Scottish councils in £11.5bn debt, warn Greens

Scotland's 32 local authorities are typically spending over 40 per cent of money raised by the council tax servicing their debts, according to a new report by the Scottish Greens.

The party reports councils owe £11.5bn between them including loans from the UK Treasury and private banks.

The Greens argue the loans are "unethical" and should be written off.

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The report, Local Government Debt in Scotland, also finds that Scotland has the highest proportion of PFI/PPP debt per person in the world, where councils face increasing 'unitary payments' for use of schools and other facilities built under the scheme. This was an attempt to keep debt off the balance books, but the Scottish Greens say such arrangements are "clearly unsustainable"

The Western Isles, where the council tax is the lowest in Scotland, spends over 100 per cent of its council tax revenue on servicing its debts. Clackmannanshire, Dundee, Edinburgh, Glasgow, Highland, Inverclyde, South Lanarkshire and West Dunbartonshire councils all spend at least half of their Council Tax revenue servicing debt.

Scottish councils umbrella body COSLA said the local authorities followed a code to borrow responsibly.

Patrick Harvie MSP, Finance spokesperson 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.

"We must also improve oversight so that our local authorities aren't forced into such high-risk financing in future. A Scottish Government-controlled Loans Board would offer greater stability and value, and I would encourage Scottish Ministers to explore the idea."