A LABOUR controlled council defended their plans of ‘historic level of borrowing’ and out-of-borough purchases.

£171 million of borrowing was agreed by Slough Borough Council (SBC) councillors for this year’s finances at last week’s budget meeting where it will help fund its five-year capital programme such as investing in a new £5 million youth hub.

The leader of the council James Swindlehurst said borrowing is currently at a cheap 2.5 per cent rate to support the council’s vast amount of building projects where SBC claims it will get enough income to pay off the loan as well as making a profit.

Borrowing makes up 66 per cent of SBC’s capital financing as funding from central government has significantly reduced over the years.

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Opposing Tory councillor, Dexter Smith, expressed concerns on why SBC had bought a few out-of-borough assets such as an Odeon cinema in Basingstoke for £8 million.

He said: “We’re effectively doubling the level of borrowing over a two-year period.

“We’re now entering a stage of staggering, eye watering levels of borrowing.

“Historically higher than we ever had.

“We’re doing it on the basis of historically low-level interest rates, but those rates could rise.

“We’re not doing it to finance, in every instance, investment in Slough.”

Councillor James Swindlehurst said: “The reason we bought these particular out of borough assets is that they have yields in excess of 6.5 per cent, which means we borrow at 2.5 per cent, we get an income from them of 6.5 per cent and then, therefore, it chugs its way into our revenue budget, helping us fund our services.

“We’ve increasingly been buying more in borough assets because we’re actually beginning to see some of those with a decent yield.”