More than £20million of Scottish Borders Council cash is to be spent every year on charges for the authority’s £195.9million debt.
A loan budget of £21.3million for the next five years was approved last month, covering the costs of interest as well as paying back the original sum borrowed for capital projects.
SBC’s chief financial officer David Robertson said the amount is less than 10 per cent of its total gross revenue budget, meaning the debts are affordable.
But John Lamont, MSP for Ettrick, Roxburgh and Berwickshire, believes the annual loan figure is unsustainable.
Mr Lamont told The Southern: “This is tens of millions of pounds that could be being spent on improving infrastructure and services in the Borders, but instead is going to waste. The council have a duty to local taxpayers to ensure that they get value for money for their council tax, and an effective debt repayment strategy is urgently needed to ensure that these costs do not continue to spiral.”
A Scottish Government report revealed earlier this month each council’s debt levels, with SBC’s £195.9million figure placing it 11th highest out of 32 authorities. Mr Robertson said the council’s capital borrowing is mostly via long-term loans at favourable interest rates.
He added that the debt is monitored and regulated by a prudential code which limits how much SBC can borrow. That ensures the debt remains affordable in the short term and financially sustainable in the longer term, according to the financial officer. Mr Robertson told us: “Wherever possible, the council seeks to actively manage its debt portfolio to ensure we repay our debts when required to, or to reschedule these debts to take advantage of beneficial interest rates wherever it is sensible to do so.”
But ex-Scotsman journalist Bill Chisholm, who has previously raised concerns about local government finances in Scotland, believes the current system is proving untenable.
In total, Scottish councils owe over £9.5billion, working out at £1,810 for each person in the country. The Jedburgh resident said: “The fact that Scottish Borders Council’s monetary situation is no worse than other local authorities does not make the situation acceptable.
“Perhaps the solution might be to abolish all 32 councils and replace them with a single national authority for local services with a similar divisional structure to the incoming Scottish Police Force.
“It would seem the cost of local democracy – like many other public services – is no longer affordable.”