Warrington Council has third highest average debt per person in UK

BBC Shared Data Unit analysis of data by the Department for Levelling Up shows UK councils owe a combined £97.8 billion to lenders, equivalent to £1,455 per resident, as of September 2023.

Taking into account all types of local authorities, such as police and crime commissioners and combined authorities, the debt pile rises to £122 billion.

But council leaders say years of under-funding mean they have been forced to take out loans and invest in commercial properties just to keep services running.

The data shows that Labour-run Warrington Borough Council’s amassed debt for 2023-24, at quarter two, totalled £1,739,678,000.

It states the town has a population of 211,227 – and the average debt per person in the town totals £8,236.

According to the data, Woking had the largest average debt per resident in the UK, £18,756, followed by Spelthorne, £10,415, Warrington, £8,236, and Thurrock, £8,049.

Warrington South Conservative MP Andy Carter says ‘the strategy that Warrington has employed has gone beyond what I think is reasonable’, and that he thinks there is ‘nothing wrong’ with small levels of borrowing to fund public infrastructure in the community that the council serves.

“That's what the Public Works Loan Board (PWLB) is there for - to invest in leisure centres, to provide funding for essential facilities,” he said.

“Where I think Warrington Council have got it wrong is they borrowed 1.8 billion pounds and invested into projects that have high levels of risk. 

“And we've seen that by the fact that a number of the projects invested in have returned nothing, or have even gone into administration. They invested into an energy company which went into bankruptcy and has lost the council a significant amount of money. 

“There is a good use of borrowing to invest in facilities locally, the problem that I see in Warrington is that the leisure centre in South Warrington is the same leisure centre that was there 40 years ago, and has seen no investment yet. Borrowing has gone on to invest in a business park in Warrington that was bought offshore to avoid tax.

“Now, when we talk about losing the council a significant amount of money - it's taxpayers’ money, and that's what's different between investment in the private sector where shareholders, directors are investing for shareholders. But here in Warrington it's councillors with little or no expertise investing public money. And if that goes wrong, it's the public that will ultimately pay the price. And that's really what's concerning me.”

But Warrington Borough Council leader, Cllr Hans Mundry, says over the past 14 years, towns and cities across the country have been suffering ‘at the hands of brutal Conservative austerity and cuts to public services’.

 “Warrington Borough Council’s investments generate a net return of around £23m a year after all the costs of borrowing have been deducted. The £23m in profit assists us in paying for services we all rely on,” he added.

 “The majority of our investments are secured and were borrowed when interest rates were low, meaning they are locked in at low rates for the long term.

 “In 2010, Warrington Borough Council received £70m in revenue support grant funding from the Government. This year we received £1.6m, a reduction of more than £68m - a 97% drop. The Conservatives have taken £68m in funding away from hardworking families here in Warrington.

 “Local authorities such as ours were encouraged by the Conservative Government to be more commercial and to make investments to generate alternative sources of revenue to pay for vital services.

“The council has invested in things like solar farms to power council buildings, loans to social housing providers to build affordable homes right here in Warrington and the regeneration of our town centre.

“The sound management of council finances is of utmost importance, and our plans and actions will ensure our budget remains as stable as possible into the future.

“Warrington Borough Council can balance its budget despite Conservative austerity, because of our investment portfolio. The surplus profit of around £23m goes directly into supporting Warrington’s most vulnerable residents, with more than 80% of every pound we spend going into things like protecting vulnerable children and adult social care.

“The Labour administration took the decision to invest in Warrington. We have invested in our local economy, and we have invested in our residents. Our investments mean we can offset some of the Conservative cuts forced on our town.

 “It’s on the Conservatives’ watch that our country’s national debt has risen to more than £2,636,900,000,000 - that’s £2.6 trillion - almost £40,000 for every man, woman, and child in the UK.

 “And it’s on the Conservatives’ watch that public services we all rely on have been decimated, with NHS waiting lists at record highs and asylum backlogs soaring.

“Local Conservatives should be calling on the Government to provide the funding needed to support the services we all rely on, and ask their Chancellor to provide a full and fair funding settlement for all councils.”

Warrington Borough Council says it believes its level of borrowing is ‘sustainable’ as it is asset-backed, and its current PWLB portfolio has an average term of 23 years, which ‘reduces the risk of exposure to interest hikes’.

A spokesman said: “In short, we have made strategic, prudent, risk-based and long-term decisions.

“Due to the fact that we borrowed long-term to take advantage of previous historic low interest rates, we are sitting on around £300million of PWLB premiums and a very strong council balance sheet.”