Council delays setting aside £17m for debt repayments over undisclosed risks

Richard Youle, Local Democracy Reporter

Councillors have voted to delay setting aside £17 million for debt repayments so the money is available at short notice for potential costs that were not disclosed in public.

Swansea Council’s finance director, Ben Smith, told a full council meeting that “exceptional risks and costs” could fall to the authority and that these were “exempt and legally privileged at this point in time”. He said he wanted “maximum flexibility for things that may come to pass in the next month or two”.

The meeting heard that political group leaders had been briefed on aspects of the issue. Liberal Democrat councillor Peter Black said he had not been told what the money might be needed for and felt he was being asked to “make a decision in the dark”.

“I can’t go into the substance,” Mr Smith said. Council leader Rob Stewart said a “technical note” would be prepared and councillors would have an opportunity to discuss it in December.

A report to the council said the deferral would give the authority more room in its day-to-day budget in the short term while keeping its finances sustainable over the longer term. The requirement to repay the debt remains, with the deferral changing when the money is set aside.

The council paid off £117 million of existing debt in August, just under a fifth of its total debt. A further £22 million has recently been freed up from a reserve.

Opposition leader Chris Holley said the proposal had “some stark and very worrying aspects of the future” and that he could not recommend that his group support it.

“There’s too many variables in it for us to understand,” he said.

Cllr Stewart said the finance director had been clear about why he wanted flexibility and that he thought councillors “would be rejoicing” at the fall in the authority’s overall debt.

The council borrowed £90 million in 2018 and £120 million in 2021, when interest rates were low.

Councils are due to debate and approve their 2027–28 budgets in late February and early March. Before then, the minority Plaid Cymru Welsh Government will need support from elsewhere in the Senedd to pass its budget.