HIGH-spending Somerset County Council was today criticised for locking itself into uncompetitive borrowing rates for years to come - just as the Bank of England cut rates to their lowest ever level.The Liberal Democrat-run county has long-term high interest rates on more than £300 million which it has borrowed to fund its spending spree in recent years.
The average rate was about 4.3 per cent - which previously looked good, but not with a base rate now down to just one per cent.
Conservative group finance spokesman Councillor David Huxtable (pictured) said the council could now borrow at rates of less than one per cent.
Councillor Huxtable said: “We have been warning the Lib Dem administration about their huge borrowing and now it has come back to bite them.
“The difference in rates could mean the council paying up to £11 million over the odds this year alone.
“This would put an extra £60 on the council tax for every hard working family in Somerset.”
Somerset Conservative group leader Councillor Ken Maddock said: “The Lib Dems have slipped up big time here.
“They have trebled borrowing in the last six years. Who do they think they are - Gordon Brown?
“We need to act like a responsible council - not like a dodgy hedge fund.
“The Conservatives would reduce Somerset’s dependence on debt and borrow less.
“This is as important to a county council as it is to everybody’s personal finances.”
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As usual the Conservatives are talking rubbish. Base Rate with the Bank of England may be down to 1% - the lowest rate for 200 years - but noone can borrow at that rate. The cost of breaking long term fixed rate interest mortgages for Somerset County Council would be over £12 million. The annual saving by borrowing at the lowest possible rate that SCC could get, would be £1.17 m per annum. So the Conservatives would rather spend £12 m plus now to save £1 m!
ReplyDeleteSomerset County Council has been awarded a 4 out of 4 for Value for Money - let's see if David Huxtable can find a Conservative Council that good in the area.
The amount of prudent borrowing per head of population in Somerset by Lib Dem run Somerset County Council is one of the lowest of any County Council in England.