OXFORDSHIRE County Council is among the country's biggest lenders to other local authorities.

According to an investigation by the Bureau of Investigative Journalism, the council is among the 'top 20 lenders' in the country.

As of the start of this financial year it had lent out £212 million worth of outstanding loans waiting to be repaid.

The highest borrower from Oxfordshire was Lancashire County Council, which through a series of loans owes £25,000,000.

Other high lenders included the Greater London Authority (£335,409,975) and the London borough of Wandsworth (£288,500,000).

Councils have to follow strict rules about where they can borrow money from, but common sources are either a body called the Public Works Loan Board, or lending from other authorities.

ALSO READ: Magistrates Court shut down Didcot house after crimes

An Oxfordshire County Council spokesman said that lending to other authorities was a way for the council to prevent all of its money from risk by sitting in a single bank account, and allowed it to make a small sum by the interest on the loans.

The spokesman said: "The council deposits money from cashflow and reserves in a variety of institutions, including banks, money market funds and other local authorities. It is prudent for any temporary surplus cash to be diversified across a number of high credit quality institutions."

They added: "Other local authorities are deemed to be one of the highest credit quality institutions to deposit money with."

Some of the loans were short term, while others were agreed over a longer period, and the interest rates varied between 0.65 per cent and 1.50 per cent.

Higher interest rates help the council's publicly funded savings from being depleted by inflation rates.

The spokesman added that the money was not lent out in place of spending, as it was from its reserves and cashflow.

ALSO READ: Paved, tree-lined streets planned for Oxford University Science Area

The council is advised in where to invest its money by treasury advisor Arlingclose.

Two of Oxfordshire's district councils, South Oxfordshire and Vale of White Horse, were also found to have lent money to other authorities in the investigation.

Collectively, they had £17,300,000 of loans to other councils on the books as of the start of the financial year.

A spokeswoman for South and Vale, which share their staff, also explained that the councils had a duty to protect their cash reserves through investments.

Some in Oxfordshire who followed the investigation have questioned why the money could not be spent by reinvesting in local services.

Hazel Dawe of the Oxfordshire Green Party said it was 'questionable' why some of the reserves could not have been used to prevent cuts to council budgets in the last 10 years.