Eastleigh Borough Council's finances to be reviewed by government

A capital review will begin next week to look into what actions the local authority can take to reduce its financial risk.

The Department for Levelling Up, Housing and Communities previously said it would work with the borough council to better understand its financial position.

News of the review was revealed in a letter from parliamentary under-secretary for Local Government and Building Safety, Lee Rowley MP, who described the Lib Dem-run council as "one of those with a larger amount of debt".

READ MORE: Eastleigh Borough Council faces government investigation for debts

Council leader, Cllr Keith House, said he supports the review stating that the government is “finally trying to learn how local councils work”.

But Eastleigh MP, Conservative Paul Holmes, hit out at the authority, branding it a “casino council” which is “gambling with taxpayers' money”.

Paul Holmes, MP for Eastleigh. (Image: Paul Holmes.)

Mr Holmes, who previously said the council's debt will amount to £670m by 2025, said: “Councils have to treat tax-payers money with care and I think that the tactics that we’ve seen by Eastleigh have put taxpayers' money at risk.

“Eastleigh for a long time has borrowed money on unsecured rates to buy up commercial properties and get the income.

“That works when interest rates are low. It doesn’t work when interest rates are high.

“Eastleigh has one of the largest debt levels in the country. Eventually (it) will have to cut services to fund and pay off the debt.”

But Cllr House said the council has protected services and told the Echo: “Like many councils, Eastleigh has over the last 15 years used borrowing powers to support our commercial activity and generate income.

“This is what has protected Eastleigh residents from the Borough Council having to make cuts."

Eastleigh Borough Council leader, Keith House.

He said he is pleased to help the government with the review adding that residents will benefit if it leads to “better funding for all councils from the government after years of cuts”.

Mr Holmes said he has warned of financial troubles since he was elected in 2019 adding that Eastleigh's borrowing began before cuts to local government funding were made.

He added: "They should get back to running the council by filling up potholes and running services than being a property speculator and owner."

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