Fears rate rise could leave Borders council struggling

That increase, from 0.25% to 0.5%, was the first for 10 years, and further rises are expected to follow.

South Scotland Conservative list MSP Michelle Ballantyne, a former Borders councillor, has asked the Scottish Government what help local authorities facing difficulties in repaying their debts will get from Holyrood.

Mrs Ballantyne submitted a written question to finance secretary Derek Mackay last week, and he told her: “We have treated local government very fairly despite the cuts to the Scottish budget from the UK Government.

“The overall increase in spending power to support local authority services this year amounts to £383m or 3.7% compared to 2016-17.

“The 2018-19 local government finance settlement foresees an increase both in revenue and capital investment.

“Together with the additional power to increase council tax by up to 3%, worth around £77m, this will generate an increase of 1.6% in overall resources to support services next year.

“Decisions on use of reserves are the responsibility of individual local authorities to take where it is prudent and sustainable to do so.”

Interest on Scottish Borders Council’s £271m loan portfolio currently costs in excess of £10m a year.

Mrs Ballantyne’s question asked “what support government can provide to local authorities that face difficulties in service repayment of their debt because of interest rate increases”.