Central Bedfordshire Council debt has risen by more than a quarter in the past year
Councils in the UK have added £7.8bn to their debt pile in just one year, according to analysis by the BBC Shared Data Unit.
In Central Bedfordshire, council debt rose by more than a quarter in the past year.
Figures from the Ministry of Housing, Communities and Local Government (MHCLG) show local authorities owed a combined £122.2bn to lenders as of April 2025. That is the equivalent of £1,791 for every resident.
The total is up seven per cent from £114.5bn, or £1,677 per resident, a year earlier.
Councils are allowed to borrow to fund projects such as schools, leisure centres and theatres. They can also borrow to invest in property designed to generate income above debt repayments.
The Shared Data Unit’s report said the recent surge is being partly driven by a near tripling of short-term lending from central government. In some cases, this has been used to plug gaps in council revenue budgets rather than pay for investment and town centre improvements.
Jonathan Carr-West, chief executive of the Local Government Information Unit (LGIU), described the growing levels of debt as “extremely worrying”.
He said: “That is not a sustainable system. As one local government finance officer said to me, it’s essentially payday loans for local governments.
“I don’t think the government would say that’s it’s long-term ambition. They would say that is what we have had to do to paper over the cracks while we introduce a new funding system for local government.”
Figures show total debt in Central Bedfordshire increased from £605.3m at the end of 2023/24 to £759.5m at the end of 2024/25 – a rise of £154.2m, or 25.48 per cent.
That equates to an increase from £1,963 per person to £2,464 per person, a rise of £500.
Councillor John Baker, executive member for finance, said: “Managing the council’s finances responsibility is our highest priority.
“The council has historically used borrowing to invest in essential projects such as new schools, care homes and maintaining the roads.
“Higher inflation has increased the cost of borrowing in recent years and in response, we have taken steps to slow down new projects to protect both the council’s finances and taxpayers.
“Whilst borrowing costs remain higher than we’d like, more action will follow. And we’ll continue to dispose of surplus assets to fund the expansion of essential services.”
While some funding reforms are being introduced by the government, including multi-year financial settlements and a review of the funding formula, Mr Carr-West said it is “too early to see whether those are really going to turn the ship around”.
He added: “We survey every council in the country every year earlier this year, still one third of councils are telling us that if nothing changes in terms of how they’re funded, they are going to go bust within the next five years.
“Now that’s down from 50 per cent of councils telling us that in 2024. So we have made some progress. ”