WARRINGTON Borough Council is confident its borrowing strategy is the ‘right one’ for the borough – despite forecasting a £1.3 billion debt by next April.

Town Hall chiefs insist the projected figure needs to be taken ‘in context’ against secured assets and revenue from its investments.

The assets include Birchwood Park, a site the council bought for £211 million.

It generates revenue through rent, which can be used to deliver services.

The level of debt could hit £1.3 billion by next April and top £1.5 billion in 2021 but a spokesman insists officers are confident that the borrowing strategy is the ‘right one’ for the town.

“It is promoting widespread economic development across Warrington and the surrounding area,” he said.

“We borrow through a range of different loan deals and always source the best possible interest rates available at the time and all of our investments are performing well.

“Our investments generate more than £20 million in revenue each year, which can be put back into delivering vital services for residents.”

The authority is signed into a number of lender option borrower option (LOBO) loans – which are long-term borrowing instruments – with banks.

The council has £68.5 million worth of LOBO loans, with an average interest rate of 4.668 per cent.

But finance officers are trying to renegotiate some of the LOBO loans – and are in ‘quite advanced negotiations’ with Commerzbank over a £20 million loan.

The spokesman added: “We undertake regular business reviews of all of our loans.

“As part of this review, we are looking at options to refinance the current Commerzbank deal at a lower interest rate.

“These types of loans were taken out many years ago when interest rates were much higher.

“There are now more options available to us, at better rates, which we are exploring.

“All the details on the council’s treasury portfolio are reported to the audit and corporate governance committee quarterly and to full council three times per year. These reports are publicly available.

“We also report on our LOBO portfolio and, like all organisations, we constantly keep our loan portfolio under review for more cost-effective refinancing opportunities.”