Sinn Féin local economy spokesperson Councillor Mickey Cooper has called for Derry City and Strabane District Council to be imaginative in how it approaches the restructuring of its finances to address the economic challenges to the council posed by the impact of Covid-19.
He said he was particularly keen that the council pursue initiatives to deal with long standing high interest loans which are costing the local authority several million pounds per year:
He said “Just last week the council’s lead finance officer advised the Governance & Strategic Planning Committee that the council could potentially face a deficit of over £3 million pounds as a result of the impact of Covid-19 even after cost cutting measures and additional funding support from central government is taken into account. Clearly this means we need to be imaginative in how we identify new funding sources.
“One option relates to loans taken out by the council many years ago which are charging interest rates of up to 20 per cent annually. This means the council is paying almost £3 million pounds per year in interest payments. I have asked the council to explore the possibility of refinancing these old loans so that much lower interest payments would apply.
“The £3 million pounds that could potentially be saved could generate up to £50 million pounds through the loan charge procedure to support crucial capital projects and also provide a financial cushion to mitigate against other financial pressures created by Covid-19 without the need for major rates hikes.
“I will continue discussions with the council to pursue this potential solution going forward.