CASH-STRAPPED Scottish Borders Council’s latest loan takes its borrowing this year to well over £50m, it has emerged.

An unprecedented borrowing spree by the local authority continued last month with yet another £10m loan secured from UK Treasury funds, bringing the 2024 total to £56m and adding significantly to its indebtedness.

New data published by the Public Works Loans Board [PWLB] shows the Conservative/independent-controlled council set up the £10m facility on June 28, agreeing to pay interest of 5.27 per cent, and with a maturity date in June 2025.

When the council borrowed £10m from the PWLB in March at 5.39 per cent with maturity, a year later it was confirmed the interest paid would total £539,000.

All of that comes on top of the £1.6m in interest which will accrue from £30m borrowed in January at 5.35 per cent. In addition, the council arranged a further loan of £6m at 5.4 per cent in April.

Despite these borrowing levels, draft annual accounts for 2023/24 maintain that the Borders authority remains ‘under-borrowed’ and that the approach to borrowing is ‘prudent and cost-effective’.

Director of finance Suzy Douglas, inset, said: “The council continued to maintain its under-borrowed position, only borrowing £40m in the final quarter of the year to support capital spend compared to £70m originally anticipated. This means that the capital financing need was not fully funded by external loan debt and instead internal cash supporting the council’s reserves, balances and cash flow has continued to be used as a temporary tactical measure. This strategy remains both prudent and cost-effective.”

The accounts show the authority’s outstanding external debt as at March 31 was £251m. The average rate of interest paid on a portfolio of more than 40 separate loans was 4.53 per cent, while the amount owed to the PWLB increased by more than 15 per cent from £184m in March 2023 to £212.4m a year later. That total will have increased by a further £16m since the end of the last financial year.

The PWLB money is used to pay for major works. As Ms Douglas explains, the £90m capital spend in 2023/24 represents the highest amount the council has delivered, demonstrating significant investment in key projects across the Borders.

The authority, in a cross-party budget statement issued in February, revealed that as part of the 2024/25 budget there would be a freeze on council tax.

However, it was planned to invest £121.6m in major capital projects, including new schools and care facilities, as part of a 10-year capital plan worth over £450m.

This year’s capital programme is set to cost £30m more than last year’s record spend on project delivery.

Ms Douglas added: “The capital financial plan aims to ensure that capital borrowing is within prudential borrowing limits and remains sustainable in the longer term. In this regard it is important to recognise that capital investment decisions taken now have longer term borrowing and revenue implications which have the potential to place an undue burden on future taxpayers.”