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

Financial reform is crucial, but councils also need a funded transition

By Nina Philippidis | 01 October 2026

Councils need lasting SEND deficit funding and a credible path to reform, says Nina Philippidis.

FINANCE

Transferring power out of Whitehall: Don't devolve fiscal risk when 'rewiring'

By Mark Morrin | 01 October 2026

Mark Morrin says carefully designed fiscal devolution must combine meaningful local control with national equalisation, transitional protection and arrangeme...

FINANCE

Spending on B&Bs for homeless families soars

By By Neil Merrick | 01 October 2026

The cost to councils of placing homeless families in B&Bs has shot up by a quarter, with spending by London boroughs more than doubling, according to officia...

FINANCE

Missing link in council capacity

By Steve Wilson | 01 October 2026

Agency staff should be seen as more than a necessary evil, writes Steve Wilson.

Popular articles by William Eichler

-->