Do you raise the Precept before seeking approval for a PWLB loan

Question

At a Parish Meeting last night a Cllr stated that they raised the precept by 66% on the advice that they had to demonstrate that they could repay the loan by already having the rise in place

Is this true
or do you raise the precept once all the negotatiions have been completed and you know the amount you will require

Answer 1

Raising the precept on the off chance that you might be successful in a pwlb application does not sound like appropriate financial management to me!
Proving that the parish has the ability to repay the loan is not about whether you can raise the precept by an extreme amount - parishes are not capped so in theory can raise the precept by whatever amount they wish.  Its about demonstrating that you have appropriate financial management in place, have a parish that is of sufficient size to generate the potential for income generation through the precept to the level required (and not by a stupid amount per household) and demonstrating the general support by residents for the intended project.

Comments

Yep that's what I thought
Me I would have negotiated with the sellers to buy at an appropriate time (FY start) so as the precept rose by the exact amount when all parties had agreed a price
I would say muppets but thats unfair to Kermit & Co

Answer 2

It’s not clear what the money is for but to me the real worry would be “is the project feasible, has it been properly costed and do the public support it ?

I know of a nearby Parish that funnelled huge amounts of S106 money into a white elephant project that will forever a huge drain on resources
My own Parish constructed a building part of which they’ve been trying to find a proper use for ever since

Comments

Yep this is a Grade 2 listed hall in drastic need of renovation
They are hoping to get the money to buy the hall from a PWLB loan and then have based their figures on getting grants - hahahahahahah
Looks like the precept is going up agin in my opinion