Wed 16 Nov, 2016

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. Patrick Harvie MSP

Scottish Green MSPs today (16 Nov) published a report revealing the scale of long-term debt being held by Scotland's 32 local authorities - a total of £11.5billion.

In many cases, councils are spending more than half of the money they bring in from Council Tax simply to pay interest on debts including loans from the UK Treasury and private banks.

The Green MSPs are calling for the debts to be written off, so that local authorities can focus their resources on protecting public services.

The report, Local Government Debt in Scotland, uses data compiled by People vs PFI and Debt Resistance UK and shows that some councils are facing up to nine per cent interest rates, finding themselves trapped after taking out high-risk loans from private banks.

In 2015-16 Scottish local authorities spent almost £1billion on repayments to the Public Works Loan Board of the UK Treasury and still owe the Board a total of almost £9billion.

Comhairle nan Eilean Siar (Western Isles Council) spends over 100 per cent of its Council Tax revenue 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.

The report also finds that Scotland has the highest proportion of PFI/PPP debt per person in the world.

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."

 

Local Government Debt in Scotland, a report for the Green MSPs

 

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