Birmingham faces biggest council debt in the country

National World - LocalTV

Birmingham still has the biggest council debt in the UK at more than £3.3bn. The council insists the figure is manageable and says future borrowing will focus on housing upgrades.

Transcript

00:00Debt this size matters because it shapes what services people get and how much room the council has to spend.

00:09Birmingham still owes around £3.3 billion, the biggest debt of any local authority here in Britain.

00:15Across the country, councils added almost £8 billion to their combined debt last year.

00:20Together they now owe more than £120 billion, that's about £1,800 for every person here in the UK.

00:29Birmingham has cut its total by 4% in the past year, but the figure still looms large.

00:35The council argues debt per head is a fairer measure.

00:38On that basis, it says it ranks only £49 nationally, with roughly £2,800 per resident.

00:45Officials stress the cost of borrowing is built into financial plans.

00:49They point to a cash balance of more than £200 million, which brings the net debt down slightly.

00:56They say there's no risk of issuing another section 114 notice, purely because of debt.

01:03The notice in 2023, essentially declaring the council bankrupt, was caused instead by Equal Pi claims and a FALRT project.

01:12The Equal Pi bill alone is set at three quarters of a billion pounds, and has already led to a settlement for around 6,000 staff.

01:21Most of Birmingham's borrowing is tied up in housing.

01:24More than a billion is linked to the housing revenue account.

01:28The rest sits in the general fund.

01:31The council signs it times to reduce general fund borrowing in coming years, but it admits more money will be borrowed to upgrade housing stock,

01:38arguing that investment is necessary and affordable.

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