Berwick MP Anne-Marie Trevelyan has raised the extent of Northumberland County Council’s capital borrowing during an inquiry into the financial stability of local authorities.
The Tory is a member of the House of Commons’ Public Accounts Select Committee, which scrutinises Government spending across all departments. Yesterday, members questioned the Permanent Secretary of the Department for Communities and Local Government, Melanie Dawes, during an evidence session in Parliament.
Mrs Trevelyan said: "Northumberland, my council, is concerned about its sustainability because we have a relatively low council-tax base. It relies on my voters in north Northumberland who are reliable council taxpayers, but we cannot really rely in the medium term on an increasing council tax base coming from some of the poorer parts of Northumberland.
"It [the council] has been borrowing heavily… to try to broaden the business base with a view to the business rates filling what it can see will be a substantial gap in the balance of payments. That concerns my taxpayers particularly, because if one of the business decisions goes wrong, they feel they will be the ones who will have to pick up the tab.”
Ms Dawes responded that the 'capital financing costs across local authorities have been broadly stable over the last few years', but that 'any burdens on revenue budgets that are coming from borrowing increasing or from the capital financing costs increasing through some other way' are factored in.
Mrs Trevelyan then asked: "How can north Northumberland residents feel any confidence that the Department will be there with oversight in case the council is making risky decisions with the view of trying to fill what they consider will be a black hole in ongoing funding streams?"
Ms Dawes told the cross-party group of MPs that it is for local councils to make these decisions, with the knowledge that local residents are able to vote either for or against that council. "Fundamentally, the decisions on how to make those decisions are with the local council, and with the ability to vote for that council," she said.
Council leader Grant Davey said: "While it's good that even Tory MP Mrs Trevelyan acknowledges that providing services to this sparsely-populated rural county is more expensive than elsewhere in the country, she is completely wrong in her other assertions.
"Regular and independent external audits show that Northumberland County Council is well-governed and managed. Our administration does not indulge in 'risky' borrowing - but because of brutal central government cuts to the funding of frontline services, we need to generate additional income to support residents.
"Carefully planned and managed capital investments are providing new schools and leisure centres across the county, as well as essential road improvements such as the Morpeth Bypass. These investments mean jobs for Northumberland's residents, a big boost for the county economy and are in line with the advice of Mrs Trevelyan's own government. The funding she's criticising has provided the local NHS with the cash to build a new hospital in Berwick which she's already welcomed.
"Mrs Trevelyan is, lastly, right that these are business decisions - our administration is in the business of regenerating Northumberland and supporting hard-working residents in all parts of the county for the demands of the 21st century, not blaming 'the poorer parts' that she highlights.
"What really is bankrupt is the Tories' Say No to everything approach - instead we are making this great place even better."