Borrowing cap slashed budget for Grenfell upgrade
Kensington and Chelsea Council’s budget for refurbishing Grenfell Tower was limited by the borrowing cap imposed by central government, according to council papers.
The documents show that the council allocated £9.7 million for the renovation of the high-rise block in 2014, when the combustible cladding was fitted.
The borrowing cap meant that the local authority had only £11.4 million of borrowing capacity and was therefore unable to raise loans to perform maintenance, despite £100 million of work being needed across the borough.
The accounts state: “Local authorities have been set a borrowing cap for their housing revenue account which cannot be exceeded.
“The Royal Borough’s cap is £221 million. Given our current debt, our headroom for borrowing is only £11.4 million…
“Given the limited scope for additional borrowing, the intention is to not use it to fund maintenance work.”
A spokesman for Kensington and Chelsea Council said: “Refurbishment works are likely to feature in the public inquiry into Grenfell Tower. We want to be open and transparent, but we also do not want to prejudice the fair conduct of the public inquiry.”