Northamptonshire repays £5m loan to neighbouring county council

Cash-strapped Northamptonshire County Council has repaid a £5m loan made by neighbouring Leicestershire County Council.

Leicestershire said it wanted to reassure residents that the money was returned this week in line with the agreed terms.

Cllr Byron Rhodes, Leicestershire’s Deputy council leader, said: “We take very seriously the security of our loans. Our track record is strong and unlike other councils, we did not have any money with Icelandic banks or other high-profile bank failures.

“Making the most of every pound we spend remains vital and lending money enables us to maximise our income.”

Leicestershire said it had ploughed the £35,000 earned in interest back into services. It added that local authorities across the country lent money to organisations in the public and private sector.