A FINANCE expert has expressed fears over the council’s level of borrowing topping £1 billion.

The council says it borrows to fund its approved capital investment programme in accordance with its prudential indicators.

At the end of February, the amount of borrowing totalled £845.3 million – an increase of £124.3 million from March last year.

It is made up of money market loans, local authority loans, public works loan board loans and temporary loans.

However, the council’s investments – which cash that is borrowed is partly used to fund – totalled £310.4 million.

The council is in receipt of two loans from Commerzbank – a £5 million loan and a £15 million loan.

It is also in receipt of three loans from Barclays – a £5 million loan, a £10 million loan and a £25 million loan.

The council’s level of debt was expected to hit £976 million at the start of this month.

But it is projected to top £1.3 billion by April next year, and more than £1.5 billion in 2021.

Penketh resident Chris Haggett, a retired chartered public finance accountant, believes the exposure to the high level of debt is worrying.

Commenting on the forecasts, he said: “I wonder how many Guardian readers are aware that, by the end of April, Warrington Borough Council’s total borrowings will have reached the landmark figure of one billion pounds.

“The council estimates that in twelve months’ time the total it owes will have increased to one and a third billion pounds.

“This money is being borrowed not just to finance capital expenditure but, increasingly, for its ‘invest to save’ scheme and follies like Redwood Bank.

“Hold on to your seats, folks – we could be in for a bumpy ride!”

In order to minimise the revenue cost of debt, the majority of the council’s borrowing is at interest rates fixed for the duration of the loan.

The borough’s finance chiefs have told councillors the authority is signed into a number of 40-year agreements with banks, although it has been negotiating with firms over the deals in place.

It has also been stated the council could be able to ‘refinance’ its arrangement with Commerzbank – and that Commerzbank has made several offers which have been ‘turned down’ as the authority thinks it can get a better deal.

Despite the concerns, Town Hall chiefs say they are confident the borrowing strategy is the ‘right one’ for the borough.

“It is promoting widespread economic development across Warrington and the surrounding area,” said a council spokesman.

“All of our investments are performing well as per the report to the audit and corporate governance committee meeting of March 20 2019.

“The borrowing figure is expected to rise in line with Warrington’s approved three-year capital programme, agreed by the full council on February 25 2019.

“The current Commerzbank loans are causing us no issues and we treat all loans as part of our regular business review.”

During the leader’s forum this week, council leader Cllr Russ Bowden told residents the authority is looking for long-term investments.

He added: “Obviously, the council is borrowing a lot of money to make those investments.

“Is it real debt, would be the question I would ask?

“But the point about capital investment is that you have got an asset so, if we needed to, we could offload those assets.

“If the overall indebtedness to the council was a significant problem, we would offload those assets.”