County spends £45m it does not have

11.23.32am GMT Thu 12th Nov 2009

The Tory-run County Council this week has bought the freehold to two properties it currently rents for £45 million. As this was not in the County's budget the County Council has had to borrow the money over a 20 year term at a 4% interest rate. The County Council is limited on how much it can borrow and because of this purchase has had to increase its borrowing cap.

This purchase comes at a time that the County is consulting on what services and budget it can cut for next year's council tax increase. In the County's own documentation they suggest a mere £5m return in 20 years time.

Chris White, Liberal Democrat Opposition Leader, said: 'This decision was taken over a month ago in secret. We were surprised that at a time when the council is talking about hard times and difficult budgets that money can be so easily splashed around on buying property for a possible, and by no means definite, financial saving a long way in the future.

'We have watched bankers splash around cash like this over the last few years and look where that got us. It is a shame that this was not borrowing for projects from which residents would see real, tangible benefits - like improving the state of our roads.'