Local Council borrowing in the UK amounts to almost £100 billion. That's equivalent to just under £1500 per resident, although there is considerable regional variation. Woking Council alone has managed to rack up a debt of £2 billion, or around £19K per resident in the Woking Council Area.
Woking is just the latest in a string of recent councils to issue a Bankruptcy Notice, I mean fair play, £2 000 000 000 or £19K per head is probably about as far as you can push it.
But I think the above macro trends demonstrate that it's not exactly the fault of these councils for going bankrupt... the overall trend is one of underfunding, those that keep out of debt are the exceptionally well managed and probably those lucky enough to have lower costs, the NORM is debt, and at the the poorer ends of society where income will be lower and expenditure higher for councils, bankruptcy is something that can be delayed but in the end it's inevitable...
Councils now spend £500 million a year paying for this debt, in interest and repayments, which is twice as much as they spend on the fire services overall.
In some regions councils are spending more on servicing debt than they do on adult social care, the second largest expenditure item after education.
But why are things so dire...?
It's simple... national governments have cut grants to local councils, who have failed to raise sufficient funds locally to meet their costs.
Meanwhile expenditure has remained at the same level for the last five years.... councils are mandated to provided education, adult social care, and a whole range of other services, and costs will vary from council to council, in some it will be housing, in others adult social care.
The point is, costs are high, but income lower.... You can see this in the stats from the Local Authority Spending Reports, a cracking read, BTW.
Spending
You can see from below that after education Adult Social Care is creeping up which is the main contributor to expenditure.
And spending on most things has increased.
Income
Meanwhile if we look at income, we see government central grants have been cut, but not made up for by local revenue increases, AKA mainly Council Tax.
And no surprise why local councils are reluctant to increase that!
Ideology not working...?
I can just imagine the Tory dialogue in central government about inefficiencies at the level of local government, hence the logic for cutting grants.
The problem is this is in the broader context of increasing costs, especially in the realms of adult social care.
And hence we have debt... and because so many local councils are in so much debt I can't imagine it's the fault of individual councils, when there's a trend, it's probably the systemic underfunding relative to costs that is the problem!
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