Solar farm U-turn blamed on Liz Truss government

Cotswold District Council was looking to borrow the funds for the project as part of their investment recovery strategy.

But leaders say increase in interest rates, inflation and the tightening of regulations around council investment means they need to ditch the plans.

Economy and transformation cabinet member Tony Dale told the council meeting on November 16 that he was disappointed to rescind the recovery investment strategy.

He said the events after the growth plan announcement by the former Chancellor Kwasi Kwarteng September 23 had made their business case for the project unfeasible.

“To say there remains a significant degree of economic and political uncertainty I still think is perhaps slightly under playing it,” he said.

“The Bank of England has raised its base rate from 1.25% to 3% and the Public Works Loan Board (PWLB), which relates to how we make our own borrowing, is worsening towards 4.5% up to 5%.

“You will understand that makes many of our business cases largely unfeasible.”

“[With] economic uncertainty, increased cost of short term and long term borrowing it is simply appropriate now to rescind this strategy.”

Conservative group leader Tony Berry congratulated the Liberal Democrat administration on “seeing the light at last”.

He admitted there was a spike with the fiscal statement which upset the market but he said the real key to the issue is inflation.

“The Bank of England is responding to that inflation in that it put the interest rates up which I recognise is a killer in terms of going further down the line on this,” he said.

“The PWLB were tightening up on how and what you should lend on the basis of seeing a lot of councils around the country going bust.

“If you look around Europe the inflation is much higher than it is in this country. I agree, not helped totally by that blip.”

The council voted to rescind the recovery investment strategy by 32 votes in favour to one against.