The amount of money borrowed by Norfolk County Council is likely to exceed £1bn within four years, its leaders have confirmed.
They predicted the figure would be reached by the end of 2026, as they justified their decision to increase borrowing to pay for major projects like new schools and the Norwich Western Link.
But opposition councillors criticised the Conservative-run authority’s financial strategy, which will commit the council to pay back millions of pounds every year.
The council had borrowed just over £850m as of the end of May and, as part of its financial planning, the authority has factored in the potential to borrow up to £80m more in 2022/23. It confirmed in the summer that it was paying almost £31m a year in loan interest.
Its leaders have long called for central government to provide greater funding, but in the absence of what they see as a satisfactory settlement, and in order to keep council tax down and continue to pay for major projects, they are prepared to increase their borrowing, while making cuts to their spending.
Councils cannot borrow to finance day-to-day services, so they must run balanced budgets. They can borrow for capital investments.
At a meeting of the full county council on Tuesday (September 11), it faced tough questions over its financial strategy.
Terry Jermy, Labour county councillor for Thetford West, asked when borrowing was likely to top £1bn and if the government’s recent mini-budget would have financial implications.
Andrew Jamieson, cabinet member for finance, said: “Borrowing probably should tap £1bn over the next four years or so.
“The important thing to remind ourselves is that our borrowing is at a fixed rate, or at least 99pc of it is.”
Mr Jamieson said that means the rates on money already borrowed would not increase.
He said borrowing had been done at a time when borrowing rates were at an historical low of 1.8pc.
He said: “We took advantage of that to put in transformational changes in a number of key areas like special educational needs provision, with £120m on that alone.“
The council is likely to have to borrow to cover some of the cost of the £251m Norwich Western Link road, if the government does agree to fund 85pc of the controversial scheme.
Mr Jamieson said future borrowing plans will be set out during the course of the council’s budget-setting process.
Liberal Democrat Saul Penfold, who represents North Walsham West and Erpingham, asked Mr Jamieson if prime minister Liz Truss’s economic strategy had been based on his policy of ‘borrow, borrow, borrow’.
Mr Jamieson simply replied “no”.
The council is currently in the midst of its budget planning process, with a need to save £60m in the next financial year.