Obtaining Approval to Borrow & Budgeting to Service Said Loan Timing Question

Question

Obtaining "Approval to Borrow" from the SoS (DLUHC) requires evidence of public support accompanying any application when the precept rises to service said loan. Yet this tier can set the precept level as it sees fit (without referendum principles that applies to higher tiers) thus able to set a budget at start of year then claim "It is not intended to increase the council tax precept for the purpose of the loan repayments" because they effectively they have already created the surplus needed to service the loan. Similarly If you agree budget (with a precept rise) to cover a possible loan and then consult on a project at that point your precept requests already gone in so yes you can stop the project without support but the rise is already sealed. How does your council go about it?    

Answer 1

Is there even a question in there?

How would you go about it.....?
Not the way you've intimated but if nobody is scrutinising the budget closely enough to notice then that is a deficiency of all the Cllrs who voted to accept the budget (precept) proposal.

Comments

The point I perhaps clumsily was trying to clarify is the timing of borrowing applications within this tier. If you don't assign a budget header capable of serving loan during precept setting period is it not difficult to actually apply for a loan during that year. Either way seems problematic. 1) Setting Precept then Consulting 2) Consulting then waiting x months till January when the borrowing rate may have drastically changed and project stalled then raising precept. Neither seem desirable outcomes.

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I see.

I would have thought that if the project is of such scale as to require a public works loan then it should have progressed incrementally from concept to consultation, design, scoping, outline planning or pre-app (as appropriate), to a fairly robust project proposal with indicative costing and budget allocation (or precept element) prior to even arriving at the public loan application stage.

I see your problem though, chicken and egg to speak.

Depending on the scale of the project must define what the lead-in timings and precursor actions should be.

If you need a loan it must be a fairly substantial project and a build?  The planning pre-app process 'could' serve several purposes - feasibility, heads of terms, design concept and public consultation.

Start the pre-app process Jan, build upon feedback and add detail to the scheme through Spring - Summer, enter budget calculations in the Autumn and submit loan application off the back of that (I don't know what the turn around time is on those loan applications.). Precept demand by following Jan.

If the pre-app advice is less than supportive - bin it, its not viable.