MEMBERS of BCP Council have approved raising the authority’s borrowing limits to more than a billion pounds.

In a close vote of 36 to 33, councillors at last Tuesday’s full council meeting voted on the matter of raising the council’s borrowing limit to £1.334billion.

A report from the audit and governance committee to full council said at £457million in March 2021, council borrowing was “at the lower end of the third quarter when it compared to upper tier authorities”.

Read more: BCP Council's billion pound debt threshold discussed at meeting

The council has already committed to supporting a debt level of £855million over the next five years to 2027, including on projects such as £50million to the Futures Fund, Carters Quay £46m, Green Futures Fund £20m and SEND Capital £10m.

Now, the proposal to increase the debt threshold to £1.334billion would allow the council the headroom to support its Big Plan, the report stated.

“It will be allocated based on prudent business cases that take account of risk, support the levelling up agenda, and will be particularly focused on the delivery of housing or extra care housing related schemes, be that via the councils housing revenue account, or any BCP FuturePlaces Ltd or Bournemouth Development Company LLP led projects.

“It will not be invested in any commercial for yield activity.”

The report also said all schemes should adhere to the “ever-tightening” regulatory framework set down by government and be supported by “strong, robust financial business cases”.

“To emphasise the point already made in the report the CFO (chief financial officer) would not support any further debt being undertaken which would require the general fund budget of the council to finance the revenue implications of taking on that additional debt”, the report said.

Read more: Why BCP Council want to raise debt limit to more than a billion pounds

It also warned councillors to be aware of the perception of having debt levels above other similar councils.

The item provoked debate in the chamber, mainly among members of the opposition who raised concerns about the financial implications this could bring.

Christchurch Independent councillor Margaret Phipps said it was not valid to compare BCP to other local authorities.

She said there needed to be a convincing explanation as to why raising the threshold was necessary.

Independent councillor Stephen Bartlett said the notion of comparing the debt threshold with other local authorities was “absolute nonsense”

“We want to be at the bottom of the table and have no debt”, he added, saying: “We need more prudence and less borrowing.”

Leader of the council, Conservative, Cllr Drew Mellor said any decision over £1million would be a decision for full council.

Referring directly to the concerns raised, he said: “I completely positively and politely reject your statements.

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“We have upped our ambitions to build houses and we are doing that because we want more local homes for local people.”

But former leader, Liberal Democrat, Cllr Vikki Slade cast doubt on the message increasing the debt threshold would send to government in light of the recent capitalisation direction.

“It just isn’t needed. We should reject this and let the next council with a clean set of plans to take the decision as to whether we increase our budget.”

Labour member, Cllr Farquhar said : “It is about perception. We are already in special measures, we are already on the lips of the Secretary of State in a bad way and as discussed earlier I don’t have trust.

“Where was the business case to put in a indicative bid for the Barclays buildings?

“I do not trust in the statement about valid business cases.”

The recommendation to increase the threshold was passed 36-33 with two abstentions.