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Harlow Council defend giving £2 million loan to Thurrock Council

News / Thu 28th May 2020 am31 08:58am

LAST WEEK, a joint investigation by the Financial Times and The Bureau Investigates revealed that Thurrock Council had secured over £1 billion in loans as part of its financial strategy.

https://www.yourthurrock.com/2020/05/22/financial-times-article-examines-thurrock-councils-1-billion-borrowing-scheme/

Much of the money had been raised by securing loans from other councils.

The news items included a search engine which allowed you to see if your council had loaned money to Thurrock.

So we did and found out that Harlow Council had loaned over £2 million. It also revealed that Harlow Council had received £7,000 in interest.

So we asked Harlow Council to give us more details on the loan.

A Harlow Council spokesperson said: ““We most recently lent Thurrock Council £2.5m for a 28-day period from February to March 2020.

The council has received the money back in full. Long term investment is not financed through day to day cash management deals but through long term borrowing either from the government via Treasury loans or other long term borrowing through financial markets.

The deal was undertaken as part of our normal day-to-day treasury management activities to deal with our daily cash flow requirements. This is not unusual and it is common practice for councils to lend money to other councils rather than keep all money in one place.

The payment was fully complaint with the council’s treasury management strategy which is agreed annually by full council. For the period of this payment the strategy was agreed in February 2019 and covered the period 1 April 2019 to 31 March 2020.

This strategy followed the relevant government legislation for short-term council investments. The investment was made by council staff under delegations that sit under the council’s section 151 officer (Head of finance).

“All investments are done through brokers and on the advice of brokers so its not direct council-to-council lending for a specific purpose.

Decisions are taken to always invest securely, for example with the government, other local councils or selected high-quality banks, to minimise the risk of loss.”

YH also discovered that Harlow Council has only been in receipt of £80,000 worth of short term loans.

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5 Comments for Harlow Council defend giving £2 million loan to Thurrock Council:

MickyB77
2020-05-28 12:32:56

This is very funny and it just shows how ridiculous this administration is. I've already posted a comment on the cycle track fiasco. Why doesn't this council get HTS to do the re-surfacing work, and so they pay themselves to do the job, then perhaps they can claim the outstanding costs from Essex CC. Seems a simple solution.

carra
2020-05-28 13:30:57

My blood runs cold whenever I hear about the public sector getting involved with private initiatives like this. They don't have the right mindset or skills, and It invariably results in them having their pants pulled down and the tax payer losing out.

MickyB77
2020-05-28 13:49:19

Spot on carra.

simoncarter
2020-05-29 09:18:07

For further information on the procedures the council follows to invest and safeguard you money see from para 29 http://moderngov.harlow.gov.uk/documents/s15116/Capital%20and%20Treasury%20Report%20Appendices%202020.pdf Simples.

MickyB77
2020-05-30 05:47:42

The debts are ? Historical or hysterical.

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