Council debt ‘more than one-and-a-half times latest annual funding settlement’

Scotland’s total council debt has increased to more than one-and-a-half times the total allocated to local authorities in 2024-25, analysis by the Scottish Conservatives suggests.

Annual figures released by the Scottish Government showed the cumulative debt for Scotland’s 32 local authorities was £21.8 billion on March 31, 2023.

This was a 6.1% increase, or £1.25 billion higher, on the previous year, and total debt increased 19.6%, or £3.6 billion, over a five-year period.

Scottish Tory analysis of the figures showed the debt was 156.8% of the £13.9 billion allocated to councils in the 2024-25 budget.

And when the additional funding councils received – £62.7 million of Barnett consequentials and £147 million for the council tax freeze – is included the debt is still 154.6% of the £14.1 billion allocated in 2024-25 in total.

Scottish Tory finance spokeswoman Liz Smith said the “eye-watering” figures were likely to be exacerbated by the council tax freeze for the year ahead.

She said: “This colossal debt is the direct consequence of years of SNP neglect and underfunding, and essential services are under enormous pressure as a result.

“It’s truly eye-watering and unsustainable that debt levels are more than one-and-a-half times the latest annual funding settlement provided by the SNP Government to our local authorities.

“Councils have been increasingly reliant on borrowing in an attempt to plug the gaps created by SNP cuts – so it’s little wonder a quarter of them fear bankruptcy.

“The debt mountain is almost certain to grow in light of Shona Robison’s savage tax-and-axe budget, which forced local authorities to impose a council tax freeze without providing them with the resources to fully fund it.

“It’s only a matter of time before a Scottish council goes bust unless the SNP Government finally agree to a fair funding deal.”

A Scottish Government spokesman said: “Local authorities are required by law to ensure borrowing is affordable, prudent and sustainable.

“The debt statistics for local authorities also include the costs of private finance initiatives and public private partnership contracts.

“Ministers are aware that many councils are under financial pressure, which is why the 2024-25 Scottish Budget provides record funding for local government of over £14 billion.”