Mon, 25 Aug 2025

Mon, 25 Aug 2025 Schools, care homes and sports clubs sold off to pay spiralling council debt

Hundreds of council-owned buildings being sold as local authorities seek to reduce debts of £122bn.
1. Rising Debt Levels: Many local councils across the country have accumulated significant debts, with some councils having debts exceeding their annual budgets. 2. Causes of Debt: The article suggests that low interest rates and short-term private bank loans taken out by councils during the pandemic have contributed to the rising debt levels. 3. Impact on Services: Councils are struggling to balance their books, which may lead to cuts in services or increases in council tax. 4. Government Funding: The government has provided additional funding for local authorities, but some argue that this is not sufficient to address the underlying issues of underfunding and inefficient funding formulas. 5. Debt Write-Offs: There are calls from some councils for a debt write-off or relief from the Public Works Loan Board (PWLB), which is owed about 75% of the council debt. 6. Government Response: The Ministry of Housing, Communities and Local Government has announced additional grant funding for local services, but some argue that this is not enough to address the scale of the problem. Some specific examples mentioned in the article include:
* Croydon Council's £1.6 billion debt
* Warrington Council's £1.6 billion debt
* South Tyneside's council having the highest debt levels among the seven councils in the North East The article also mentions some potential solutions, such as:
* Simplifying the funding formula used to distribute funds to local authorities
* Restructuring two-tier council areas into unitary authorities
* Redistributing grants to focus on the most deprived areas.
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