Councils left at risk after debt splurge
RISKY town hall borrowing has “exploded” under Whitehall’s nose – putting council finances in jeopardy, says an MP watchdog.
Local authorities have borrowed cash for properties to generate rental income, but the Covid-19 crisis could hammer rents and leave them with losses.
Outlay on commercial premises has risen 14-fold since 2017, says the MPs’ Public Accounts Committee. In that time councils blew £6.6billion of taxpayer cash on property.
Up to 91% of that was financed by borrowing.
Chair Meg Hillier said Local Government ministers had failed to carry out due scrutiny and MPs had warned of risks in 2016.
She added: “Taxpayers and local services are in a very risky position.”