Hartlepool council chiefs defend money management over £177m liabilities claim

Hartlepool Civic Centre.
Hartlepool Civic Centre.

COUNCIL chiefs have defended their money management after a pressure group claimed the authority has more than £177m of liabilities.

It comes after the Taxpayers’ Alliance released national figures that claim Hartlepool Borough Council had £177.3m of liabilities in 2012-13.

They say liabilities include payments for employee pensions and long-term loans.

But Hartlepool Borough Council and Durham County Council, which had liabilities of £1.483 billion in 2012-13, say the figures are out of context and their finances are in order. In the previous financial year, Hartlepool’s liabilities were worth £188.7m and Durham’s were £1.369bn.

A Hartlepool Borough Council spokesman said: “Hartlepool council has an excellent track record for sound financial management and efficiency.

“Despite being one of the hardest hit local authorities under the Government’s austerity measures, it has still managed to freeze council tax for the last four years, cut its senior management by a third, made significant savings on councillors’ allowances (and introduced the Hartlepool Living Wage from the savings on those allowances) and its staff had a pay freeze for three years.

“It is also important to put the Hartlepool figures quoted by the Taxpayers Alliance into proper context.

“The figures quoted include the accounting valuation of future pension liabilities.

“Hartlepool council is in a much better position than many authorities as it is a member of the Teesside Pension Fund, which has assets which exceed its liabilities.

“As a result, the contributions which the council will make in respect of employee pensions over the next three years will actually reduce by two per cent – saving Hartlepool council tax payers half a million pounds per year.”

The spokesman said: “The other liabilities cited by the Taxpayers Alliance include the council’s long-term borrowing –– these are effectively mortgages which are used to pay for assets which will last many years, such as schools and other facilities.”

Don McLure, Durham County Council’s corporate director of resources, said: “Our long term liabilities are made up of two major items – long-term loans and our Pension Fund liabilities for past and present employees.

“Any decision to take on long-term borrowing is based on accounting best practice guidance, value for money and affordability criteria.

“We generally take on long-term borrowing to fund capital infrastructure investments such as building council housing, schools and roads.”

Mr McLure said: “The cost of these investments is paid back via loan repayments similar to any individual’s mortgage repayments on their home.

“Durham’s long-term liabilities did increase by eight per cent in 2012-13, but they actually reduced by more than 12 per cent in 2013-14.

“As the biggest authority in the region, it is to be expected that our long-term liabilities are larger than our neighbouring councils.”