Reform councillor claims Northumberland council’s borrowing level is ‘not sustainable’

Total external borrowing at the council is forecast to reach just under £1 billion at the end of the financial year, up from £880.9 million in November.

The Conservative-led council borrows to fund the capital programme, including loans to third parties such as its development company Advance.

Leading Tory councillors insist the council is in a good financial position and is well within its borrowing limits.

But speaking at the council’s audit committee, Reform councillor Denise Nicholson raised concerns about the ongoing use of borrowing to fund capital projects.

She said: “At what point does the reliance on the borrowing become unsustainable? I’m not seeing that within the reports.

“What early warning indicators are the members monitoring for reaching that point? What other, sustainable methods of funding for the capital programme are we looking at?

“What I’m reading throughout the reports is that to be able to do all of this, the borrowing strategy is just not sustainable. At some point, we have to stop.”

Reform have continuously raised concerns about borrowing at the local authority since before the May elections last year. During a visit to Morpeth in April, the party’s leader Nigel Farage claimed Reform would slash “unnecessary” spending at the council to reduce debt.

And Hartley ward councillor Stephen Flower urged the council to cut its council tax support scheme, arguing the debt levels were too high and that the council could not afford to be “generous”.

Cabinet member for finance Cllr Nick Oliver said: “We’re operating within the statutory framework. There are lots of checks and we are well within the range that would be deemed as acceptable.

“To answer your point about when it becomes unacceptable, I would say as we reach a point where we’re in danger of breaching those limits. That would be unacceptable and we’ve got no intention of doing that.

“There is no other feasible way to pay for the capital programme. The only other way would be to use revenue funding to pay for capital expenditure, but that would be like saying to an individual household that you have to use your salary to pay for your house without taking out a mortgage.

“Not many of use would be in the position to do that. That would be the analogy.

“Sensible cautious borrowing within the authorised limits is probably the only way we can deliver the capital investment, keep on top of our estate and all of our fleets and capital assets that we have to maintain and eventually replace to provide the services we provide as a council.”