A huge £306 million investment into Oldham will be chiefly funded by borrowing and selling assets, the town hall has confirmed.
The ‘Creating a Better Place’ programme, approved by cabinet bosses last week, would see hundreds of millions of pounds invested into infrastructure projects in the borough, including housebuilding.
The investment from the council will total £306m, split between capital projects of £102m and investment projects of £204m.
Now council bosses have explained exactly how that huge package of funding will be paid for.
Officers confirm that the £102m will be ‘capital spend’ by the council, financed by capital receipts and prudential borrowing, which is included in the medium term financial strategy.
Capital receipts are obtained by a local authority when it sells off assets – chiefly land or buildings – often to private developers and companies.
Councils can then re-invest the money into other capital projects.
‘Prudential borrowing’ is the set of rules governing local authority borrowing in the UK.
Local authorities may borrow money from a number of different sources, including on the markets, using the Public Works Loan Board (PWLB), or municipal bonds.
The majority of the loans normally taken out by councils come from the PWLB, which is the arm of the treasury that helps finance local government capital spending with low interest rates.
However, councils cannot breach the overall limits on their borrowing set by the Prudential Code regime.
“The council will consider financing capital projects using prudential borrowing where plans are sustainable, affordable and prudent,” officers state in the latest budget documents.
In 2021/22, the council is proposing to have £99.1m in resources funded by prudential borrowing.
The £204m portion of the Better Places project categorised as investment is designated as capital spend financed by additional borrowing.
The council says that this borrowing will be funded by ‘returns on the investment’.
“The overall programme is aimed at generating additional income and a reduction in costs,” a spokesperson said.
“The financial benefits will be available in future years to help to address the council’s funding pressures.”
Some of the investment will also go beyond the years 2024/25, and could last up until 2030.
Council leader Sean Fielding (pictured below) had described the Better Place investment as a ‘tough decision’ because of the sheer amount of money being promised.
However he also pledged to councillors that once the project was ‘fully advanced’, it would see £11m coming back into the council’s coffers.
Detailed schemes have yet to be announced as part of the funding package.
However the town hall is exploring the potential for new health centres in Shaw and Chadderton, and continuing to work on plans to bring hotel provision to the site of the now-demolished Magistrates Court off West Street.
Car parking and creating new temporary accommodation to meet homelessness demand in the borough is also included within the capital programme.
Town centre regeneration would also deliver new jobs and support businesses, while bosses says they are also committed to ‘preserving Tommyfield Market’ and providing it with a sustainable future.
And it’s aimed to build thousands of new homes in the town centre as part of a focus on building more homes on brownfield sites to relieve pressure on the green belt.
It is hoped the vision will also deliver a thousand new jobs and 100 apprenticeship opportunities.