Next Monday, all councillors will discuss the local authority’s budget for 2015/16 at the full council meeting.

There are actually three parts – the day-to-day expenditure, the revenue budget; the money for big schemes like schools, the capital budget; and the money spent on council housing called the housing revenue account.

We will be discussing how to spend over £135m on the revenue budget alone.

There is sometimes confusion over the capital budget. Capital budget money is used to pay for major schemes, and that means we have to borrow that money to fund them because we don’t have our own cash just sitting in a pot waiting to be used.

Where people approve of the spending, it’s called investment and if people disapprove, it’s called debt.

As with all successful major companies, we use borrowing to support our activities. In fact, having zero debt and high savings in a time of historically low interest rates is not a virtue.

The numbers involved might look quite big if you look at the borrowing – over £200m – but there is one simple principle to this: the council borrows money sensibly to build things that add value.

An example is having enough school places so that over 90 per cent of primary children get into one of their preferred schools.

What the council is doing is similar to a family wanting to improve its home with a new roof or extension. You work out the cost of borrowing versus the interest lost if you use savings instead.

You ask if the extension improves the value of your home, and at the end of that, you may make a decision to borrow.

The council follows a similar process. An additional question that the council must ask, which may not apply to a homeowner or business, is whether the borrowing is necessary because it is a legal requirement for the borough to undertake some work. The administration works out what is the most effective way to bring a benefit to Swindon.

It is worth noting that the council scrutinises these borrowing requirements as part of the annual budget setting meeting, and they usually pass without councillors offering amendments.

Let me take this opportunity to refute a couple of myths that some are spreading about the council’s past financial position.

In May 2003, this administration inherited an overspend of over £500,000.

Make no mistake – we were in the red. Although borrowing was low, the council had a backlog of over £65m worth of school repairs alone.

It might have looked nice on the balance sheet to claim there was a surplus, but I think pupils and teachers alike would have preferred classrooms that were not leaking every time it rained.