BCP Council figures show the authority currently having almost £243m in long-term borrowing – paying out more than £2.5million a year in interest.

The borrowing figures include two loans, totalling £25m, taken out in August and repayable in 2068 and 2069.

It also has £2m in short-term borrowing repayable towards the end of November.

The authority’s audit and governance committee heard that the council currently has a £151.5 million investment balance although this will reduce by the end of December when un-used Government finance, offered for Covid support, has to be returned.

Director of Finance Adam Richens said the council aimed to set a balanced budget for 2022-23 despite a £7.6m forecast net overspend for the current financial year to April 2022 and the risk of not meeting a £7.5m target for savings through streamlining services, of which £5.1m at the time of the latest public report, remained to be found.

Mr Richens said he expected that an update in December would show an improvement on the balances although the council still had, in his words, “significant financial challenges.”

The meeting heard that tougher borrowing rules for councils currently being considered by the Government and the main lender to local authorities, the Public Works Loan Board, were unlikely to have an impact on the authority’s current borrowing plans, including the finance for the Poole Carter’s Quay housing scheme.

Mr Richens said the new rules being considered from April are expected to stop councils borrowing for investment or commercial purposes but he did not anticipate this impacting on any of the BCP council’s current work.

Cllr David Brown said the risk around the council finances remained a cause for concern although the Government’s budget did appear relatively positive for local government by offering a three year settlement, which would help planning, rather than previous annual agreements.

The committee heard that current low interest rates had helped the council achieve a predicted £626,000 underspend on its borrowing forecast, the total being helped by a £60,000 bonus on investment income above predicted levels – although the authority is still expected to pay more than £2.6m in the financial year in interest on its overall borrowing.