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

Mayors to share income tax by 2028

By Martin Ford | 30 July 2026

Every mayor will be offered a share of income tax and business rates retention, the Government has announced.

FINANCE

Sorting the finances of social care

By Owen Mapley | 30 July 2026

In light of the Prime Minister’s announcement on social care Owen Mapley says it will take public support and a sustainable financial footing if it is going ...

FINANCE

Council to save interest after securing loan

By Dan Peters | 30 July 2026

The National Wealth Fund has granted West Suffolk Council a £9m loan to help deliver a state-of-the-art advanced manufacturing and engineering centre for sta...

FINANCE

A mayor's journey shows why councils are essential partners in government

By Shabnum Mustapha | 30 July 2026

Shabnum Mustapha says Burnham’s mayoral experience highlights councils’ vital role in delivering national priorities.

Popular articles by William Eichler