This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/news/uk-scotland-37988682
The article has changed 6 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Scottish councils 'spend hundreds of millions' on servicing debts | Scottish councils 'spend hundreds of millions' on servicing debts |
| (about 7 hours later) | |
| Councils are spending hundreds of millions of pounds servicing their debts, according to the Scottish Greens. | Councils are spending hundreds of millions of pounds servicing their debts, according to the Scottish Greens. |
| An analysis for the party found that Scotland's 32 councils owe £11.5bn between them. | An analysis for the party found that Scotland's 32 councils owe £11.5bn between them. |
| The money is owed to banks and a scheme set up by the UK Treasury. | The money is owed to banks and a scheme set up by the UK Treasury. |
| A typical council spends the equivalent of 42% of its council tax money servicing the debts, the research indicated. | A typical council spends the equivalent of 42% of its council tax money servicing the debts, the research indicated. |
| One council - Comhairle nan Eilean Siar (Western Isles Council) - spends more servicing its debts than it raises in council tax locally, although the authority told BBC Scotland its financial arrangements were exceptional. | One council - Comhairle nan Eilean Siar (Western Isles Council) - spends more servicing its debts than it raises in council tax locally, although the authority told BBC Scotland its financial arrangements were exceptional. |
| The analysis also found that Clackmannanshire, Dundee, Edinburgh, Glasgow, Highland, Inverclyde, South Lanarkshire and West Dunbartonshire councils all spent at least half of their council tax revenue servicing debt. | The analysis also found that Clackmannanshire, Dundee, Edinburgh, Glasgow, Highland, Inverclyde, South Lanarkshire and West Dunbartonshire councils all spent at least half of their council tax revenue servicing debt. |
| 'Unethical' loans | 'Unethical' loans |
| The council tax makes up about 15% of a typical council's budget. | The council tax makes up about 15% of a typical council's budget. |
| The Greens said the "unethical" nature of the loans meant the Treasury and the banks concerned should cancel them. | The Greens said the "unethical" nature of the loans meant the Treasury and the banks concerned should cancel them. |
| In the last financial year, Scottish councils spent almost £1bn on repayments to the Public Works Loan Board of the UK Treasury and still owe the board a total of almost £9bn. | In the last financial year, Scottish councils spent almost £1bn on repayments to the Public Works Loan Board of the UK Treasury and still owe the board a total of almost £9bn. |
| Patrick Harvie, finance spokesman 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. | Patrick Harvie, finance spokesman 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." | "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." |
| Councils say they borrowed the money to invest in the local infrastructure - not to help them balance their books. Some say direct comparisons with the amount raised locally in council tax could be misleading. | Councils say they borrowed the money to invest in the local infrastructure - not to help them balance their books. Some say direct comparisons with the amount raised locally in council tax could be misleading. |
| The council tax in the Western Isles is the lowest in Scotland and makes up an unusually-low proportion of the council's budget. | The council tax in the Western Isles is the lowest in Scotland and makes up an unusually-low proportion of the council's budget. |
| A spokesman for the council said: "These figures reflect the fact there has been substantial investment in the islands because of the needs of the islands. The investments have been in the much-needed improvements in the infrastructure of the islands. | A spokesman for the council said: "These figures reflect the fact there has been substantial investment in the islands because of the needs of the islands. The investments have been in the much-needed improvements in the infrastructure of the islands. |
| "Our low population base and lower than the Scottish average housing values means that revenue from council tax is very low and only accounts for about 8% of our total revenue, which is mainly made up of [Scottish] government grant." | "Our low population base and lower than the Scottish average housing values means that revenue from council tax is very low and only accounts for about 8% of our total revenue, which is mainly made up of [Scottish] government grant." |
| He added: "The servicing of the debt is not based on council tax so, whilst it is a high percentage figure, that simply reflects the investment that the comhairle and government recognised was needed in the islands." | He added: "The servicing of the debt is not based on council tax so, whilst it is a high percentage figure, that simply reflects the investment that the comhairle and government recognised was needed in the islands." |
| Comhairle nan Eilean Siar said that like other councils it had been through extremely challenging financial circumstances in recent years. Those circumstances showed no sign of improving so the council said it faced choices ahead. | Comhairle nan Eilean Siar said that like other councils it had been through extremely challenging financial circumstances in recent years. Those circumstances showed no sign of improving so the council said it faced choices ahead. |
| Protect services | Protect services |
| Local government umbrella body Cosla said councils borrowed money "extremely responsibly" and worked to a code when they did this. | Local government umbrella body Cosla said councils borrowed money "extremely responsibly" and worked to a code when they did this. |
| A spokesman said: "Loans are taken out to fund vital infrastructure which is integral to the services which are provided to support communities. Councils operate within strict guidelines through well-established Treasury management policies and they apply the Prudential Code on affordability to ensure that debt is not a burden on the council or its communities. | A spokesman said: "Loans are taken out to fund vital infrastructure which is integral to the services which are provided to support communities. Councils operate within strict guidelines through well-established Treasury management policies and they apply the Prudential Code on affordability to ensure that debt is not a burden on the council or its communities. |
| "Nonetheless, we are all very aware that councils are facing extremely difficult financial circumstances, with the prospect of another difficult financial settlement, and anything that can be done by the UK government, as part of the Chancellor's Autumn Statement, to help alleviate these pressures and free up resources to protect services to our communities would be welcome." | "Nonetheless, we are all very aware that councils are facing extremely difficult financial circumstances, with the prospect of another difficult financial settlement, and anything that can be done by the UK government, as part of the Chancellor's Autumn Statement, to help alleviate these pressures and free up resources to protect services to our communities would be welcome." |
| City of Edinburgh Council said loan costs represented 12% of its net expenditure but the level of borrowing had fallen by more than £100m since March 2014. | |
| A spokesperson added: "Some debt incurred has been agreed for projects where we make significant revenue savings, including the purchase of its headquarters building in 2008. | |
| "All borrowing undertaken furthermore requires to be prudent, affordable and sustainable and adheres to relevant professional guidance." | |
| A Treasury spokesman said: "Historic debt is the responsibility of individual local authorities. The government has no plans to change this position. | A Treasury spokesman said: "Historic debt is the responsibility of individual local authorities. The government has no plans to change this position. |
| "Responsibility for borrowing decisions lies with the locally-elected members of the council, who are democratically accountable to their electorates." | "Responsibility for borrowing decisions lies with the locally-elected members of the council, who are democratically accountable to their electorates." |