The level of debt at two councils has been revealed.
The BBC’s Shared Data Unit says Lincolnshire County Council has just over £460m worth of debt.
It relates to borrowing for long term financial projects, the authority’s Andrew Crookham, executive director for resources, told The Voice.
“Like all local authorities, the council will often borrow money to fund large-scale projects that benefit our communities, such as major new roads or improvements to schools and other facilities,” he said. “Without borrowing, it would be difficult to deliver such projects, which often bring long-term savings and promote economic growth.
“However, we have consciously avoided borrowing money for potentially risky commercial investments, which have caused difficulty for other authorities.
“There are strict guidelines that we have to follow when borrowing money, to ensure it’s affordable, and the repayments form part of our long-term financial planning.
“It’s thanks to our careful management and sensible borrowing that the council has managed to achieve the difficult balance of maintaining stable finances while continuing to invest in our communities, despite the challenging economic climate.”
South Holland District Council’s debt is listed as £67.5m but the authority said that figure was ‘incorrect’ and relates to its council housing stock and not the part of its accounts affecting its ‘General Fund’ where council tax is collected and spent.
The BBC acknowledges some councils’ debt levels are affected by the self financing laws brought in under the Localism Act in 2012 which allowed authorities to buy existing social housing stock out of the Housing Revenue Account (HRA) and keep the rent, but also take on the debt relating to the size of their stock.
Coun Paul Redgate, South Holland District Council’s portfolio holder for finance, said: “The £67,456,000 is debt from the HRA not the council’s general fund. By its very nature, the Housing Revenue Account is self-contained and does not impact the taxpayer.
“South Holland District Council does not have any debt in its general fund.”
In total the BBC says authorities in the UK owe £97.8bn to lenders. It also says that the councils have ‘seen government funding reduced by 40 per cent in real terms since 2010’ while being encouraged to make commercial investments.
A spokesman for the Department of Levelling Up, said: “Councils are ultimately responsible for their own finances, but we are very clear they should not put taxpayers’ money at risk by taking on excessive debt.”
