An opposition group believes Northampton Borough Council could be heading towards “financial meltdown” after a report revealed the authority took around £10 million out of it savings in the past year.
Papers for Wednesday night’s cabinet meeting revealed the borough had taken out £9.65 million from its reserves between March 2015 and March 2016, but only put in just over £5 million.
The Liberal Democrat opposition on the council says it is alarmed at the rate “rainy day money” is being taken out.
This week the authority approved taking a further £500,000 from reserves to spend on legal fees in chasing the £10.25 million loaned to the Cobblers.
The council now has £22 million in savings, which would be depleted in six years at the current spending rate.
Councillor Sally Beardsworth (Lib Dem, Kingsthorpe) said: “These two reports tell the story of the Tory administration’s handling of finances since they were selected in 2011.
“They have borrowed money to finance their pet projects, which taxpayers will be paying for in years to come, and now they are raiding the reserves to prop up finances.”
Councillor Beardsworth has previously described plans to de-pedestrianize Abington Street and to expand Northampton Museum and Art Gallery as such “pet projects.”
Abington Street was funded using a £3 million loan, which will have cost £6 million in total by the time it is paid back in 20 years’ time.
The Liberal Democrat Group has previously argued the 2018/19 budget will be £6.6 million in deficit because of the various loans the council is repaying.
She added: “The Conservative administration took over from the Liberal Democrats with finances in a healthy position, but they have squandered that legacy and the finances are heading for a meltdown.”
Northampton Borough Council has been contacted for comment.