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Torbay Council has agreed to borrow an extra £8m to help complete several building projects, despite criticism from the opposition Conservative group.

The ruling Liberal Democrat and Independent administration said extra cash was needed because the projects had been impacted by rising inflation, increased construction costs and economic instability.

At a meeting on Thursday, an increase to the council’s back-up capital fund – by £8m to a new total of £12m – was approved.

The projects include the 120-bedroom Harbour View hotel, delayed due to the collapse of previous contractor Midas.

Other projects in need of more funding are the Edginswell Business Park, where a new Wickes store is being prepared, followed by a new retail unit, and various upgrades at Lymington Road coach station in Torquay.

The increase to the back-up fund will mean an “ongoing annual revenue cost” of £600,000 per year to future council budgets, as reported by the Local Democracy Reporting Service.

Defending the rise, a council report said since this year’s budget was agreed, “the economic position has significantly worsened, in part from the impact of war in Ukraine, resulting in inflation rates and projected higher inflation rates not experienced for 40 years.”

However, opposition Conservative members criticised the move.

Conservative councillor Chris Lewis said if it was his money, he would speak to the group taking over the hotel to see if a deal could be made, adding: “This is an awful lot of money.”

He was later told by independent Darren Cowell, Torbay’s deputy leader and cabinet member for finance: “The nature of the contract that was signed before May 2019, when this administration assumed office, means that would lead to potential abortive costs.

“And if those abortive costs were to occur, there would be an immediate impact of multimillions of pounds onto our revenue account.”

Tory group leader, Councillor David Thomas, said his members could not support the proposal due it taking a further £600,000 out of the revenue budget for a number of years.

However, members of the cabinet defended their decision, while Liberal Democrat leader Steve Darling took issue at the criticism of money being taken out of the revenue budget.

He said: “I am absolutely appalled at the comments being made by colleagues opposite about the cuts. And it is because, of course, Torbay Council have faced hundreds of thousands of cuts thanks to a Conservative government.

“We are looking at a £96 million gap in our budget this year compared to what we used to get when Councillor Bye was the elected mayor in our funding from central government,” Mr Darling claimed.

Independent councillor Darren Cowell later said any delay to signing a contract with a contractor would "lead to further escalations in costs.”

A majority of councillors agreed to increasing the back-up capital fund by £8 million.