BCP Council debt rises by nearly eighty million in one year

BCP Council’s debt has risen by nearly eighty million pounds in a year, taking the total to £370,959,000 at the end of the last financial year.

Despite a decrease in borrowing, the council’s overall debt rose by twenty five percent and now works out at £918.10 per person, an increase of £188.44. Dorset Council also saw its debt increase, rising by thirty two percent to £292,546,000, equal to £760.24 per resident.

Across the country, local authorities now owe £122.2 billion, which is £7.8 billion more than last year. That figure is the equivalent of £1,791 for every resident, according to the Ministry of Housing, Communities and Local Government.

The increase has been driven largely by greater reliance on short-term lending from central government, often used to fill budget gaps rather than fund investment. BCP Council has recently reduced its short-term borrowing, down ten percent from £121,500 in April to £108,000 at the end of June this year.

Jonathan Carr-West, Chief Executive of the Local Government Information Unit, said the rising debt levels were “extremely worrying” and highlighted the wider challenge of funding pressures from statutory services such as adult social care, children’s services and housing.

The Labour government, elected last year, has begun introducing multi-year financial settlements and is reviewing the funding formula to take account of service costs and councils’ ability to raise council tax.

Christchurch MP Christopher Chope said: “As far as I can tell the council is living beyond its means and needs to start living within its means,” warning that reforms could also create issues of fairness.

Bournemouth West MP Jessica Toole said years of austerity had left councils under strain and added that “it is unsurprising to see local authorities across the country dealing with debt, but of course it is worrying to see this rising here in BCP.” She pointed to extra funding already provided by government to support services such as homelessness, buses, pothole repairs, breakfast clubs in schools and higher parking fines.

In June, Councillor Millie Earl said the council was facing a crisis in SEND services, with a large deficit built up over many years. She said: “We need a sustainable solution, and government needs to step in and provide councils with what they need to deliver this very important service to children and their families.”