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Councillors have backed a plan to borrow £24 million to fix Caerphilly County Borough’s low recycling rates.

It will help fund a new waste depot in the “mid-valley” region, the location of which remains a secret while negotiations continue.

By next spring, Caerphilly County Borough Council must recycle 70% of the waste it collects or face multi-million pound fines.

The council recorded the worst recycling performance in Wales in 2023 and has launched a new waste strategy to drive improvements.

Cllr Chris Morgan, the cabinet member for waste, said the local authority’s plan requires £54m of infrastructure spending, including £6m on new collection lorries.

The Welsh Government has agreed to contribute more than half of that total sum, meaning the council will have to find around £24.8m to cover the remaining costs.

At a council meeting, on Tuesday October 1, Plaid Cymru councillor Greg Ead questioned why the council wasn’t proposing to use some of its reserves to “offset” borrowing the full sum of money.

“Surely we can find a few million?” he asked.

Steve Harris, the council’s head of finance, said the council didn’t have the necessary level of cash available in its reserves – the “vast majority” of which is “fully committed” to other projects.

A council report shows Caerphilly is currently at risk of around £2.7m in Welsh Government fines for missing national recycling targets – a punishment which has effectively been suspended because the council undertook a “root and branch review” of its waste services.

From next year, however, those potential fines are anticipated to drop to £1.3m annually, prompting Cllr Ead to ask why the council was seeking to borrow money with potentially higher interest repayments.

Mr Harris said the rate the council had secured is “competitive”.

Cllr Nigel Dix, an independent, remarked that councillors “don’t have any choice” but to comply with the government’s higher recycling targets and requirements for businesses to sort their recycling, which he called “costly” and “quite worrying”.

Several councillors asked for information on the new recycling facility site, which will cost the council £4.6m to buy.

Mark Williams, the council’s corporate director for environment and economy, said the location was confidential while the deal was being agreed, and would not say whether the “mid-valley” location referred to the Rhymney or Sirhowy valley.

But he told councillors the new site would serve as a depot and would not handle “smelly” waste.

“We’re not talking about food waste, we’re not talking about refuse,” he added.

A majority of councillors voted in favour of the borrowing plan, paving the way for the council to complete a deal for the site, fund further changes to its waste services and, it hopes, drive up recycling rates to the 70% target and beyond.