BLACKBURN with Darwen Council has switched its financial strategy to longer-term borrowing to avoid being caught out by uncertainty in the markets caused by Brexit.

The council’s director of finance, Louise Mattinson, said the council had been borrowing cash on a short term basis from other local authorities.

But changes to interest rates meant it made more sense to switch to long term borrowing, she told members of the council’s audit and governance committee.

The council fixed four loans totalling £35 million to be repaid over the next 10-17 years.

Ms Mattinson said: “The Bank of England rate has remained at 0.75 per cent but there is a lot of uncertainty in the market caused by Brexit.

“Last month we started to see a lot of investors getting out of stocks and shares and into government debt.

“This reduces the rates that we can borrow at from the Public Works Loan Board.

“Over time our short term borrowing has increased while rates are low but if they started to rise we could be caught out.

“We have got to a point where our short term loan portfolio is £70m but we have converted half to fixed medium and long term loans.”

Cllr Ron Whittle said: "We have taken these medium to long term loans at a higher rate than we could have got short term.

"Although it will cost us more in the short term, it will be better for us over time.

Cllr Jim Casey said: "When we had some training on this we heard we were slightly overexposed in short term loans so it is good to see this has been addressed."

Ms Mattinson added: "It does put a cost on our revenue budget but we have to balance the risk of not doing it with having to balance the budget.

"Given the volatility of the financial market with Brexit, we could not take that risk."