The Labour-led council is set to ask for the eight-figure loan from the government, referred to as ‘exceptional financial support’ (EFS), in April to help balance its budget, reports Sebastian Mann, Local Democracy Reporter
Waltham Forest Council officials say they will not draw from a planned £19million loan until it is “absolutely necessary”.
The Labour-led council is set to ask for the eight-figure loan from the government, referred to as ‘exceptional financial support’ (EFS), in April to help balance its budget.
Councillors are also expected to back a 4.99% council tax hike, raising the annual cost for an average band-D property by £113.
The loan will not be given to the council as a lump sum but rather a functional line of credit it can draw from as and when it needs to.
Resources director Rob Manning told a scrutiny meeting last night (17th January) said: “We won’t actually draw it down until the very last minute, until we absolutely need that money.
“As soon as we draw it down, it becomes a loan and we have to start paying interest on it.”
He added that some councils would use the EFS to “prop up their services” while “hoping something would change”.
Councillor Paul Douglas said the loan would help keep the council tax hike below 5% and there were “clear plans” on how it would be used and repaid.
It will also allow the council to make £17m in savings over the next financial year, and hopefully avoid any further borrowing.
Waltham Forest was given an extra £18m for the coming financial year, but Manning said this is still 6.4% below what it received in 2010, in real terms.
The main focus will be on social care and housing, which accounts for 72% of the council’s current expenditure.
Council leader Grace Williams previously called the decision to apply for the loan both “financially responsible and morally correct”.
Conservative councillor Afzal Akram referred to the loan as the “taxpayers’ credit card”.
He criticised the council for “giving no indication” the council was definitely applying for the loan until the reports were published last week, despite Cllr Williams’ frequent warnings it could be necessary.
Councils across London are struggling to balance their budgets, with leaders across all parties blaming historic underfunding.
Seven are already using exceptional financial support, while London Councils estimates that by 2029, half the city will be in receipt. The 32 boroughs face a combined shortfall of £1billion.
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