A £15M loan to regenerate a Carlisle housing estate which cost the city council more than double that in interest payments has now been refinanced.

At a virtual meeting of Carlisle City Council’s executive on Monday, deputy leader Gareth Ellis said the loan to improve the Raffles estate had cost the council about £32m in interest since it was taken out in 1995, when the authority was under Labour control.

Mr Ellis, who is the council’s Conservative portfolio holder for finance, governance and resources, confirmed that loan had been cleared, with another loan taken out for the same sum which would not hamper the authority with the same costs.

He added: “We’ve reissued a loan for this sum but what will happen in future is this amount will actually be paid off.

“What happened in 1995 was the sum was borrowed without any means to pay it off, so here we are now a generation later having to refinance this loan.

“This time we won’t hand that burden onto our children and grandchildren; when this loan is finished, it will be paid off, unlike our predecessors’.”

Conservative leader of the council John Mallinson said the refinancing would alleviate what had been a “tremendous burden” for 25 years.

Labour has previously said the loan represented a “good deal” at the time with an 8.75 per cent interest rate and had cross-party support.

Les Tickner, of the council’s Labour group, said they had planned to refinance the loan if they had been running the authority.

“That was always our intention when the time was right,” he said.

Mr Ellis also revealed at the meeting that the council had seen a net underspend of £69,000 against its £14m general fund revenue budget in the 2019/20 financial year, with a £10,000 net underspend in its capital budget after committed expenditure of £2.5m was taken into account.

Councillors’ allowances had seen an underspend of £12,500, Mr Ellis said, while mileage expenses had been just over half of what would be normally expected.

A portion of the money saved from the allowances is set to be shared with councils across the area to increase the small-scale funds available for projects in their wards, as agreed in February.