Debt-laden Eastleigh Borough Council votes for extra housing spend

Conservative MP for Eastleigh Paul Holmes said the council had ignored a government instruction to reduce its debt

A council which was ordered to reduce its debt levels by the government has voted to spend an extra £154m to complete a housing project.

The budget for Eastleigh Borough Council's One Horton Heath development of up to 3,000 homes has risen from £327m in October to £481m.

On Tuesday, the Liberal Democrat-controlled authority was told in a government notice to stop borrowing.

The council said the investment would deliver jobs, homes and infrastructure.

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

Council leader Keith House, who declined to be interviewed, previously said: "Our commercial activities have supported the creation of jobs and investment in our communities."

The council's cabinet approved the extra spending, authorising an extra £9m of borrowing, on Thursday.

A spokesman said the rest of the £154m might comes from sales or lettings in early phases of the development or from the sale of future phases to other partners.

Conservative MP for Eastleigh Paul Holmes said: "They've said they mustn't borrow any more and what we saw last night was an absolute ignoring of that.

"My concern is that residents here who are noticing the debt is going up will have to pay that price in the long run."

Independent councillor Gin Tidridge said the borrowing was a "huge risk for residents"

Independent councillor Gin Tidridge said the meeting was told the authority had set no ceiling on the costs.

She said: "If everything goes to plan, great. But if it doesn't, that represents a huge risk for residents."

On Tuesday, a government best value notice said the council should reduce its debt.

The notice said the Hampshire authority should "put in place a moratorium on new debt-funded asset investment".

However, a government commissioned report, published alongside the notice, found "few concerns" over the council's finances.

The report, from the Chartered Institute of Public Finance and Accountancy (CIPFA) said the "overall picture is positive" despite the council's "high indebtedness".

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

Follow BBC South on Facebook, X, or Instagram. Send your story ideas to [e-mail].