Following pressure from the Government and our own MP Sir Geoffrey Clifton-Brown, the practice of borrowing by Councils to lend on to others for commercial gain, which has led to many Councils going bankrupt, has been strictly limited. This, together with the increasing interest rates has led the Council to rescinded  on its Recovery Investment Plan (RIP).  

The plan envisaged that the Cotswold District Council would borrow £75 million against the normal income of around £13 million.  The size of this borrowing especially taking into account the repayment plan is completely unsustainable.  

Sir Geoffrey who is the Deputy Chair of the Public Accounts (PAC) has continually raised the issue of the un-sustainable, excessive borrowing of councils leading to severe financial problems as seen in Thurrock. In a recent PAC inquiry, the Permanent Secretary, Jeremy Pocklington, highlighted to the committee his concerns with “councils borrowing disproportionately” and that a new regime was being developed through the Levelling-up and Regeneration Bill.  

CDC Conservative Councillors have consistently opposed the LibDem plans (RIS/P) to do just this and were demanding a referendum due to the large amounts involved, (£75 million) and the fact that this aspect of the Council budget had not been included.   

The Leader of the Conservative Group, Cllr Tony Berry commented:

“Rather than make such a risky plan to cover any possible shortfall in Government grants, they are now resorting to the more normal practice of using the reserves which were left by the Conservative Administration for just such contingencies.”

Commenting, Sir Geoffrey Clifton-Brown MP said:  

“This dramatic U-Turn on excessive levels of borrowing from the Cotswold District council is a return to common sense. Had it not been for the work that I have done on the PAC to tighten the rules on local authority borrowing from the Public Works Loan Board and a debate I held in the House of Commons unsustainably borrowing by councils, this irresponsible plan could have gone ahead.   

“The Chartered Institute of Public Finance and Accountancy (CIPFA) prudential code has effectively prohibited the council from taking this level of borrowing. This work together with the Conservative Group on the council consistently opposing these plans has saved the council from potential bankruptcy.”