BBC Shared Data Unit Survey reveals the level of debt at West Suffolk Council, Ipswich Borough Council, Babergh, Mid Suffolk and East Suffolk Councils
New research has revealed the amount of money councils across Suffolk owe, with one district council amassing a total debt of more than £200m.
The figures have been highlighted in a BBC Shared Data Unit Survey, with the chair of the public accounts committee Dame Meg Hillier describing the borrowing levels at some councils as ‘staggering’.
Dame Hillier said she was concerned a legacy of debt would continue to squeeze the amount councils have to spend on key services for years to come.
In recent years, six councils across the UK have had to issue section 114 notices, declaring themselves bankrupt.
But is there any real threat of this happening in Suffolk?
With the help of the BBC Shared Data Unit Survey we have broken down the amount of debt owed by our county’s district councils and asked if they are concerned – here are the responses:
Ipswich Borough Council
Covering a population of 139,614, Ipswich Borough Council had a total debt of £200,334,000 by quarter two of the 2023/2024 financial year.
This equates to a debt of £1,435 per person in the borough.
Cllr Neil MacDonald, Ipswich Borough Council leader, said it was a challenging time for councils across the UK and the authority had worked hard to set a balanced budget.
He said council papers published on January 29 and considered by the executive on February 6 will detail the council budgets, which are balanced.
A spokeswoman for Ipswich Borough Council said: “At 31 March, 2023 the council had £203m of debt on its balance sheet.
“This is the cumulative total amount of loans outstanding at that date. It includes the outstanding debt on the council’s 7,000 council homes and general fund investment programmes.
“These loans were raised in past years dating back to 1948 and are repaid over an agreed number of years.
“Over the period 2023/24, there will be a net repayment of £4m debt , and the forecast debt at 31 March, 2024 is expected to be £199m.”
West Suffolk Council
West Suffolk Council, which covers Bury St Edmunds, Haverhill and Newmarket, covers a total population of 180,820.
It had a total debt of £9,625,000 by quarter two of the 2023/2024 financial year.
This figure is equal to a debt of £53 per person.
Cllr Diane Hind, cabinet member for resources, said: “We are prudent in both our borrowing and our reasons for it. Our debt levels are low compared to many other councils and are being managed in a careful and responsible manner.”
She continued: “In terms of why we borrow, it is worth reiterating that less than a fifth of the costs it takes for West Suffolk Council to deliver our services to our communities are met through council tax.
“So, there are times when we need to raise funds to further invest in our communities to deliver economic or social benefits and in some cases to also deliver new income streams to further sustain and improve those services we deliver. And there are times when prudent and responsible borrowing is absolutely the right way to achieve those goals.”
Mid Suffolk and Babergh District Councils
Mid Suffolk District Council, which covers a population of 103,417, had a total debt of £90,668,000 by quarter two – equivalent to a debt of £877 per person.
Babergh District Council covers a population of 92,723 and amassed a debt of 93,562,000. This equates to a debt of £1,009 for each member of the population.
A spokeswoman for Mid Suffolk District Council said the authority’s current draft budget for 2024/25 showed a forecast budget surplus of £1.213m for the general fund based on a two per cent increase to Band D Council Tax.
Discussing Mid Suffolk’s draft budget, Cllr Rachel Eburne, deputy leader and cabinet member for finance and resources, said: “This is a prudent budget to help safeguard finances for the challenges we face, so we can continue to deliver our core services well, support our residents and communities.
“But we remain ambitious. We want to see Mid Suffolk thriving. Not just economically – though that’s important - but also culturally, socially and environmentally.”
Last month leaders at Babergh District Council called for the Government to address a local authority funding crisis, as Babergh faces a £1.8 million budget gap.
Cllr John Ward, said: “While our costs have risen 21 per cent in the last year, Government funding has increased by just 3.4 per cent in the same period.
“This alone, however, does not truly reflect the cash crisis faced by councils.
“The Local Government Association says core council spending power has suffered a 27 per cent real terms cut since 2011.
“Babergh is a well-run authority. We are making savings, driving efficiencies, and reviewing our fees and charges - but this year we will have to spend reserves to balance our budget. That is unsustainable - you can only spend reserves once.”
East Suffolk Council
East Suffolk Council has a total population of 246,801 and has amassed a debt of £65,565,000, equivalent to a debt of £266 per person in the constituency.
A spokesman for the council said the authority carefully manages all of its debt and provision for its repayment without there being an effect on core cancel services.
He said: “In April 2012, the Council’s Housing Revenue Account (HRA) transitioned to the self-financing regime, which required the council to take on a significant amount of debt to effectively ‘buy out’ of the subsidy system with Government. This regime enabled all HRA income collected locally from rents, service charges and other sources to be kept at local level to deliver housing services to tenants and to invest in the council’s housing stock.
“The HRA budget funds the cost of borrowing for the initial debt settlement and directly supports the council’s aim of maintaining financial sustainability. It is able to remain financially self-sufficient with balanced budgets and the ability to pay off its current debt. A further £960,000 is due to be repaid in 2024/25 and £10 million in 2026/27.”