Council debts spiral to more than £16m

Debts at Cannock Chase Council have spiralled to more than £16 million after it emerged bosses had borrowed more cash.

An extra £2.5m loan has been taken out by the council and part of the money, which was taken out during the last financial year, will cover the costs of the new Rugeley swimming pool and other investment projects.

But bosses said they hoped revamping leisure facilities would help them pay back some of the debt. Council chiefs said using the taxpayers' collective credit card was a way to finance major projects and they insist the council can afford the debt.

On an annual basis taxpayers in Cannock Chase pay between £400,000 and £500,000 in debt repayments on the £16m while housing tenants have to fork out £1.4m for their share of the debt which is higher.

Some of the council's debt dates back to projects agreed by councillors decades ago but council chiefs say taking out long-term loans is a cost effective way of delivering investments at an affordable price.

Council leader Neil Stanley said he was satisfied the council could afford to borrow an extra £2.5m and said the plans to revamp leisure services across the district would help to pay back some of that debt.

He said: "Once the leisure vision has been completed the council's subsidy each year to leisure services will be lower and that means we will be able to pay back that borrowing and more.

"If you have an old car that is constantly breaking down and costing a fortune you will be better off if you take out a loan and buy a new car that's more reliable. You are paying off a loan but at the same time saving money because you are not paying big repair bills."

Bob Keen, head of financial management at the council said the borrowing was taken out to prop up the council's resources. "In the past when the council has agreed a project it has been funded out of the council's existing resources but over time those resources will reduce and there will be a need to undertake borrowing," he said.