Government orders Eastleigh Borough Council to reduce its debt

Council leader Keith House said debt-funded developments had created jobs

The government has intervened to reduce a council's "significant debt" which has arisen from property investments.

Ministers have issued a "best value notice" to Eastleigh Borough Council in Hampshire, ordering the cut.

The Liberal Democrat-controlled authority is among the UK's biggest borrowers relative to its size, a government-commissioned report found.

However, the study found "few concerns" over the finances and said the "overall picture is positive".

The council owns properties including The Ageas Bowl, the home of Hampshire Cricket

Eastleigh Borough Council's property portfolio includes The Ageas Bowl - the home of Hampshire Cricket - as well as housing developments and leisure centres.

The report, from the Chartered Institute of Public Finance and Accountancy (CIPFA), was ordered by ministers in February and published on Tuesday.

It said the council owed £525m in March 2022 - the fourth highest borrowing relative to size of all UK authorities.

CIPFA concluded: "Despite the council's apparently high indebtedness, we have identified few matters of major concern."

Eastleigh MP Paul Holmes has previously criticised the authority's finances in parliament

However, the government said it "remained concerned" that the council's debt was 45 times its core spending power.

The best value notice orders the council to "reduce and manage the overall debt" and put future investing on hold.

On Friday, council leader Keith House said extra financing would be needed to continue building the authority's One Horton Heath development of up to 3,000 homes.

Responding to the best value notice, Mr House said Eastleigh's "prudent investments have protected essential public services".

He said commercial income had supported services and reduced council tax while development projects had created jobs.

Conservative MP for Eastleigh Paul Holmes said the council's borrowing was in line to reach "almost £1bn" after costs accrued from One Horton Heath.

He said the "profligate spending" was "playing fast and loose with taxpayers' money".

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