![\"Bootle](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/0_Bootle-Town-HallOriel-RoadBootleLiverpoolPic-Andrew-Teebay.jpg\")
Bootle Town Hall(Image: Andrew Teebay Liverpool Echo)<\/p>\nCouncils in the UK added \u00a37.8bn to their growing debt pile in the space of a yearBootle Town Hall(Image: Andrew Teebay Liverpool Echo)<\/p>\n
Councils across the Liverpool City Region have reported a \u00a3220m increase in debt over the last financial year. Those figures are part of a wider trend across councils in the UK, which shows that local authority debt has risen by \u00a37.8bn in the space of a year.<\/p>\n
According to analysis of data from the Ministry of Housing, Communities and Local Government (MHCLG), UK councils owe a combined \u00a3122.2bn to lenders, equivalent to \u00a31,791 per resident, as of April 2025. According to the BBC<\/a>\u2019s Shared Data Unit, this means UK councils have added \u00a37.8bn to their growing debt pile in the space of a year \u2013 up 7% from a total of \u00a3114.5bn one year ago.<\/p>\n Councils can borrow funds to invest in projects such as schools, leisure centres and theatres. Local authorities can also borrow to invest in property that will bring in an income over and above repayments on the debt.<\/p>\n However, the data shows the recent rise in debt is being partly driven by a near tripling of short-term lending from the central government. In some cases, these funds are being used to paper over holes in some council revenue budgets rather than pay for investments and town centre improvements.<\/p>\n Experts, including Jonathan Carr-West of the Local Government Information Unit (LGIU), said the spiralling levels of debt at local authorities were \u201cextremely worrying\u201d. He said: \u201cThat is not a sustainable system. As one local government finance officer said to me, it\u2019s essentially payday loans for local governments.<\/p>\n \u201cI don\u2019t think the government would say that\u2019s its long-term ambition. They would say that is what we have had to do to paper over the cracks while we introduce a new funding system for local government.\u201d<\/p>\n Last year, the BBC\u2019s Shared Data Unit reported on the spiralling debts seen at town halls across the country. It found borrowing had reached \u201cstaggering\u201d levels at some councils, according to chair of the Public Accounts Committee Dame Meg Hillier.<\/p>\n The money, borrowed largely from an arm of the Treasury, had been used to buy hundreds of commercial assets, from shopping centres to office parks, cinemas, energy companies and housing developments, all with the aim of returning a stream of income. Many council leaders said they had no choice but to invest in order to fill the gap in income they used to receive from the government under the revenue support grant.<\/p>\n Though that grant has increased in the years since the pandemic, core spending power for local authorities is around 18% down per person compared to 2010, the Institute for Fiscal Studies found.<\/p>\n In recent years, various commentators have warned that the debts held by councils \u2013 which must balance their budgets every year\u2014are unsustainable. In 2020, Dame Meg said the government was \u201cblind to the extreme risks\u201d of council borrowing levels.<\/p>\n The data shows an increase in debt amongst five of the six local authority areas of the Liverpool City Region, with St Helens<\/a> bucking that trend, with its debt actually decreasing by 0.01%. Liverpool council\u2019s debt increased by \u00a328.7m (3.33%), Knowsley<\/a>\u2019s increased by \u00a311m (9.79%) and Halton<\/a>\u2019s increased by \u00a325m (12.08%).<\/p>\n Second highest in the LCR is Wirral<\/a> Council, which reported a debt increase of \u00a374.22m (25.5%). However, the highest debt increase in the LCR was posted by Sefton<\/a> Council, which reported debts of \u00a381m \u2013 a 66.63% increase from the previous year.<\/p>\n That statistic breaks down to a reported debt per person spend of \u00a3717.78, up from \u00a3430.76 from the previous year. This places Sefton Council as having the seventh-highest debt increase in the UK and the highest in any local authority north of England.<\/p>\n A spokesperson for Sefton Council said: \u201cWhile the Council\u2019s overall debt has gone up in 2024\/25, it\u2019s important to note that the figure for the previous year was only provisional. The final audited figure shows that debt actually rose by \u00a366m, not \u00a381m.<\/p>\n \u201cThis increase comes down to three main factors. We\u2019ve invested around \u00a314m in local projects, we\u2019ve drawn on some of our reserves specifically to support investment in children\u2019s and adult social care, and, like many councils across the country, we\u2019re facing huge pressures on High Needs funding, which added around \u00a329m to our position.<\/p>\n \u201cEven with these challenges, Sefton still has the second lowest debt per person anywhere in the Liverpool City Region \u2013 and our debt per person is less than half the England average of \u00a31,688.<\/p>\n \u201cThat reflects our continued careful and responsible financial management.\u201d<\/p>\n Responding to a request for comment, a spokesperson for Wirral Council<\/a> referred the LDRs to its published draft Statement of Accounts and said \u2013 at the close of 2023\/24 \u2013 the council had total loans of \u00a3305m on the balance sheet. Adding that by the end of 2024\/25 this figure had risen to \u00a3374m, equating to an increase of \u00a369m over the financial year.<\/p>\n