17 Apr 2012
A legacy of debt
The City of Edinburgh Council now carries over £1.5 billion of debt, an amount that has risen by a staggering 66% over the last 5 years. That amounts to over £3,000 of debt for every man, woman and child in the city.
It’s costing the Edinburgh taxpayer (you and me) an eye-watering £110 million every year to service that debt, which equates to over 11% of the revenue budget going into debt re-payments every single year. Yes – more than £1 in every £10 of Edinburgh taxpayers' money that the council manages goes on servicing a debt burden that’s been increased by 66% since 2007. And of the 32 local authorities in Scotland, Edinburgh now has the 4th highest debt-to-revenue ratio of any council in the country.
Now if this debt is properly managed then this should be no problem; but the Council’s income is expected to reduce in the next few years which inevitably means that the current repayments (£110m/year), even if they remain stable, will soak up an increased proportion of the Council’s revenue resources. This obviously leads to pressure on funding for front line resources.
The next Council administration, whoever they may be, will have to tackle this issue. Mounting debt with decreasing income is unsustainable.