Title

FINANCE

Council debt up by £52bn since 2010

Local government debt has increased by 78% since 2010 as councils attempted to make up for cuts to Government funding, research has revealed.

Local government debt has increased by 78% since 2010 as councils attempted to make up for cuts to Government funding, research has revealed.

Analysis by the National Institute of Economic and Social Research (NIESR) found the debt held by councils across the country increased by £52bn to £119bn between 2010 and 2023.

During this period, local authorities took advantage of relaxed borrowing restrictions and low interest rates to finance property investments as they tried to compensate for a 60% reduction in Government funding.

However, the subsequent increase in interest rates has meant that local authorities are now spending increasing amounts servicing debts.

According to the NIESR's findings, on average, council spending on debt servicing has risen to 15%, totalling £3.2bn a year, while councils' average net worth has fallen by a record £80bn since rates began to rise.

The NIESR warned: ‘With a growing number of local authorities declaring bankruptcy since rates began to increase, an evaluation of local government finances is needed to understand whether these were exceptional cases, or the start of a worrying trend of insolvency in one of the most important providers of public services; the analysis provided in this briefing note suggests more evidence for the latter than the former.'

FINANCE

Shropshire declares 'financial emergency'

By Dan Peters | 11 September 2025

Shropshire Council has declared a ‘financial emergency’ as it seeks to avoid effective bankruptcy.

FINANCE

Warmer Homes London: A blueprint for greener, healthier, and fairer communities

By Brenda Dacres | 10 September 2025

Mete Coban and Brenda Dacres explain how Warmer Homes London is uniting boroughs, housing providers, and partners to scale up home retrofit across the capita...

FINANCE

Future Forum Midlands: Councils should consider rethinking finance rules to solve problems

By Paul Marinko | 10 September 2025

A public finance expert has suggested local government should consider rethinking the rules to solve some of the problems ‘coming down the road' for the sector.

FINANCE

Fair Funding Review 2.0 and the road to reorganisation

By Tracy Bingham | 10 September 2025

Councils will have to grapple with risks, resilience and reform as they balance the fallout from fair funding with the challenge of reorganisation, writes Tr...

Popular articles by William Eichler