A DEBT-RIDDEN council won’t be borrowing this year despite increased costs to replace Grenfell-like cladding at two apartment blocks.

Finance chiefs from Slough Borough Council (SBC) have said there will be no external loans to fund its down-scaled five-year capital programme, which has a budget to the tune of nearly £104m.

All local authorities have a capital programme that funds one-off projects, such as road repairs, new infrastructure, or public realm improvements, and are usually funded via borrowing, developer contributions (S106), and government grants.

But councillors sitting on the overview and scrutiny panel heard that SBC the grants from government and other bodies, S106 monies, and funds from asset sales will “eliminate” the need for external borrowing to fund the five-year programme.

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Some of the projects include implementing a £10.1m A4 cycle ‘superhighway’ and £10.1m improvement works on the Farnham Road (A355) corridor.

SBC, which effectively declared bankruptcy in 2021, needs to sell up to £600m of its assets to reduce its £760m borrowing debt.

A finance officer said the council’s previous capital programmes were “ambitious” as they took on several major projects in any one year and were heavily dependent on external borrowing.

SBC down-sized its previous programme, which envisaged a £219m spend with a borrowing requirement of £17.5m, to eliminate the need for further borrowing.

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Speaking at the meeting on Thursday, February 2, Conservative leader Dexter Smith (Colnbrook with Poyle) was concerned about how SBC will fund de-cladding Nova House and Cornwall House as costs have increased by about £1m for each.

The former office buildings were converted into flats, and both were found to have dangerous flammable cladding in the wake of the Grenfell Tower tragedy.

Slough Observer: Nova HouseNova House (Image: Google Maps)

In the case of Nova House, the council loaned £10m to GRE5, which owns the freehold and was bought by SBC for £1, and received an additional £9m loan from the government to undertake the remedial works.

Due to further ‘significant deficiencies’ found in the fire safety of the building; an additional one million pounds is needed.

Cllr Smith said: “The programme [Nova House] was meant to have finished by now, February 2023. It’s probably going to go on for another year.

“So, where is that extra £1m of capital coming from?”

Finance officers told Cllr Smith that the extra £1m for Nova House will be funded by a Homes England grant and the increased cost for Cornwall House will be funded via capital receipts.