Northants Council Pays Back £5m Loan To Leicestershire
Written by HFM News on 3rd January 2019
A loan of £5m from Leicestershire to cash-strapped Northamptonshire County Council has been repaid on time with interest.
There were fears the cash – handed over last year – would never be seen again because of the dire financial state of the neighbouring authority.
The money was handed back yesterday – the £35,000 interest will be ploughed back into services.
Deputy council leader, Byron Rhodes, said: “We take very seriously the security of our loans. Our track record is strong and unlike other councils, we did not have any money with Icelandic banks or other high profile bank failures.
“Making the most of every pound we spend remains vital and lending money enables us to maximise our income.”
A spokesman for Northamptonshire County Council said: “It is normal practice for councils to lend to each other for cash-flow purposes.
“However we cannot borrow resource – the county council has to live within its own means. The money can’t be lent as a ‘bail-out’.
“Local Authorities do not default on loans, they are backed by HM Government via a sovereign guarantee.”
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