Although The City of Edinburgh Council having the fourth highest overall debt levels in the UK, the council says that it continues to work within the guidelines set down for councils and borrowing.
Edinburgh has also experienced the fifth largest increase in overall debt.
Borrowing by 382 councils in the UK has now reached £122 billion after a seven per cent rise last year which equates to £7.8 billion.The recent rise is due to short term lending which is on the increase across local authorities.
The Council is required under the Prudential Code to ensure that debt is sustainable, affordable, and prudent, and there is no suggestion that the council does not comply with these laws and their guidance.
The total debt in Edinburgh is explained in this table:
In Edinburgh the total debt per person is stated as £3,778.37 – whereas in East Lothian the debt per person is £4,918.25.
But Edinburgh with its borrowing of £1.977 billion is in fourth place behind Birmingham (£3,352,457,000) Leeds (£2,640,673,000) and Woking £2,155,641,000). And in terms of rising debt Edinburgh lies fifth behind Surrey, Newham, Manchester and Greenwich.
In Scotland the total borrowing at the end of Q4 in 24-25 was £19,160,509,000 which increased by 11% from the previous year.
Edinburgh Council reply
As to whether there is a strategy to reduce debt over the short or long-term, the BBC’s Shared Data Unit discovered that the Council has a capital strategy and investment plan as well as a loans fund policy which sets out the policy for the repayment of the Council’s debt. The council confirmed that: “Edinburgh Council continues to invest in its business plan priorities, such as tackling poverty, and part of the plan is capital investment to borrow to address systemic social issues and reduce the financial implications for the Council.”
The Council has a 10-year capital strategy for the council and its Housing Revenue Account (HRA). The General Fund’s Capital Budget Strategy is fully funded over the 10-year period.
A council spokesperson said: “The Council Business Plan 2023-27 sets out three priorities for the next phase of the city’s development and for the way the council will reform our services. We use this plan to guide our budget and investment decisions, ensuring that spending is focused on those activities with the biggest impact.
“Our three core priorities are to:
- Create good places to live and work
- End poverty in Edinburgh
- Become a net zero city by 2030.
“The capital plan, which is guided by the strategy, invests in key areas such as new schools and extensions, roads and infrastructure, cycle and active travel routes, culture and also ensures the council’s estate is maintained.
“In our 2025/26 budget setting, additional investment was agreed by the Council to invest in prevention and early intervention – such as in temporary accommodation to address homelessness issues in the city, our Additional Special Needs schools and Adult Social Care.”
Jonathan Carr-West is the Chief Executive of the Local Government Information Unit. He said: “So I don’t think there’s any huge surprises there. We’ve known for some time that a lot of councils across the country carry fairly high levels of debt and that a small number of councils carry very, very high levels of debt. That picture hasn’t changed much over over the past few years
“I think it’s worth, as always, reminding ourselves why councils are in that position, why they’re doing that. There were a series of decisions taken in the years after 2010 that meant the government grant to councils reduced very dramatically and councils were encouraged to use their own resources, their own ingenuity, to be part of the local economy and to raise money themselves.”
He added: ““It would be a mistake to sort of see this story as being about some councils that have gone rogue and gone off to borrow loads of money.
“This has been a fairly consistent thing across the sector. There’s only about, as your research makes clear, 30-something councils that don’t carry this sort of debt out of the sort of 400-odd councils across the country. So it’s a very consistent pattern
“For me, the key question we need to look at is not necessarily the council’s overall level of debt, but its ability to pay back that debt and how that compares to the level of revenue those assets are bringing in.”
Founding Editor of The Edinburgh Reporter.
Edinburgh-born multimedia journalist and iPhoneographer.
Like this:
Like Loading…
Related