CONCERNS have been raised after Fylde Council announced it will have to go £8.5m in the red to maintain its current services.
In a mid-year audit meeting, councillors met to debate the borrowing of £4.7m on top of existing long-term debt levels of £3.8m.
The cash is needed to pay for the area’s wheelie bins and bin wagons, improvements at the crematorium and chapel, changes at Ashton Gardens, refurbishments at St Annes Pool, upgrades to the computer system in the council’s revenues and benefits department, regeneration schemes, and work at the council’s Snowdon Road vehicle depot.
The report refers to current borrowing levels, saying at present they “reflect the level of external debt which, while not desired, could be afforded in the short term, but is not sustainable in the longer term”.
Coun Linda Nulty, Fylde Council, said long-term interest rates are worrying, should the council borrow funds from the Public Work Loans Board, part of HM Treasury, as suggested in the report.
She said: “The interest rate goes up quite dramatically by March 2015.”
Depending on what type of loan the council chooses for external borrowing, whether it is five, 25 or 50 years, interest rates slowly rise, increasing by 0.10 per cent every four months between 2014/15.
Coun Liz Oades said: “We are spending more money than we are taking in. I don’t know how much longer this level of borrowing can continue.”
Coun Karen Buckley, Fylde Council cabinet member for finance and resources, said: “Low interest rates at the moment mean we can borrow money cheaply to invest in services to make them more efficient. That saves money on our revenue budgets which keeps council tax bills down.”
The breakdown of the cash needed includes £900,000 for the crematorium, £337,000 on the Snowdon Road Depot improvements, and £250,000 on upgrading IT systems in the revenues and benefits department.
Coun Buckley added: “We need to borrow £1.3m to buy the new recycling bins recently delivered to residents across the borough. We also need to borrow £680,000 to replace some of the fleet of bin and recycling lorries.”
Paul O’Donoghue, Fylde’s chief financial officer, said: “Fylde isn’t alone in this position.
“The key thing is the repayments are affordable. The re-payment costs are covered,”