WYCOMBE District Council intends to pay off the £21 million it owes so it can spend another £5 million a year on affordable homes and other projects.

For the past few years the council has not had much capital available, especially as it has had to set aside almost £22 million to help finance the Western Sector project.

Going debt-free would release the council from a large number of government controls on how it can spend its own money. Essentially it means the council can spend every penny of the £8 million a year it gets from selling about 150 council homes, instead of being forced to keep £5 million in the bank.

The decision, which has to be ratified by the full council, was one of the first to be taken on Monday, at the first meeting of the council's cabinet.

The presentation was delivered by Audrey Jones, who holds the resources portfolio, one of the first times the explanation of a technical subject has been given by a member, rather than an officer.

The council owes £21 million in 30 separate loans, ranging from £324 to £3 million at interest rates from three per cent to 14 per cent.

The council also has investments of £80 million, £34 million of which is money from the sale of council houses.

There will be a £4.75 million extra cost in paying off the debts. But because interest rates were low at present, said Cllr Jones, this figure should be taken advantage of.

The council will also make £300,000 a year by going debt-free because it will get more money from the savings in interest payments, than it will lose in interest on money invested.

It will also not lose so much in government subsidy. Subsidy cuts of £500,000 a year could go up to £1.7 million by 2010 if the council does not go debt-free.

Cllr Jones said: "There are so many government controls, and the only way to get out of them is to do this transaction.

"There are lots of things to spend money on, but we are in a poor state regarding the capital programme if we leave things as they are."

She said the council needed to draw up plans over five to ten years and would keep money in the bank for emergencies.