RISING interest rates could lead to Blackburn with Darwen Council reverting to long-term borrowing.

Between March and June this year, the council borrowed more than £60million from organisations including combined authorities, police forces, pension funds and other councils.

In a report to the audit and governance committee, the council’s director of finance and customer services, Louise Mattinson, said: “Over the period as a whole, net borrowing was fairly stable, though levels of short-term borrowing and cash balances did vary - they were not, as would normally be the case, at their lowest at March 31, because anticipated higher levels of spending around the year end did not take place.

“Investments have been, and will continue to be kept short term, and mainly in liquid deposits.

“As has been noted, interest rates, while both low and volatile, have tended to be moving upwards.

“This increases the possibility that it may be more in the council’s interest, in the medium to long term, to move towards taking more of its borrowing need in longer-term borrowing.

“Such a decision depends on taking a view as to likely future interest rates - both for borrowing and investment.

“Future rates will always be uncertain, and any such change would only be adopted after extensive deliberation and support from the council’s treasury advisers, Arlingclose.

“This would be a departure from the strategy of the last few years, which has focussed entirely on internal borrowing and short-term borrowing, and could result in short-run pressure on interest budgets.

The treasury management report, which will be presented to the audit and governance committee next week, highlights the authority’s investments and borrowing between March 1 and June 30.

At the end of the quarter, the council had about £21m invested, compared to around £17m at the start of the period, with a return on investment of 0.4 per cent.

Among the fixed-term investments made were £5m to Eastleigh Borough Council, £5m to Cornwall Council and £3m to West Yorkshire Police.

And the council took a number of short-term loans totalling £62m.