Telford & Wrekin Council borrowing 'dangerous', says Tory leader

It comes as new papers reveal that the council's debt now stands at £200.1 million.

The figure, from May 31 is an increase of £55.9m from 2016, but the council says it has taken advantage of low interest rates and has ensured its borrowing is "safe".

Councillor Andrew Eade, leader of the Conservative group. said that since 2011, borrowing by the council has quadrupled and debt has tripled.

In the group's alternative budget that it released in January, the Tories said they could generate £107m from the sale of assets, reducing a huge chunk of council debt.

He said: "We warned the Labour administration earlier this year when setting their budget of the severe risk to council finances and future viability of the authority due to their borrow and spend policy which is now out of control.”

“Since Labour took control of the council in 2011 prudential borrowing has spiraled from £90m to a huge £350m and council debt, which was £55m in 2011, has quadrupled to £200m in just six years.”

“Labour-controlled Telford & Wrekin Council is building up dangerous levels of risk and debt which could put council tax payers at risk if the council were to run into difficulties.”

“Labour councillors must realise that borrowing to invest in commercial projects is exposing the council to additional credit risk and any incomes that flow from these projects are inherently uncertain.

“The commercial world is far removed from the world of local government and I question if Labour leaders at Telford Wrekin have sufficient or any experience to deal with commercial schemes they have set up.

“It is always easy when you are spending someone else’s money.”

The council has previously said the borrowing is safe and investments in projects like the NuPlace housing scheme and the solar farm at Wheat Leasows are helping to bring in money to the council.

Councillor Lee Carter, Telford & Wrekin Council’s cabinet member for finance, commercial services and economic development, said: “We are investing in our borough’s future – to protect our essential frontline services.

"We’re borrowing to attract even more investment and bring more businesses and jobs into the borough and more new homes.

"This is good responsible borrowing which is both the right thing to do and is earning more than it is costing."

He said rent from Nu Place brought in a pre-tax profit of £274,000 in 2016/17, while the solar farm will make at least £200,000 a year for the next 20 years after the costs have been covered.

The council has also made a saving of £4.0m against budget, which the report says is down to "active management of borrowing and the low interest rates prevailing for the year".