Councils in the UK added £7.8bn to their growing debt pile in the space of a year - the Shared Data Unit has found.
Analysis of data from the Ministry of Housing, Communities and Local Government (MHCLG) shows UK councils owe a combined £122.2bn to lenders, equivalent to £1,791 per resident, as of April 2025.
That is up seven per cent from a total of £114.5bn, the equivalent of £1,677 per resident, a year ago.
Councils can borrow funds to invest in projects such as schools, leisure centres and theatres - they can also borrow to invest in property that will bring in an income over and above repayments on the debt.
But the recent rise is being partly driven by a near tripling of short-term lending from central government, which in some cases is being used to paper over holes in some council revenue budgets rather than pay for investments and town centre improvements.
Experts including Jonathan Carr-West of the Local Government Information Unit (LGIU) said the spiralling levels of debt at local authorities was “extremely worrying”.
Last year, the Shared Data Unit reported on the spiralling debts seen at town halls across the country.
It found council borrowing had reached “staggering” levels at some councils, according to chair of the Public Accounts Committee Dame Meg Hillier.
The money, borrowed largely from an arm of the Treasury, had been used to buy hundreds of commercial assets from shopping centres, to office parks, cinemas, energy companies and housing developments all with the aim of returning a stream of income.
Many council leaders said they had no choice but to invest in order to fill the gap in income they used to receive from the government under the revenue support grant.
Though that grant has increased in the years since the pandemic, core spending power for local authorities is around 18% down per person compared to 2010, the Institute for Fiscal Studies found.
We extracted debt data from the borrowing and investment live tables (Q4 2024 to 2025) by the Department for Levelling Up, Housing and Communities.
We summed all the borrowing categories listed to get our “total amassed debt” figure.
One of the most commonly used metrics in reports of council debt is the yearly amount an authority spends in servicing borrowing as a proportion of its “core spending power”. Core spending power is a measure of the resources available to local authorities to fund services.
However, we found measuring debt against core spending power was problematic.
This is partly because of self-financing laws brought in under the Localism Act in 2012, which allowed many councils to effectively buy their existing social housing stock out of the Housing Revenue Account subsidy system.
This enabled some to keep all of the rent received from their social housing stock but also required them to take on a set amount of debt relating to the size of their stock. This debt is included in the “total amassed debt” in Oflog’s official figures.
However, some councils have argued that core spending power does not include any of the income they receive from social housing and is therefore a misleading metric. Income from commercial investments is also not included in core spending power.
When we took guidance from MHCLG, we found the department was in the process of revising this measure after receiving representations from councils.
For instance, North East Derbyshire Council told us: “The HRA (Housing Revenue Account) debt makes up 95% of the Council’s total debt with less than only £7m relating to the general fund. This is not recognised in the publicly available measure of debt v net revenue spend, with revenue spend only taking into account general fund expenditure. If the HRA debt is separated out then our % debt to NRE on the General Fund is negligible.”
- Department for Levelling Up, Housing and Communities: borrowing and investment live tables (Q4 2024 to 2025)
- ONS: Dataset Estimates of the population for the UK, England, Wales, Scotland and Northern Ireland
- Analysis: Council debt 2025
- Ayr Advertiser: Council tax hike fears as Ayrshire's council debt rises
- Banbury FM: Council debts up in West Northants but down in Cherwell
- BBC Northamptonshire: Local authority's level of debt rises to £679m
- BBC North East: Debt owed by North East councils tops £4.3bn
- BBC Peterborough: City council's debt rises by £13.5m
- BBC Scotland: Scotland's councils are £20bn in debt - but it's not all bad
- BBC Surrey: Woking council has biggest debt per person in UK
- BBC Sussex: East Sussex councils are half-a-billion in debt
- BBC Wales: Swansea council debt could rise to £750m through borrowing
- BBC West of England: West's councils sell assets as debts rise by £245m
- BBC West Midlands: Council has highest debt among UK local authorities
- Bedford Independent: Concerns raised as councils’ debt rises across Bedfordshire
- Bedford Today: Bedford council's debt has risen 47% in the last year
- Biggleswade Chronicle: Central Bedfordshire Council debt has risen by more than a quarter in the past year
- BirminghamLive: Midland council debt increases by £100m in 12 months to £879m
- Birmingham World: Watch: Birmingham City Council has highest council debt in the country
- Bournemouth Echo: BCP council debt has risen by nearly £80million in a year
- Brecon and Radnor Express: COUNCIL DEBT: Powys piles on the debt over the past fiscal year
- Cambrian News: COUNCIL DEBT: Ceredigion piles on debt, owes £126 million - more than 3 times the reserves it has on hand
- CambridgeshireLive: Peterborough City Council's increasing debt causes concerns over 'wasted money'
- Chronicle Live: North East council debts tops £4.3bn amid worries over 'unsustainable' funding system
- Clapham Junction Insider: Councils in crisis? Not for Wandsworth with a record-low debt level
- Clydebank Post: West Dunbartonshire Council in top 10 in UK for debt levels
- CoventryLive: Coventry City Council's debt spirals to £257m
- Crediton Courier: Devon councils owe £1.9 billion to lenders
- Daily Mail: Councils' debt pile soars to £122bn - equivalent to £1,700 per person - as struggling town halls sell off schools, care homes and sports clubs
- Daily Record: Perth and Kinross Council racks up £721 million of debt
- DevonLive: Devon councils owe £1.9 billion to lenders
- Diss Express: Council debt across Suffolk reaches £1.1bn
- DnG24: Council’s rising debt
- East Anglia Bylines: Local council debts in the East: a continuing challenge
- East Anglian Daily Times: How much debt are Suffolk's district and county councils in?
