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Southend Council borrowing rose by almost £70million last year, new government figures have revealed.
Data published by the Ministry of Housing, Communities and Local Government shows that the council’s outstanding loans stood at £319million at the end of December – up 28 per cent from the same point a year earlier, when it was £250million.
The borrowing was made up entirely of long-term loans that last more than a year and are generally used to finance large projects or purchases. Last year those included money going towards the Airport Business Park, pier maintenance and housing acquisitions among others.
Councillor Ron Woodley (Ind), who oversees transport, capital and inward investment, said: “Councils borrow to finance their capital investment programmes.
“We have an ambitious capital programme that is investing in our key assets such as the pier, creating more council housing, and delivering road improvements, road and pavement resurfacing programmes, and major regeneration such as Airport Business Park Southend and Better Queensway.
“Any borrowing is undertaken with all necessary due diligence to ensure the best financial position for the council and local taxpayers.
“For example, in 2019-20 the council took advantage of exceptionally low interest rates and borrowed £50m from the public works loan board rates.
“This helped to reduce the councils average borrowing rate from 4.6 per cent to 3.9 per cent. All the borrowing and resultant annual repayments of that borrowing are fully accounted for in the council’s budget and the borrowing undertaken is prudent, affordable and sustainable.
“Any future borrowing will also go through the necessary due diligence and I will personally be keeping an eye on this to ensure we only borrow when we absolutely must.”
When compared with other councils, the borrowing by Southend remains low. Essex County Council’s borrowing last year rose by £30million taking it to £543million in total, which is a six per cent increase on the previous year.
Most of the county council’s borrowing was through long term loans but £2.7million was short term.
The biggest borrower, however, was Thurrock Council which saw borrowing rise by £212million, bringing its total debt to £1.3billion at the end of December.
Unlike other council’s Thurrock’s long-term borrowing is just £239.3million while £1.1billion is tied up in short term loans – the highest level of short-term council borrowing in the country.
During a council meeting last week, councillors agreed the borrowing can increase to more than £2billion by the end of March 2023, the Conservative administration has claimed that stopping borrowing will mean cutting services.
Thurrock’s debt also makes up more than 10 per cent of all outstanding council borrowing in the UK, which stands at £100billion, up nine per cent a year earlier.