Borrowing by Lancashire County Council increased by £82m over the last 12 months to stand at more than £1.1bn.

Figures from the Ministry of Housing Communities and Local Government (MHCLG) show that the authority’s outstanding debt rose by eight percent in the twelve months to the end of 2019.

According to papers presented to the council’s budget-setting meeting last month, the county will pay almost £25m in interest charges on its debts out of the £844m which it has to spend on day-to-day services over the next year.

Most of the money borrowed by the authority is used for funding capital projects like new, upgraded or repaired buildings and roads, as required by government rules which limit the reasons for which councils can go into debt.

The region’s roads will get the largest slice of capital investment over the next 12 months, with repairs and redesigns costing just over £40m.   Schools are next in line, receiving £27m from the investment pot.

Conservative council leader Geoff Driver said that the authority was below the average percentage increase in debt which had occurred across all councils – and yet was still investing to improve services and facilities in the longer term.

“In every year since we took control in 2017, we’ve added an extra £5m to the budget for highways maintenance.  And when we repair roads, we don’t just strip the top surface off, but – if it needs it – the hardcore underneath as well.   That costs money and we borrow to do it.

“We’ve significantly increased the amount spent on repairs to schools and, of course, we create new assets – such as a new respite centre for children with sometimes profound disabilities.

“These things inevitably increase the debt – but because we’ve got the county council’s finances on a firm footing, we’re able to do that,” County Cllr Driver said.

But Labour opposition leader Azhar Ali said that the strategy was putting Lancashire residents in “huge debt”, but not repaying them with better services.

“This shows the smoke and mirrors of this Tory administration – they say they are reducing the county council’s spending, but actually they’re just maxing out its credit card.

“The people of Lancashire are not seeing major improvements in their roads or efforts to stop flooding, while adult and children’s services are crying out for resources.

“Lancashire County Council cannot carry on with the reckless actions of Geoff Driver,” County Cllr Ali said.

But County Cllr Driver said Labour’ comments “demonstrate that they don’t understand how the local authority should manage its debt to the best advantage of the people of Lancashire”.

The council has recently secured a lower interest rate for around a third of its debt. 

Only around a fifth of the authority’s capital delivery programme during 2020/21 is expected to be funded by borrowing, with the majority being financed by grants secured for individual projects. 

Outstanding council borrowing across England stood at £100 billion at the end of December – a nine percent rise from a year earlier.