A HAMPSHIRE council which has reportedly borrowed almost 12 times its spending power has been urged to reassure taxpayers after an interest rate rise on cheap Treasury loans.

Civic chiefs at Eastleigh Borough Council have been asked to explain what impact the one percentage point increase on public works loan board (PWLB) finance will have on taxpayers.

It comes as last year the Bureau of Investigative Journalism revealed that the borough council was one of the four in the country to have borrowed more than ten times their spending power.

The report showed that the authority had outstanding borrowing of £363m, almost 12 times its annual budget of £31m.

As previously reported, the council boasts names such as Pets at Home, Travelodge and Wetherspoons among its tenants and had previously said that its property portfolio brings in more than £5m in rent every year.

Civic chiefs have always claimed that the authority has a “very prudent” budget strategy and uses the income from its investment to protect frontline services and freeze council tax.

Council leader Keith House has told the Local Democracy Reporting Service that the vast majority of the council’s finances will not be affected by the recent interest rate increase.

But Councillor Margaret Atkinson, opposition leader at Eastleigh Borough Council, said the authority should make its position clear by informing residents through its website and newsletter.

“They should be transparent with the public. Some of our residents have concerns about the level of borrowing. It’s extremely high for a small council,”she said.

The Local Government Association said the one percent increase could cost councils an extra £70m a year for borrowing to be undertaken in the next year.

Eastleigh MP Mims Davies said it is time for the council to think “very carefully” about what is “sustainable and sensible to pursue for taxpayers” in the long term.

She added: “ It’s time for taxpayers to understand what the strategy of this council is and what it means to them.”

Hitting back Councillor House said: “The vast majority of the Council’s finances are already secured over the long term and will not be impacted by this change. The Council budgets prudently to protect itself from actions like this from the government that is in a panic over its mishandling of Brexit.”