An Introduction to Parish Council Borrowing

• A parish council may borrow funds but will normally require the formal written approval of the Secretary of State.
• Councils wishing to borrow will have to get in touch with the County Association, whether a member or not, to discuss the proposal and to obtain the Application Form for the Approval.
• Borrowing must be for a specific, generally capital expenditure, purpose detailed on the Application and in a Report to Council.
• Approval is required and no mortgage or charge on property is allowed.
• The Council will be required to demonstrate to the Secretary of State that the repayments are affordable and that the Project costs being supported exceed £5 per elector.
• If borrowing is being considered, the Clerk and Chairman should contact the County Association office as early as possible. Any formal decision to apply for and to exercise a borrowing approval has to be made by the Full Council meeting and not by a Committee.
• Usually loans are taken from the Public Works Loan Board (PWLB) at rates of interest that are very competitive. A parish council is a first class borrower based on the security of the council tax revenues. PWLB also understand the statutory position of the Council.

Loan A

This loan was taken out on 11th July 2002 in the sum of £115,00 for a term of 25 years. 

The interest rate is fixed at 5.25 %.

The final payment will be on 11 July 2027.

The loan was for an extension to build parish council offices at the community centre.

Loan B 

This loan was taken out on 12th July 2006 in the sum of £500,00 for a term of 25 years. 

The interest rate is fixed at 4.75 %.

The final payment will be on 11 July 2031.

The loan was for the youth extension to the community centre.

Public Work Loans Board Audit Statement 31st March 2021