Mystery over claims Wrexham Council loan £11m to ‘prop up’ other authorities

North Wales cash-strapped councils have loaned out over £366m to other local authorities at ‘bargain basement interest rates’, new figures have revealed.

The BBC’s Local Democracy Reporter scheme quote the ever mysterious ‘Taxpayers Alliance’ claims that councils should focus on delivering their statutory duties instead of “propping up each other” despite authorities describing the loaning of cash to other councils as a common occurrence and a way of supporting one another.

According to the figures, obtained following Freedom of Information requests, Ceredigion accounts for almost a third of the total, having loaned out £109m since 2013 – with recipients paying back on interest rates as low as 0.15%.

Over the same period, Wrexham loaned £11m, Gwynedd loaned out £92m with Flintshire lending £57.3m.

The BBC claim due to the low interest rates “all well below 1%”, authorities have “only made a relatively modest profit” although the specific details are not provided.

Duncan Simpson, research analyst at the TaxPayers’ Alliance, said: “Local authorities should not be engaged in propping up each other. Rather, they should focus on delivering their statutory duties.

“Whilst these loan rates seem appealing, taxpayers all over the country could be left even further out of pocket if they’re not repaid.”

We asked Wrexham Council for comment on the figures and claims to attempt to get local clarity, and asked for details on the returns made on the loans issued, and information over what period the loans were made.

As the claim was such loans were ‘propping up’ other authorities, we enquired which other local authorities benefited from Wrexham Council cash.

With the ever dire financial picture of local authority finances being painted, we also asked how loaning millions sit within the message of financial woe that is being put to the public of Wrexham.

Wrexham Council thanked us the for the opportunity to answer the above questions.

However they added they had no comment on them.

Gareth Williams – BBC Local Democracy Reporter (more here on the LDR scheme) / Wrexham.com