Borrowing by Conwy Council rose by £7.7 million last year, new figures reveal.

​The Local Government Association says unprecedented ​funding pressures on councils have forced many to borrow in order to protect vital services.

Conwy Council’s outstanding loans stood at £177 million at the end of December, Ministry of Housing, Communities and Local Government figures show.

This was a 5% increase from the same point a year earlier, when it stood at £169.4 million.

Long-term loans accounted for £113.5 million of the borrowing. These last for more than one year and are used to finance large projects or purchases.

The council also took out £63.5 million worth of shorter-term loans, which are normally used to help manage a council's cash flow.

Outstanding council borrowing across Wales stood at £5.7 billion at the end of December – a 4% rise from a year earlier.

Richard Watts, chairman of the LGA’s resources board, said a near £15 billion loss in central government funding over the last decade had stretched councils to the limit.

“Councils have faced a choice of either accepting funding reductions and cutting services – such as care for older and disabled people, protecting children, reducing homelessness, fixing roads and collecting bins – or making investments to try and protect them,” he added.

Mr Watts said councils follow strict rules to ensure they invest wisely, adding that some investments benefit the local economy.

The Public Works Loan Board was the main source of long-term borrowing for Conwy Council as of December.

The Westminster-run loan board, which offers low-interest loans to councils without requiring them to prove they can afford the repayments, accounted for three-quarters of long-term borrowing by UK councils at the end of December.

In October, the Treasury hiked interest rates on loans from the PWLB, making it more expensive to borrow.

Mr Watts said the rise would make it harder for councils to deliver on key government priorities such as housing and regeneration.

A recent report by the National Audit Office estimated English councils spent £6.6 billion on buying commercial property from 2016-17 to 2018-19.

It said some councils did this with the aim of making profits, but were taking on significantly more debt.

Don Peebles, head of policy and technical at the Chartered Institute of Public Finance and Accountancy, said the potential revenue was appealing for cash-strapped councils.

He added: “Real risks accompany commercial investments, which if used, should be one part of a comprehensive and diverse approach to managing public money.”

A Welsh Government spokesman said councils were taking advantage of recent low borrowing rates to invest in affordable housing, schools and other key infrastructure.

He added: “Doing so is good financial management, as long as the annual costs of a loan are affordable.

“The amount of borrowing is determined by a professional assessment of what is affordable, prudent and sustainable by each individual authority.”