I have a 18 week border collie puppy. When we first got her I trained her to paper, then to go outside, this was fine, but last week she started to urinate in her crate, not when she has been put in there to sleep, but goes in deliberately to use it as a toilet.

I do not use the crate to keep her in when I am out at work, as she would be left in it for 4-5 hours at a time, and I thought this was too long, and I don't shut her in it over night, is this where I am going wrong? If I shut her in it all night and when I'm out might it prevent her from using it as a toilet?
I don't scold her for urinating in it, unless I catch her doing it, in which case, I say "bad dog" take her outside and tell her "go out." I also remove the blanket as soon as I see that it is wet, and clean the base of the crate with ammonia free cleaner.

Also, would it be cruel of me to leave her in there with no blanket, just the plastic liner? I have no blankets left today, they are all being washed!

She's leaving and using the crate as her toilet? If that's the case, close the crate door?

If she is pottying in her crate when she is put in it, I would assume she is suffering from separation anxiety.

She is also very young. I wouldn't depend on her being house trained until at least, and at the very minimum, 6 months.

Its personal preference if you want her housed with or without blankets. Personally, I wouldn't want a soaking wet puppy jumping on me because she peed in her crate. Plus.. how big is the crate? It should be big enough for her to turn around in, especially for a puppy. Anything that is bigger is asking for puppy to piddle in it.

Paper training can be one of the most confusing techniques for house breaking. She was allowed to pee on one soft surface, why not all of them? She thinks the kennel is where you want her to pee. You just need to redirect her habit. Start back from the basics. Every time she eats, drinks or plays take her out side to potty. When she does her business you praise like mad, even offering a small treat after she is done.

As for crating. Crate training can be one of the most useful tools in house breaking. It's okay to leave the blanket out, I had to with a few of my rescues and foster dogs. I use my crate for when I am gone from the house. I work an 8 hour day and she is kenneled all day. To some this might sound cruel, but it's better than the possible destruction I would come home to. A crate mimics the den. It's a safe happy place for her to be, where you don't have to worry about her messing in the home or getting bored and chewing things she should be staying away from. Remember to never use the crate as punishment, this always needs to be her safe place.

She is still a pup, so she will have accidents, the key is to be persistent and consistent. If you feel that kenneling her for 5 hours (perfectly acceptable IMHO) is too long, then are you able to barricade her off in one area? If you leave papers down, she will use them, and she will continue to use the bathroom on anything laying around the house, dirty clothes, towels, mats etc... Unless you show her her place to potty is outside.