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Conservatives attack Lib Dems over borrowing of £65.8mln

Liberal Democrat

The opposition councillors say this £3 million tolerance is dangerously high considering the size and scale of the council as they only have a net budget requirement of £12 million per annum

Conservative opposition councillors have attacked Liberal Democrat leaders at Cotswold District Council (CDC) over the borrowing of £65.8 million.

The Tories are also concerned that the Liberal Democrat administration recently lifted the threshold where spending needed to be scrutinised by councillors from £1 million to £3 million.

The opposition councillors say this £3 million tolerance is dangerously high considering the size and scale of the council as they only have an annual net budget requirement of £12 million.

The Lib Dem administration has also approved the council’s first financial investment as part of a new £65.8 million commercialisation strategy.

And the council have recently approved plans to borrow £3,753,000 from the Public Works Loan Board and then immediately lend this money to a housing association to facilitate a development in Moreton-in-Marsh.

A total of £1,897,500 will be borrowed and then leant over a 50-year period, the rest will be on a short-term basis.

The Tories say that in return for beneficial interest rates over 50 years, the housing association has agreed to install solar panels on 15 homes at Davis Road, Moreton in Marsh which are worth around £45,382.

The loan is also expected to yield the council £10,000 per year on the current interest rates.

But opposition councillors say this is well below the minimum 1.5 per cent target return the Lib Dems benchmarked when they adopted the borrowing and investment strategy in September 2020.

Tory group leader Richard Morgan said: Whilst we support affordable housing and green homes, borrowing and then lending £1.9 million for minimal return over 50 years is risky and makes no financial sense to us.

This development would go ahead with or without any involvement from CDC, whether we loan the money or not. If this is all about £45,382 of solar panels, we could fund these from council reserves or commuted sums as we did at the Stockwell’s development, he said.

We also have serious concerns over the Lib Dem tax, borrow and spend agenda. To up the borrowing and spending scrutiny threshold from £1 million to £3 million is dangerous for a council of our size, he said. It’s clear the Lib Dems intend to accelerate their tax, borrow, and spend agenda and want as little public scrutiny as possible whilst they are doing it.

It needs to be remembered that when the Lib Dems won control of the council in May 2019, they inherited a debt free council, which had balanced budgets and £33 million of financial reserves. It had the seventh lowest district council tax in the country and was statistically the second most efficient in the country. It is amazing how quickly the Lib Dems have ruined this legacy, Morgan said.

But Liberal Democrat council leader Joe Harris said it was a bit rich for the Tories to criticise them after they left the local authority with a £1m black hole in the revenue budget in 2019.

He said the Tory administration spent most of the money the council secured from the sale of the district’s council houses over their 16 years in power. In the ten years from 2010 to 2020, their governments slashed the Council’s funding by 59 per cent.

The Lib Dem administration has made tough decisions over the past two years in order to rebuild the Council’s finances to allow us to invest in the Cotswolds. But we need to do more, Harris said. Like many other councils, including many Conservative-run authorities, we’re planning to take advantage of the ability to borrow money at historically low rates to fund our recovery investment strategy.

He said: That funding will allow us to increase our income while supporting our other goals of delivering social housing, tackling the climate emergency and boosting our economic recovery.

Important:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.