Coronavirus costs Dorset Council £25M
It also over-spent by £18.6 million
Dorset Council currently has more than £210million of borrowing.
The authority says that by switching some of its finance needs to short-term borrowing, rather than longer term, it has been able to reduce net borrowing costs.
A report to councillors next week says that at the end of January the authority had £210.5m of loans, £84.4m from the Government backed Public Works Loan Board; £25m from other councils; £36.6m from banks and £64.5m from other lenders.
The majority of the council’s borrowing, £132.4m, is in fixed term maturity loans.
A table showing the maturity dates of the loans shows that £30.5m is accounted for in loans of 12 months, or less, 14.5% of the council’s total borrowing; with 19.9 per cent in loans with a 30-35 year term and 26.6% 45-50 years with 12.2% in loans of 50 years or more.
The report says that the timing of repaying loans can result in cost savings especially when current rates are low. It cites £20m of loans which it repaid early in April 2019, delivering an estimated annual revenue saving of £150,000.
Another report, to next week’s audit and governance committee, shows that the council expects to end the financial year with an overspend of £18.6m, a £9m improvement of the predication after the first six months of the financial year.
The report notes that Covid costs have added almost £25.5m to the council’s revenue budgets this year.