Birmingham City Council has highest debt in UK
A new report shows Birmingham City Council has the highest debt out of all UK local authorities.
Birmingham City Council has the highest overall debt out of all local authorities in the UK, according to a new report.
That's despite a 4% drop last year.
It's down to £3.35bn, whilst other councils added £7.8bn to their debt in the space of a year.
Councils can borrow funds to invest in projects such as schools, leisure centres and theatres - they can also borrow to invest in property that will bring in an income over and above repayments on the debt.
But the recent rise is being partly driven by a near tripling of short-term lending from central government, which in some cases is being used to paper over holes in some council revenue budgets rather than pay for investments and town centre improvements.
Experts including Jonathan Carr-West of the Local Government Information Unit (LGIU) said the spiralling levels of debt at local authorities was “extremely worrying”.
He said: “That is not a sustainable system. As one local government finance officer said to me, it's essentially payday loans for local governments.
“I don't think the government would say that’s it’s long-term ambition. They would say that is what we have had to do to paper over the cracks while we introduce a new funding system for local government.”
Birmingham City Council said its level of debt is incomparable to other regions because of its size. It is the largest local authority, with councillors saying it is more suitable to compare debt per head of population, for which Birmingham ranks 49th out of 382.