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

Government skipped own cost review of council mergers

By William Eichler | 29 August 2025

The Government did not conduct its own assessment of the costs of local government reorganisation, the BBC has revealed.

FINANCE

Fixing the Broken Promise: The North East and the SEND Crisis

By Nick Kemp | 28 August 2025

Nick Kemp says SEND services are in crisis, especially in the North East. He believes a regional compact can drive urgent reform through early support, share...

FINANCE

Getting fiscal devolution right

By Luke Raikes | 28 August 2025

Luke Raikes says local tax powers can help revive the places Whitehall abandoned, and he proposes three quick wins the Government could move forward with imm...

FINANCE

A new vision for leisure

By Ian Fytche | 28 August 2025

A shift to prevention creates a chance to reimagine leisure focused on active wellbeing, writes Ian Fytche.

Popular articles by William Eichler