Council defends £20.4m debt

Recent figures revealed the council has a Government-approved loan debt of £20.4 million and Upper Bann MLA Dolores Kelly, formerly a Craigavon Borough councillor, raised concerns that should some councils merge under the Review of Public Administration, others will be burdened with the debts of “high-spending councils”.

Banbridge is in line to merge with Armagh City and District Council, which has a debt of £27.6 million, and Craigavon Borough Council which has a debt of around £12 million, should the review go ahead.

Councils can borrow from a number of sources including banks but Banbridge council’s loans are owed entirely to the National Loans Fund - the Government’s main borrowing and lending account which generally has a lower interest rate.

While under this scheme Craigavon council has debts just £1.5 million, the council’s communications officer confirmed their total debt - including the debt acquired from other sources - is in the region of £12 million.

Mrs Kelly said she is concerned that “prudent” councils will suffer in a merger with councils which have higher debts.

“Under the new RPA proposals it would appear that Craigavon council will be taking on the debt of Armagh council and Banbridge council therefore ratepayers within Craigavon will be paying back the debt of other councils,” she said.

The SDLP Assembly member called for those councils with higher expenditure to explain themselves. In response to this a spokeswoman for Banbridge District council listed the facilities developed and provided within the district in the past 20 years - which they say could not have been funded through rates and grants alone.

“The council borrows money to fund capital projects in much the same way as a homeowner takes out a mortgage,” said the spokeswoman. “Capital projects encompass everything from buildings, vehicles, plant to equipment.

“Some councils borrow from banks although most make use of the relatively low interest rates provided under the Government’s Consolidated Loans Fund.

“While Craigavon council’s debt is lower than Banbridge, we understand that Craigavon is considering an ambitious capital programme which could see them rapidly escalate their outstanding loans beyond that of Banbridge.

“Over the past twenty years, Banbridge District Council has accumulated approximately £20 million in debt from government loans.”

Among the facilities funded in this way are Solitude Park, Gilford Community Centre which is currently being built and the refurbishment of both Banbridge and Dromore town halls.

One of the biggest expenses has been Banbridge Lesiure Centre, which required a loan of £6.5 million. But the spokeswoman added that the investment is in the interest of improving the area.

“Banbridge District Council hopes that citizens will continue to use and enjoy the first-class facilities that have been provided through long-term loans. It also believes that ongoing investment will help make the district a more attractive place in which to live, work, visit and invest.”