Local Government: Debts
The question
To ask the Secretary of State for Housing, Communities and Local Government, whether debts from local authorities being merged together will be taken on jointly by the new authority under her Department's local government reorganisation plans; and how any existing debt will be serviced.
Answered by Jim McMahon
On 6 February I wrote to the leaders of two-tier councils and neighbouring unitaries to formally invite them to develop proposals for reorganisation. It is for the councils to develop robust and sustainable proposals that are in the best interests of the whole area.
As outlined in our invitation letter, in general, as with previous restructures, there is no proposal for council debt to be addressed centrally or written off as part of reorganisation. For areas where there are exceptional circumstances where there has been failure linked to capital practices, proposals should reflect the extent to which the implications of this can be managed locally, including as part of efficiencies possible through reorganisation.
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