrowing funds the council’s capital projects. Their proposed program is £395.864 million. It grew with big projects, like the Armada Way revamp.
Other projects include temporary homes and Freeport support. The Woolwell transport scheme and electric buses are also included.
The capital program includes a specific focus on spending. About £97.318 million will deliver a “sustainable economy”.
About £65.935m moves towards Net Zero goals. Around £47.716 million creates a better city center.
The Conservative group worries about borrowing. They cite the high interest payments as concern. They note the debt often stretches over 50 years.
They seem “astonished with the amount of borrowing.” They claim the council relies too much on debt. The group suggests borrowing costs could increase. They maintain that debt affects service budgets. Less money remains for vital public services.
The Tories want the council to cut debt. They also criticized project overspends. They referenced redevelopment costs for New George Street. They want no further interest rate swaps. Their statement referenced the controversial £72 million deal.