Swansea Council has deferred setting aside £17 million towards debt repayments so the money can be deployed at short notice, potentially for an “exempt and legally privileged” matter.
A meeting of full council heard that political group leaders have been briefed on aspects of the issue, but no details were disclosed during a lengthy debate on the deferral proposal.
Councillors were also advised that £117 million of existing council debt – just under 20% of its total debt – was paid off in August this year.
Financial flexibility and exceptional risks
A report before full council said the deferral proposal was to provide short-term revenue budget flexibility while maintaining the council’s long-term financial sustainability. It said deferral did not eliminate the requirement to repay debt but postponed the timing of that repayment.
Finance director Ben Smith said there were “exceptional risks and costs that may fall to this authority which are exempt and legally privileged at this point in time”. He said he was seeking “maximum flexibility for things that may come to pass in the next month or two”.
A further £22 million has been freed up recently from a reserve pot.
Councillors express concerns
Liberal Democrat Cllr Peter Black said he hadn’t been briefed on what the £17 million might be needed for and felt he was being asked to “make a decision in the dark”.
It was acknowledged in the meeting that the shortage of detail could cause frustration. “I can’t go into the substance,” said Mr Smith.
Council leader Rob Stewart said a “technical note” would be prepared with an opportunity to discuss it in December.
Opposition leader Chris Holley said he felt that what was being proposed had “some stark and very worrying aspects of the future”, and that he couldn’t recommend his group supporting it. “There’s too many variables in it for us to understand,” he said.
Cllr Stewart said Mr Smith had been really clear and was asking for flexibility. The Swansea Labour leader also said he thought councillors “would be rejoicing” that the authority’s overall level of debt had come down.
The council borrowed £90 million in 2018 and £120 million in 2021 when interest rates were low.
Councils will debate and approve their budgets for 2027-28 in late February and early March. Before that happens the minority Plaid Cymru Welsh Government will need support from elsewhere in the Senedd to pass the budget for Wales.
