Local Government: Debts
The question
To ask the Secretary of State for Housing, Communities and Local Government, with reference to para 4.2.3 of the English Devolution White Paper, published on 16 December 2024, how the (a) debts and (b) surpluses of individual councils will be divided up in areas with local government restructuring; and whether debt liability will be transferred to all the taxpayers in the new unitary.
Answered by Jim McMahon
It is the responsibility of councils to manage their budgets, and it is standard for councils to borrow and to hold debt, which they will do in the normal course of business. Local government re-organisation does not change this. Previous Secretaries of State used statutory powers to intervene in a small number of councils failing their Best Value Duty partly associated with high levels of unsustainable debt.
We will work with local leaders to explore how best to support local government reorganisation where there has been failure. We will continue to work with Best Value Commissioners in these councils to support the councils’ financial recovery.
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