Scotland councils spend millions on servicing debts, data shows

The Scottish Greens Party has published figures showing that 32 councils owe a total of £11.5 billion to banks and a scheme set up by the UK Treasury.

The research indicated that a typical council spent the equivalent of 42 per cent of its council tax money servicing the debts. Specifically it identified Clackmannanshire, Dundee, Edinburgh, Glasgow, Highland, Inverclyde, South Lanarkshire and West Dunbartonshire councils as spending at least half of their council tax revenue servicing debt.

According to the report, Scottish councils spent almost £1 billion in the last financial year on repayments to the Public Works Loan Board of the UK Treasury and still owe the board a total of almost £9 billion.

Patrick Harvie, finance spokesman for the Scottish Greens, said: "Given the crisis facing local authority finances, it's unacceptable that councils are using council tax revenue to deal with historic debts that enrich private banks and the UK Treasury.

"The unethical nature of the loans from private banks justifies cancellation of these payments, and the Westminster government should write off council debts to end the unfair squeeze on local services."

A spokesman for Cosla said: "Loans are taken out to fund vital infrastructure which is integral to the services which are provided to support communities. Councils operate within strict guidelines through well-established Treasury management policies and they apply the Prudential Code on affordability to ensure that debt is not a burden on the council or its communities.

"Nonetheless, we are all very aware that councils are facing extremely difficult financial circumstances, with the prospect of another difficult financial settlement, and anything that can be done by the UK government, as part of the Chancellor's Autumn Statement, to help alleviate these pressures and free up resources to protect services to our communities would be welcome."

Meanwhile, a Treasury spokesman said: "Historic debt is the responsibility of individual local authorities. The government has no plans to change this position.

"Responsibility for borrowing decisions lies with the locally-elected members of the council, who are democratically accountable to their electorates."