LOANS totalling £130 million have been taken out by Cumbria County Council over the last 18 months.

Finance bosses have refinanced existing long-term loans and taken out £5 million of new borrowing, a full meeting was told.

Conservative opposition members called the situation ‘unsustainable’ with the council’s debt total at £394 million.

But the move was defended as a way of taking advantage of low rates on long term borrowing and cutting the interest paid on the council long-term debt.

Cllr Ellis, the Conservative for Belah, Carlisle, said: “These loans have quite possibly been rolled over previously. Some of these loans could date back to the early eighties, even as far back as when the council was established. To continue to roll over these loans as they come up, you only really borrow the money once. After that, you’re just paying it back and paying it back.”

Cllr Peter Thornton, the cabinet member for finance, agreed the council had done a lot of refinancing in recent months. But he said the council’s finance chiefs had taken advice from external experts who had advised taking out long term borrowing while fixed interest rates were low.

Overall, it had led to an underspend on what the council usually paid on debt, he said. Cllr Thornton, who represents Kendal Strickland and Fell for the Lib Dems, said: “The benefits from delaying borrowing and locking in low-interest rates have been a major factor in treasury management and produced a very welcome underspend of £1.6 million in 2019-20.”

All borrowing had previously been approved by the full council, he added.

In June the council took out a £20 million loan over 44 years at an interest rate of 2.16 per cent. It was followed by £20 million in September at rates of 1.67 per cent over 50 years, and 1.21 per cent over 10 years.

Finance bosses at the county council were congratulated for its well-managed finances.

Councils nationwide take out loans from the Public Works Loan Board (PWLB) which offers low-interest rates to help pay for major capital projects.

In total, the council has borrowed £369 million from the PWLB over the years, which has its interest rates set by the Treasury.

A one per cent hike in councils taking out PWLB loans was introduced in October.

However, the council avoided the hike and has no immediate plans to borrow again during the coming year, according to a report.