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Costs involved with £88m borrowing questioned
17/02/2022
Tories question borrowing at a time when the county’s portion of council tax is going up by the maximum permitted
by Andy Mitchell, Local Democracy Reporter
Opposition councillors argue that plans to rescue Oxfordshire’s road and bridge projects will hit council tax payers in the pocket – even if borrowing falls short of the anticipated £88.4 million.
Oxfordshire’s Fair Deal Alliance – the ruling body of county councillors made up of Liberal Democrat, Labour and Green members – has had its first budget since taking power criticised by predecessors from the Conservative party.
The standout issue is borrowing to fund capital projects – big permanent items rather than services – with those in power now arguing it was made necessary by the Tories leaving projects “underfunded”.
The overall potential borrowing requirement set out was £99.2 million but £10.8 million of that was shaved off by additional contributions, savings and grants.
More than £27 million of the borrowing would be for the A423 Improvements Programme, including work on the replacement of Kennington Bridge.
Another £50million is expected to be borrowed as a contingency for ongoing plans including housing infrastructure fund (HIF) projects. It would only be sourced if needed but its inclusion means paying back all borrowing has to be catered for at a cost of £5.3 million per year.
That is a cost the Tories say cannot be justified at a time when the county’s portion of council tax is going up by the maximum permitted.
Leader of the opposition Councillor Eddie Reeves (Con, Banbury Calthorpe) questioned why the council was set to “squirrel away” some of an extra £9 million into back-up funds, adding: “Not all capital expenditure is bad, and I do welcome any spending that can be done to realise the HIF and other important projects.
“However, we raised at budget scrutiny that some £50 million had very little by way of plans attributed to it. More work, more clarity, therefore is required in order to be assured on these benches that the money is going to be spent wisely.”
Councillor Yvonne Constance OBE (Con, Shrivenham) acknowledged the council “should be borrowing for” the infrastructure projects but said: “It is presented as prudential and I think that claim is purely based on the idea that we will draw on it only if we need it.
“That sounds fine but putting it in your budget has added £5.3 million to the interest charge to be added to the revenue account. Residents are paying for that borrowing whether you use it or not.”
Cabinet member for community services & safety Councillor Neil Fawcett (Lib Dem, Abingdon South) hit back by saying the Conservative argument was “confused” and criticised them for not offering an alternative.
He said: “The £9 million extra is not government generosity, it is just that our budgeting was realistic and we ended up with a little bit more cash than expected.
“Given what the country and Oxfordshire has been through in the past couple of years and the various things we are finding out about how poorly the previous administration counted the finances of some of the major projects, it is absolutely sensible that we have some extra money.
“It seems the party opposite is in favour of us making provision for each of the major scheme cost overruns. When you add all of that together, you get quite a large amount of the capital we are having to borrow but then they are against that.
“I don’t quite know where they stand, maybe that is why they could not manage to get their amendments (alternative budget) together this year.”
Published: by Banbury FM Newsteam