Treasury approve up to £130m to be taken out of £500m covid loan

Tuesday 01 June 2021

The Government has approved up to £130m to be taken out of its £500m covid loan, to help its continued response to the pandemic.

Treasury Minister Deputy Susie Pinel signed off a decision last week to cap £130m as the amount that can be taken out of the Government’s ‘Revolving Credit Facility’ up until the end of June.

Pictured: The decision was signed off by Treasury Minister Deputy Susie Pinel.

The decision reads that the Minister has approved a “drawdown cap from the Revolving Credit Facility of £130 million to meet the cashflow and liquidity requirements of the Government of Jersey as they fall due for the period to 30th June 2021.”

It further states the move means liabilities can be met for June, as well as giving time to plan a medium-term-debt strategy. 

“The Government Plan approved borrowing to pay for the impacts of Covid-19 and this is the first drawdown of that,” a Government spokesperson told Express.

“The Minister for Treasury and Resources has signed a ministerial decision to cap the amount that can be drawn down between now and the end of June to £130 million. 

“This £130 million will be used to fund the Government’s response to the pandemic and support for businesses, at a time when income through taxation and duties is lower.

“At the end of June, the Minister will review the situation and set a new limit for the third quarter of the year.”

Pictured: The Government Plan has outlined how much it forecasts it will borrow up until 2024.

The Revolving Credit Facility was set up as a loan in May last year to help fund the Government – it was set up for an initial period of two years and was provided by five local banks – Barclays, Butterfield, HSBC, Lloyds and RBS International.

However, presently only £5m is known to have been being taken out of the loan.

Late last year, it did seem that more would be taken out, with the Minister making a decision in September to approve borrowing of between £5 million and £60 million from the loan.

It was said that this was to help “meet [the] requirements” of the Government’s Consolidated Fund from 1st October 2020 to 31st December 2020, due to forecasts of high cashflow and additional spending.

However, the Treasury Minister later rescinded this decision on December 16, stating that “the actual cash flow no longer demonstrates a requirement for borrowing before 31st December 2020 because of lower than expected departmental expenditure.”

In February this year, £50m of unspent departmental money from the reserves in 2020 was approved by the Minister to be put into the Consolidated Fund, to minimise how much would need to be borrowed from the Revolving Credit Facility.