Sheffield Council is set to approve plans to ‘restructure’ huge debts dating back to the World Student Games in a bid to save £33.5 million.
Under current arrangements – in which the council would pay between £25 million and £30m a year over the next decade – a total of £301.5m would be repaid on the £140m debt run up to build venues such as Sheffield Arena and Don Valley Stadium to host the games 22 years ago, in 1991.
Repayments of £25m in the current financial year equate to half the £50m savings being made due to Government budget cuts.
It would take until 2024 to complete repayments.
The council now hopes to borrow money from another source and repay £99m to creditor Lloyds Bank.
The council plans to enter into alternative arrangements borrowing money from the Public Works Loan Board, an arm of the Treasury which would provide money with a lower rate of interest.
A report to the council’s cabinet, which is due to approve the plan at a meeting on Wednesday, states the proposed arrangements would reduce the repayments total to £268m – a saving of £33.5m.
The council said it would need the ‘co-operation’ of Lloyds and Sheffield City Trust – which owns the major sporting facilities and technically owns the debt – to go ahead with its plan.
A date for when the debt will be repaid under the new arrangements is not revealed in the report.
Eugene Walker, council finance director, said: “Following the banking crisis, Lloyds have reviewed their asset portfolio and are now extremely keen to end the current arrangements.
“Lloyds’ change in attitude provides the council with the opportunity to review the way it funds Sheffield City Trust to meet its obligations.”