A CASH-DRAINED council has less than a year to pay back tens of millions of pounds to other local authorities it had borrowed from.

Slough Borough Council (SBC) has until September 2023 to pay off the £266m loan it took from multiple local authorities, who now want their money back and are refusing to lend to SBC again.

The council, which has a borrowing debt of £760m, did not respond when asked which local authorities it had loaned from and how much it borrowed per council.

To pay back its debtors, SBC is selling up to £600m worth of its property and land. It has so far accumulated £162m from the sales and needs to raise another £40m this financial year and £60m in 2023/24, but that £60m could change to £100m to bank in £300m.

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SBC borrowed that money short-term at a time of cheap interest rates in order to buy assets. However, due to historic accounting errors, the council could not afford to pay back what it borrowed.

This is one of the main reasons why the council effectively declared bankruptcy in July 2021, resulting in mass asset sales, about £20m savings each year for the next seven years, and government stepping in to oversee its recovery.

Chief finance officer Steven Mair said at Thursday’s overview and scrutiny meeting: “If we do that [sell £300m worth of assets] then we can repay all of the short-term loans the council has. We can now repay all of the loans up to March of next year and we have to sell more next year to repay next year’s loans.”

Rising interest rates are also affecting the council’s temporary borrowing where it once enjoyed low interest rates of about one per cent but has now risen by up to five per cent.

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Mr Mair warned if SBC didn’t start selling assets or generate £100m sales next year, the council’s interest rates could quadruple by “many, many, many millions of pounds” that it has “no budget for”.

Elsewhere in the meeting, the infamous 2018/19, which first identified some of the issues the council was facing, is still being examined by external auditors.

Due to the lack of accounting records, Mr Mair said the 18/19, 19/20, and 20/21 books will be “very challenging” to be signed off.

He said because some elements of the accounts are “impossible” to properly audit, the council should expect a “very adverse” audit report.