The Liberal Democrats have been accused of “disgraceful scaremongering” after sending out leaflets that claim Wokingham Borough Council is about to rack up almost £700 million of debt.

They have told people across Wokingham that by 2023, the Conservative-run council will need to use taxpayers’ money to pay off £676.8 million of debt and the interest. 

They came up with this figure by adding up the council’s projected external borrowing (£476.2 million) and internal borrowing (£200.6 million).

“Internal borrowing is transferring money from one of our purses to another, so you can’t call that borrowing,” said Cllr John Kaiser, executive member for finance.

“We’re not paying any interest on that because it’s our money.

“This scaremongering is just disgraceful, it’s political weaponising.

“So many people rely on services provided by the council, so to put this scaremongering out now is dreadful.”

He added: "It's just not true, it's just a lie."

In September 2020, the council’s net debt stood at £83 million and its Audit Committee states that level of borrowing is “within prudential limits”.

That means 0.4 per cent (£7.52) of the council tax paid by people living in Band D properties is used to pay off that debt and the interest payments.

The council has borrowed a total of £324 million, but £241 million of that money has been invested in projects which are expected to provide returns, so it is not considered to be debt.

However, Cllr Lindsay Ferris, leader of the Liberal Democrats in Wokingham, is adamant that the Conservative councillors running the council have been “profligate” and “overstretched themselves”.

“They are just borrowing more and more money all the time,” he said.

“It is the council taxpayer that has to pay any interest. This year, they have had to pay just under £8 million in interest.”

The council has lost almost £5 million during the pandemic, because it has been forced to close car parks and leisure centres and offer business rates holidays and council tax reductions.

Cllr Ferris is concerned that the council may struggle to pay off the debt and interest in the coming years if it continues to lose out on this vital revenue and interest rates rise.

He said: “We have had the biggest downturn in living memory, and they are still ploughing ahead, wacking up borrowing while the interest rates are low.

“But what happens when the interest rates rise?”

“It might be all right in 2021 and 2022, but at some point the day of reckoning will come.

“I have been very concerned about the level of borrowing. I’m not saying you don’t need to borrow to invest, but you have to do it in a reasonable and sensible manner.”