SIC could borrow money

THE SIC looks set to borrow money to help finance big capital projects including the new Anderson High School.

For the past 20 years the local authority has had a “blanket” policy of funding all capital spending from its oil reserves.

But head of finance James Gray told this morning’s executive committee that there was an “economic case” for borrowing externally.

That is because interest rates are currently lower than the long-term average return on the council’s stock market investments.

SIC political leader Gary Robinson highlighted Gray’s estimate that the move could save as much as £1 million a year.

“We’re in a position now where we need to start moving with some infrastructure projects, most notably the Anderson High School,” Robinson said.

“If we can get a rate of interest that is lower than we are currently getting as a return on the reserves that we have invested it makes a huge amount of sense.”

Councillor Jonathan Wills welcomed the report, but voiced concern that past councils had been “misinformed”.

“Previous councils were solemnly and repeatedly told we couldn’t do this,” Wills said.

Had Gray’s advice been available in the late 1990s it could have saved the SIC millions of pounds, he said.

The finance chief said that there had been a particularly “huge variation” between interest rates and stock market returns since the financial crash in 2008.

“It was sticking out like a sore thumb,” he said.