Eastleigh council debt balloons as more borrowing forecast

The total borrowing of Eastleigh Borough Council stands at £585.3m, according to the latest draft accounts for the 2024/25 financial year, reported by chief financial officer Sarah King.

The Liberal Democrat-run needs to top up its borrowing to £622.7m to keep running up top March next year.

Paul Holmes, Conservative MP for Hamble Valley and former Eastleigh MP, said the council’s borrowing is “spiralling out of control”.

'Throwing money away'

The council's net worth has plummeted from £107.5m to £97.1m and it will go bust if it does not refinance its debt.

A formal “going concern” statement within the report warns that if this is not done, the council will “be unable to stay liquid”.

It comes as the council’s beleaguered One Horton Heath housing project drags on, with no houses built in the eight years since the scheme begun.

The housing project accounts for £500m of the authority's overall borrowing of £585.3m.

Cllr Steve Broomfield, who represents Fair Oak and Horton Heath on the council, branded the debt as “absolutely unbelievable".

Cllr Steve Broomfield (Image: Newsquest) “Long term, with devolution coming up who would want to amalgamate with us?”, he said.

“If you were Southampton City Council, or new Forest District Council, would you be clapping your hands at the amount of debt you would be inheriting? No.”

READ MORE: Costs spiral as millions added to housing scheme blasted a ‘vanity project’

He added: “We seem to be throwing money away, like a gambler at a roulette wheel throwing money in hoping they will strike lucky.

“Eastleigh Borough Council taking on One Horton Heath after private developers dropped out is like a local corner shop taking over Sainsbury’s.

“The council is very good at spending money, but at this stage we cannot afford for One Horton Heath to fail as someone has got to pay the £500m back.”

The draft accounts report adds that the council recognises that its level of total borrowing is close to its approved borrowing limit.

Houses are currently being built at One Horton Heath.

'Casino council' 

Mr Holmes said he has written to the Secretary of State to take urgent action.

(Image: PA) He said: “I have warned since being elected that Eastleigh Borough Council was being run by the Liberal Democrat administration as a ‘casino council’.

“That’s why the last government put them on an enforcement notice to reduce debt, now, the new government has lifted that, and borrowing has spiralled out of control.”

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In response to the latest accounts, a council spokesperson said it is “taking action where private developers have failed”.

They said safeguards limit the council to only borrow what can afford to be repaid.

The spokesperson said: “Our borrowing position has been scrutinised in detail by CIPFA, the professional body for public sector finance, on behalf of the Department for Levelling Up, Housing and Communities, and continues to be audited externally.

“We have also undergone a Local Government Association corporate peer review, which examined our financial practices in depth.  Both reports were positive.”