CASH-STRAPPED Inverclyde Council is having to pay out a total of £14.5 million a year on loan interest payments, it’s been revealed.

But this figure could be partly cut if the UK Government agrees to cancel interest on debt taken out before devolution in 1999.

The council has pre-1999 debt of £1,787,706 owed to Westminster’s public works loan board (PWLB).

It is being repaid at a rate of around 4.4 per cent.

Shadow Scottish Secretary, Ian Murray MP, has asked Chancellor George Osborne to agree to Scottish local authorities’ request for an amnesty on repaying interest on PWLB loans.

Council leader Stephen McCabe today welcomed Mr Murray’s support for the bid to have debt interest cancelled.

Mr McCabe said: “We have to pay about £14.5 million in loan charges servicing debt, some of which is for pre-1999 loans, so any write-off of that debt would be beneficial.

“It’s worth pursing to see if it can be written off or repaid at a lower interest rate. These payments will become increasingly difficult for councils in the years ahead.”

Fifty council jobs are being lost this year as a result of a £6m funding shortfall from Edinburgh.

Cllr McCabe says that by 2018 the Inverclyde budget will have been reduced by £46m in just 10 years.

The campaign to cancel the pre-1999 debts is also being supported by the union Unite.

MP Mr Murray says that the latest round of spending cuts will reduce council budgets by five per cent in real terms in this year alone and means that a debt amnesty is essential.

He said: “Unite estimates that Scottish local authorities have paid back £3 billion in interest on pre-devolution debt. Given the current financial parameters within which Scotland’s local authorities are being forced to operate, payments on this scale are both unfair and unsustainable.

“The PWLB is currently running a surplus of £2.8 billion, so is in a financial position to grant an amnesty on interest on debts incurred pre-devolution.

“The millions of pounds currently being paid by one arm of government to another could instead be invested in local services in Scotland, a much fairer and more productive avenue of expenditure.

“Agreeing to an amnesty would be morally just, fiscally responsible, and in the best interests of the people of Scotland.”