Swindon Borough Council owes nearly £200 million to external creditors.

And paying the interest costs taxpayers in the town £6.5m - 4.6 per cent of the council's annual budget of £140m.

A report to be made to the council's Conservative cabinet by deputy leader and member for finance Councillor Russell Holland includes figures on what the council has borrowed.

Among its total debt of £322m - including £128m of 'internal borrowing' - is 'external debt' on the General Fund - the council's current account - of £193 million.

Of that £30m is owed to banks, and £163 is borrowed from the Public Works Loan Board - which lends money at a lower rate of interest than banks.

The £6.5 m in interest repayments represents a rate of 3.37 per cent.

The Conservatives running the council say borrowing is a necessary part of providing services.

Councillor David Renard, leader of the council said: "“If we want to provide new schools, improve our road network, fix potholes and make investments to generate a return to the Council, we need to borrow money to fund it.

“Our debt is comparable with most similarly-sized local authorities and we only borrow to fund capital investment. We have a framework to ensure investment is prioritised to make the best use of our resources and that investments generate returns to cover the debt charges.

“By investing in Swindon we are building on the town’s already excellent reputation as a modern, vibrant place to live and do business. We will continue to invest in order to provide the very best services we can for local residents and to show continued confidence in Swindon’s economy.”

Figures supplied to the Adver by the council show Swindon's debt in comparison to other council's with similar size populations.

While it is larger than Southampton's it is broadly similar to Luton's and Islington in London and half that of Barnsley in Yorkshire.

Labour councillors contrasted the latest debt figures with the surplus the Conservative administration inherited when it took over in 2003.

Leader of the Labour group in the council chamber, Coun Jim Grant, said: "It is outrageous that after expounding the virtues of austerity for the last eight years in order to tackle debt, Tory-run Swindon Borough Council have run up a debt of nearly £200m.

"When the Conservatives took over from Labour they inherited a net treasury surplus of £6m and have since run up a debt of hundreds of millions.

"This means that 5 per cent of residents’ council-taxes goes toward the cost of the Tories’ debt. This money could be spent on road resurfacing, tidying our streets or improving our town centre.

He added: "I think Conservative Councillors need to make clear whether they're against the government’s austerity programme that has decimated public services or whether they’re for prudent borrowing to keep services to a reasonable standard.”