Sheffield Council chiefs have today agreed to refinance the contract to resurface the city’s streets, upgrade lights and replace trees to save up to £14m.
The authority’s cabinet agreed a report seeking approval to progress with the refinance - to save between £300,000 and £600,000 a year over the remaining 22 years of the private finance initiative with Amey - this afternoon
. The council said that negotiations will now begin with banks that currently provide funding for the contract and potential new funders, with the aim of getting more favourable interest rates than those agreed in 2012.
Approval was also given for some ‘minor operational changes’ to the £2 billion contract which will result in savings. Some are described as ‘high value changes’.
The changes are detailed in a report appendix which is restricted because it is ‘relating to the financial or business affairs of any particular person.’
When asked a question about the detail of the changes by resident Nigel Slack, Coun Ben Curran gave ‘reassurance’ that changes would concern ‘procedural’ matters.
Questions were also asked by tree felling campaigners at the meeting.
Louise Wilcockson from Save Our Roadside Trees asked if the council would try to use any of the £14m in savings towards saving roadside trees where possible.
Coun Curran said the council was not proposing to use the money to support council services but to ‘offset the gap’ of £50m in funding that is expected next year due to austerity.
The report also said that the council had previously tried to contribute extra capital funding by way of public sector debt to generate savings but the proposal was later rejected by central government
‘Significant costs’ will be incurred to undertake the refinance and make changes to the contract.
They will be on top of paying half of the £265,000 in abortive costs from the council’s previous attempt to make savings.