How far in the red is YOUR council? The town halls with up to £3.4BILLION of debt – as they plot to hike taxes for struggling residents_Nhy
UK councils are wilting under a mountain of debt, with the 20 most indebted councils owing more than £30billion.
Official figures show that UK local authorities had a total debt pile of more than £140billion last year.
It comes as more than four million people face punishing council tax rises above the maximum normally allowed by law.
Householders in one area could see their bills hiked by 25 per cent – the largest increase in England for two decades.
Seven other struggling councils around the country have proposed huge rises of between 9.99 and 15 per cent from April as they look to exploit a legal loophole, piling pressure on already under strain domestic finances.
Birmingham, which is one of the those councils, has the most outstanding borrowing, according to numbers released by the Ministry of Housing, Communities and Local Government (MHCLG).
The Labour-run authority, which effectively declared itself bankrupt in 2023, has a debt pile of £3.4billion, though the figures do not include liabilities that could increase them, like pension deficits or PFI contracts.
The second largest borrower is Leeds, another large Labour authority, with £2.5billion.
But third on the list is Woking, a small borough in Surrey which owes £2.1billion after a disastrous period of property speculation under its previous Conservative administration.
Find out how much outstanding debt your local councils have using the interactive table below.
Local authorities are permitted to raise council tax by up to 4.99 per cent under Government rules.
Any larger increase than this would normally have to be approved by a referendum of local taxpayers – something that has never happened because councillors know how unpopular the move would be.
But councils can exploit a loophole with the threat of issuing a so-called Section 114 notice, effectively declaring themselves bankrupt and allowing them to go for higher rises, which would be signed off by Angela Rayner in her role as Secretary of State for Housing, Communities and Local Government.
Some 4.4million residents in eight local authorities are set suffer this fate, a Mail audit has uncovered, sparking new questions over the mismanagement of public money.
The 154,000 residents of the Royal Borough of Windsor and Maidenhead in Berkshire, which includes the Royal family on the Windsor estate, are facing the biggest council tax rise in the country – five times the usual maximum, adding £451 to the average cost.
The second largest borrower is Leeds, another large Labour authority, with £2.5billion.
The Lib Dem-run local authority is looking to force through a 25 per cent increase, which would be the largest for two decades in England if ultimately approved by ministers.
Labour’s flagship local authority Birmingham is considering raising council tax by 9.99 per cent for a second consecutive year as it tries to recover from disastrous handling of its finances in the past. If the rise goes ahead then Band D Council Tax payers in England’s second city will see their bills rise by a combined £400 over the two-year period.
Labour-run Bradford council, which was bailed out by the government to the tune of £220million last year and is currently the UK City of Culture, has also asked for permission to increase tax by up to 15 per cent from April for its 560,000 residents, putting around £170 on the average bill.
In December, Lib Dem-lead North Somerset Council also proposed a 15 per cent rise in council tax, putting it by an average of £256 a year, as well as asking its 215,000 residents if they would donate £1,000 to help fill the authority’s multi-million funding gap.
And Tory-run Hampshire County Council, which faces a £182million deficit and has 1.4million residents, has asked ministers for permission to hike council tax by 15 per cent in 2025/26, adding £230 to the bill of a Band D property.
The Government wants to abolish two-tier council areas in order to devolve more power from Westminster. With 21 county councils and 10 unitary authorities due to hold elections this May, some have sought to delay them to allow time to develop proposals on reorganisation.
The Ministry of Housing, Communities and Local Government said it has received requests from 16 counties and two unitary authorities that involve ‘postponing their election from 2025 to 2026’.
They are: Derbyshire, Devon, East Sussex, West Sussex, Essex, Gloucestershire, Hampshire, Isle of Wight, Kent, Leicestershire, Lincolnshire, Norfolk, Oxfordshire, Suffolk, Surrey, Thurrock, Warwickshire, and Worcestershire.
