Otterpool Park Update: Costs rise to £66 million and not a single house built.
Neither a borrower nor a lender be; For loan oft loses both itself and friend, And borrowing dulls the edge of husbandry. This above all: to thine ownself be true, And it must follow, as the night the day, Thou canst not then be false to any man. Hamlet Act 1 Scene 3
It’s been near six years since the Council bought John Champney’s land in Otterpool Lane for £5m, first reported on by the Shepway Vox Team. Since then not a single house has been built and the council have spent in excess of £66 million, buying property, land and paying consultants.
It looks to me as though they’re now in too deep and past the point of no return.
Perhaps Cllr Monk should now be made to comment about how he proposes to finance his grandiose plans. If he is not careful, Folkestone and Hythe District Council will end up bankrupt or our council tax will rocket. But then again, where will he be in six months time following the local elections.
The interest rate offered by the Public Works Loan Board, which issues loans to councils for capital projects, is to rise sharply
Dozens of housing, regeneration and infrastructure projects across the country could be cancelled after the Treasury unexpectedly raised borrowing costs, local authorities have warned.
The Treasury notified local authority finance officers on Wednesday that it was to sharply increase the interest rate on new loans from the Public Works Loan Board, the government body that issues loans to councils for capital projects.
The board is one of the main sources of local authority borrowing, offering councils cheap debt to finance investment in projects such as the construction of schools and roads and town centre regeneration schemes. It has about £78 billion of outstanding loans on its books.
Before the change, which has been introduced with immediate effect, the government charged an interest rate margin of 0.8 percentage points over the gilt rate. This has more than doubled, to 1.8 percentage points over the gilt rate.
Sharon Taylor, Labour leader of Stevenage borough council in Hertfordshire, said: “It’s hideous to find this out totally out of the blue and means that all our financial planning is blown out of the water.”
She said the rate rise would “trash” the council’s 30-year housing business plan, which sets out how the borough intends to maintain its properties and build new council homes to cope with the 2,500 families on its waiting list.
The Local Government Association estimated that the interest rate rise could cost councils an extra £70 million a year in borrowing costs.
“It presents a real risk that capital schemes, including house building projects, will cease to be affordable and may have to be cancelled as a result,” a spokesman said. John Dickie, policy director at London First, a business group, said: “With the base rate low and Brexit looming, it is ridiculous that national government is making it more expensive for local authorities to invest in their communities.”
In a letter to local authorities, the Treasury said it was restoring interest rates to levels available last year as a result of some local authorities substantially increasing their use of the loan board in recent months as the cost of borrowing has fallen to record lows.
Its cheap rates have fuelled buying sprees of office blocks and shopping centres by some councils seeking to boost local economies and generate extra income. Critics have raised concerns about the extent to which some councils have tied the future of their public services to the uncertain property market. Spelthorne borough council in Surrey has borrowed £1 billion to buy office buildings, despite having a net annual budget of just £22 million.
Let’s hope that not a single house is ever built on Otterpool Land. Our countryside is too precious to lose.Better still,reopen the racecourse and be Kent’s only one again.The area could do with an entertainment venue like this again.
Monk out at the next opportunity.
“Perhaps Cllr Monk should now be made to comment about how he proposes to finance his grandiose plans. If he is not careful, Folkestone and Hythe District Council will end up bankrupt”
If the wheels were to fall off then the whole project might get sold to a Tory donor or donors and be presented as a ‘famous victory for common sense”.
“Or our council tax will rocket”
Somewhat inevitable I think.
“But then again, where will he be in six months time following the local elections.”
I think the next election is May 2023 and he’ll probably get propped up again by independents and other ne’er-do-wells.