- Farnham Herald: Surrey County Council's debt surge: What it means for residents
- The Forester: Forest of Dean Council maintains zero debt amid rising UK council debts
- Gloucester News Centre: Councils struggling with rising debts
- Greatest Hits Radio: New data reveals a Surrey council has over £20,000 of debt per resident
- Greenwich Wire: Greenwich Council’s debt soars by more than £900 per resident
- Ipswich.co.uk: Suffolk's debt hits £1.1bn as three councils see increases
- Island Echo: NEW DATA SHOWS ISLE OF WIGHT COUNCIL’S DEBT HAS RISEN BY £860,000
- John O'Groat Journal and Caithness Courier: Highland Council in top 10 most indebted UK local authorities in borrowing per person terms as the total owed stands at £1.3bn after a 14% rise since last year
- KentOnline: Debt of Kent’s councils soars to £2.3 billion as amount owed rises 8% in a year
- Liphook Herald: Surrey and Hampshire local authorities face billions in climbing debt
- Liverpool Echo: Huge £220m increase in region's council debts 'papering over cracks'
- LocalGov: Town halls forced to sell community assets as debts mount
- Luton Today: Luton council debt has increased to £722million - but it claims borrowing is essential to improve the town
- Meon Valley Times: Hampshire councils’ debt hits £2.7bn as Winchester stays near top per head
- The MJ: Town halls forced to sell community assets as debts mount
- NewcastleWorld: Debt owned by North East councils hits £4.3 billion after £12m jump in last year alone
- Northampton Chronicle & Echo: Debt at West Northamptonshire Council rises by more than £90 million in one year, figures reveal
- North East Bylines: North East: Council Debt Levels
- The Northern Echo: Council debt rises in County Durham and Darlington revealed
- On The Wight: Isle of Wight Council debt very small compared to many other councils nationally
- PlymouthLive: Plymouth tops the list of Devon councils who owe the most money
- Room151: Local authority debt in the spotlight as £2.9bn of assets sold in two years
- Shetland News: SIC has lowest borrowing debt of all Scottish local authorities, figures suggest
- Spalding and South Holland Voice: Debts at local councils revealed
- Suffolk News: Suffolk's council debt reaches £1.1bn — here's what it means for your area
- SurreyLive: Surrey racks up one of UK’s fastest rises in council debt in ‘extremely worrying’ trend
- Swindon Advertiser: Swindon council's debt rises by £100 per person in a year
- The Tenby Observer: Pembrokeshire Council's debt soars to nearly £200m, worrying experts
- Upday: £122bn council debt forces sale of schools and care homes
- Wirral Globe: Debt increases by £220m across Liverpool City Region councils
- Woking News & Mail: Woking tops UK council debt league at £20.6k per resident
In September 2023, a BBC Shared Data Unit analysis of data by the Department for Levelling Up, Housing and Communities showed UK councils owed a combined £97.8bn to lenders, equivalent to £1,455 per resident, as of September 2023. The repo for that is here
In August 2023, the BBC Shared Data Unit revealed that a black hole in local authority budgets continues to grow, prompting fears some will not be able to provide basic services (repo available here).
In July 2021, the BBC Shared Data Unit reported that UK councils faced a £3bn black hole in their budgets as they emerged from the coronavirus pandemic (repo available here).